Much has been made of the drive to reach Africa's vast unbanked population, with cell phone banking seen as the key to resolving most of the problems that e-commerce currently encounters.
The real issue is that while the banked population is spoilt for choice with regard to ways to move money around, the unbanked population is cash-bound, leaving it facing innumerable problems, including security, costs, transfers to family or friends, queues, and safety concerns. Transferring money is especially a problem for migrant labour.
To this end, Sandton-based Wizzit, which launched in 2004 in an alliance partnership with the South African Bank of Athens, has come to the rescue, offering a cellular banking facility, complete with a Maestro debit card.
With the debit card, Wizzit clients can transfer money to friends and family members, even if they don't bank with Wizzit. They can pay accounts, arrange for debit orders and stop orders, check an account balance, and buy airtime and prepaid electricity, using their cell phones.
They can also withdraw cash from ATMs or from retailers like Pick 'n Pay and Checkers, while deposits can be made at the Bank of Athens, Absa and the Post Office.
What sets Wizzit apart from its contemporaries - and makes it particularly appealing to the estimated 12-16 million people who don't use banks, but collectively have an estimated R1 billion in 'under the mattress' savings - is that users are not required to have a bank account, while the technology is compatible with early generation cell phones of the type most popular in low-income communities.
The company utilises sales representatives, known colloquially as Wizzkids, who target specific areas across the country in order to sign up new customers. This is done without asking clients to fill in application forms, supply photocopied IDs or show proof of residence.
The Wizzkids - formerly unemployed people themselves, who are trained and certified to sell the Wizzit service - sell prospective clients special packs that include a debit card and manual.
"Our Wizzkids provide one-on-one support to our clients and ensure that they understand and benefit from this form of banking," says Wizzit director Pakie Mphahlele.
"Wizzit cell phone transactions are simpler than please call me' functionalities,, and the level and type of transactions indicate that the target market is comfortable with adopting a cell phone banking operation."
He points out that Wizzit can be used by anybody, on any network and any phone, who wants to pay for transactions or get cash out of their account, but it is primarily aimed at the unbanked and the underbanked, because it is an extremely easy and cost-effective way of paying for transactions
Mphahlele says that during the company's pre-launch phase, it very quickly became clear from talking to potential customers that these were people who could not understand the concepts of being charged a monthly fee or of having to keep a minimum balance in their accounts.
"Wizzit has no monthly fees and no minimum balance requirements, and there are no penalties for non-use and also no penalties for excessive use. You only pay for what you use."
"Account holders are charged only for transactions and we assure them that there are no hidden monthly or annual fees," he says.
While Wizzit is performing minor miracles with South Africa's unbanked, and developing a model that could be applied to many developing nations, Paym8, another company that specialises in accessible, innovative mobile commerce (m-commerce) has operations of a similar nature underway in Botswana, Uganda and Kenya, with further expansion plans in the works.
Paym8's key differentiator in the m-commerce space lies in the fact that it allows for payments to be made from any mobile phone using any card from any bank.
Whereas most banks have a proprietary system for providing mobile banking services, Paym8's system is independent of the financial institutions, as the company partners with both the banks and the local mobile operators to provide its solution, essentially operating as the 'glue' between the telcos and the banks.
To this end, Paym8 has developed a close and strategic relationship with Visa, which is one of the reasons it has been so successful, since Visa is such a dominant player in the financial space.
The simple fact that Paym8 has Visa's backing and has undergone its rigorous risk certification process has given the company enormous credibility in the market, and the relationship is viewed as a win-win situation for the tow businesses, as it is a common objective of both the organisations to get people banked and transacting.
Asked about the potential security risks with the Paym8 technology, the company's technical executive, Kerry Stephenson says that the technology itself is secure, using as it does 1 000 bit encryption for security purposes.
"Of course, we cannot discount the human factor here, but the only security risks that may occur will happen with information outside the system, in much the same way as if an ATM user were to keep their PIN written down in their wallet."
He points out that Paym8's solution is robust, secure and credible and - although its transaction gateway, which is hosted at the Didata Campus and has been audited by both Visa and Mastercard, is based in Johannesburg - the company is committed to ongoing service delivery through its local in-country staff and the GSM partner in each country.
In Kenya, Paym8 has a service that enables Safaricom subscribers to make their airtime purchases, while the company has also launched a service that allows Safaricom postpaid and prepaid subscribers to perform card account balance enquiries and settle their power and water utility bills, directly from their handsets, with similar services also operating in Botswana.
"The mobile phone is the PC of Africa and what we are providing is real e-commerce for the continent, and the main benefit of an open technology like ours means is that the customer always has choice," he concludes.
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