First National Bank (FNB) and payment gateway provider MyGate have teamed up to offer online debit card transaction facilities that will offer real-time transactions similar to that of credit cards.
The new service is already available to FNB mobile banking customers.
Dan Edmiston, MyGate MD, says the system is the first of its kind in the country and should help expand the number of people who can now transact online.
"It is safer than a credit card transaction as the mobile phone participation means that the transaction is confirmed and it eliminates chargeback to the merchant as you find in cases when a stolen credit card is used," he says.
Good expansion
Arthur Goldstuck, MD of Internet research firm World Wide Worx, says the idea is good and it will allow for the expansion of the number of people who can transact online.
"This means we have another real-time payment option. Many online merchants have alternative payment forms, such as direct bank deposits, but until now only credit cards have had real-time transaction capability," he says.
Goldstuck says there is a trade-off in online transactions between security and simplicity, so the more security there is on a site the greater the incident of abandoned cards or curtailed transactions happening.
"This sounds as if it is a superb addition to the payment mix. But it won't necessarily appeal to people who already have credit cards, but it will allow those who don't have them to participate more readily," he says.
According to Goldstuck, there are about four million credit card accounts in the country compared to about 15 million to 20 million debit cards.
An FNB spokesman says Exact Mobile and online betting site TAB are already using the payment system.
How it works
The system works by a customer selecting the FNB mobile banking option on an affiliated merchant's Web site. The customer then dials *120*277 on their cellphone, which will be followed by another six digits (the unique transaction reference number) and given amount.
Once dialled, FNB then sends the customer a message via USSD (Unstructured Supplementary Service Data) to confirm the transaction, which the customer does by replying with their PIN. The customer can then also decide what account to pay from and then they'll receive their confirmation message. The merchant receives a simultaneous confirmation message, meaning they can release the goods immediately.
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