MTN Mobile Money, a joint venture company between MTN and Standard Bank, has unveiled an e-commerce payment system called payD that will enable users to shop online using debit cards.
According to MTN Mobile Money, payD will enable millions of South Africans to make secure, online payments using their PIN-based debit cards. The company also believes the facility will boost SA's e-commerce.
Dave Parratt, head of new business development at MTN MobileMoney, says only 3% of SA's population has credit cards.
MasterCard VP for advance payment in the MEA region Dougie Henderson explains that currently PIN-based debit and cheque cards cannot be used for online shopping.
“There are two types of debit cards - cheque debit card and PIN-based debit card. You can use cheque debit cards to buy online, but can't use PIN-based cards to buy online,” Henderson explains.
He adds that this restricts online transactions to a few elite groups of consumers and prevents companies from tapping into the mass debit card market.
1time Airlines, one of the country's low-cost airlines, has embraced the move and partnered with payD, making it the first airline on the continent to allow passengers to flight tickets online using a debit card.
Rodney James, 1time Airlines CEO, says the introduction of payD is aligned to the airline's core customer objectives. “We are consistently aware of the need to offer our customers innovative options that are more convenient, safer and user-friendly, and thus, we are proud to be one of the first airlines to offer this service.
“The use of payD broadens the options available to customers on our Web site, protects them against possible fraud, and further simplifies the process of purchasing tickets online,” says James.
Michael Kaminski, CIO of 1time, says this agreement was part of a plan to stay ahead of competitors, which include other low-cost carriers such as Mango and Kulula.
“In the last seven years, 1time has been the fastest growing airline, and we are targeting 11 million debit card users,” notes Kaminski.
Paratt adds that Standard Bank and Nedbank pin-based debit card users on the MTN and Vodacom networks can use payD, with more banks expected to offer the service within a year.
“As a payment mechanism, payD is completely partner-neutral. Standard Bank and Nedbank are the first banks operational on the system but will soon be joined by other major institutions,” he says.
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