In spite of the worldwide boom in Internet sales, countless consumers have hitherto been unable to purchase online as a result of no credit facilities. Debit cards are however fast changing this scenario, offering a new payment transaction for consumers who do not qualify for credit cards.
SETcom, the first South African commerce service provider (CSP) specialising in both SSL and SET (secure electronic transaction) security protocols, reports that it has successfully conducted debit card payments via its commerce gateway. "Debit cards have opened a whole new market segment for the growing number of Internet sales conducted via e-commerce gateways," states SETcom managing director, Jentje Hoadley.
The concept of debit cards is relatively new to the marketplace. It involves a direct (real-time) debit from a current or cheque account; there is thus no credit involved. In effect, paying with a debit card is similar to real-time transmissions of funds, and is less expensive than writing a cheque. The process implies immediate authorisation of online transactions, checking reserve funds and, if these are available, capturing the necessary funds.
Current statistics from a leading banking group report on a total of around 8 million debit cards which have already been issued. Hoadley notes that from early in 2001 the market will witness a marked increase in the number of debit cards issued to companies, which will replace untold cheque payments in the process. "There will be a considerable increase in the use of debit cards for e-commerce. This obviously entails tremendous growth for e-commerce and the opening of many new sales avenues," she concludes.
SETcom does not issue debit cards, which is done via banking institutions. The company processes debit card transactions online via its commerce gateway.
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