Mimoney, Standard Bank's virtual currency division that enables online transactions, has expanded its merchant footprint with the recent signing up of three new online retailers.
Its full merchant base, with the addition of Take2, Simplicity.co.za and Luxury4Less, now means consumers can buy virtually anything online with the currency, says mimoney.
The merchant base now covers music, books, movies, computers, cameras, TVs, general electronics, games, fast food, sports, outdoors, airtime, and now clothing and accessories.
“We have just implemented mimoney, but hope to have a great response very soon,” says managing member of Simplicity.co.za Gustav Penny.
CEO for mimoney Herman Singh says online virtualisation of multiple shopping industries and the dematerialisation of goods that's occurring to reduce costs, is now also happening to cash.
Reducing costs
Mimoney says the new online merchants accepting mimoney as a payment mechanism broadens the potential consumer base into the non-credit card youth market.
It also says the move reduces the merchant's costs when compared to other payment mechanisms.
“We see a tenfold reduction in costs for the merchant and hopefully this saving will be passed on to the consumer as well. Over time, we would hope to see the complete elimination of the use of airtime for payments and the adoption of a formal and approved e-currency,” says Singh.
Co-founder and managing director of Luxury4Less Arnd Herrmann says payments via credit cards are expensive for merchants, since they keep their margins as low as possible, and being charged 5% cuts deeply into their profits. “Plus, our funds only get released after 20 working days, which affects our cash flow negatively all the time. Despite this, we noticed that South Africans are still not too happy to capture their credit card details on the Internet.”
Reaching the unbanked
John Campbell, business development executive of mimoney, explains: “The growth in online commerce in SA has always been a chicken and egg dilemma; the main limitation has always been that there are not enough customers with Internet access and a secure payment mechanism to justify the investment for retailers to build online stores. We are definitely seeing a transformation in that space.
“More and more quality online stores, with compelling products at a good price, are appearing. We also find that these stores embrace mimoney, because it allows them to break through the barrier of limited credit card customers, which mimoney was specifically created for.”
Singh says other than consumers without credit cards, the unbanked can also participate in online shopping now.
He explains: “Mimoney... is starting to achieve wide acceptance, making it acceptable to all customers whether banked or not, and irrespective of cellphone or network. The natural result of this will be a move away from premium-rated SMS and other forms of mobile billing services with their 'obscene' merchant costs.”
Penny agrees, saying mimoney offers the “alternative” customer the option to shop online.
“Mimoney just needs some time to get itself out into the market and let people be aware that there are other payment options for online ordering.”
Herrmann also says people who were concerned about security now feel more comfortable purchasing online. “We expect a huge positive impact, maybe not so much because people couldn't purchase before, but more from people who now want to purchase since they feel more comfortable about the payment process.
CIO of Take2 Renier Crause says mimoney also presents a way for parents to limit the amount their children spend online. He explains that by buying vouchers, parents can provide a budget for the children and ensure they are purchasing in a secure manner.
Safe shopping
“Compared to the other payment methods, we expect a huge reduction in terms of risks and complications by implementing mimoney,” says Herrmann.
However, Campbell says there are potential risks involved. He explains that, although mimoney provides better security than using credit cards online, there is a risk if a customer's phone is stolen and it is not PIN-protected. Someone else can use the mimoney vouchers on the phone.
“However, mimoney purchases are limited to R5 000 per day. If a person uses an electronic wallet, like mimoney connect or Mowaly, then their mimoney is always protected by a PIN.”
Dealing in mimoney
Mimoney is a virtual payment voucher that can be used as a method of payment on any electronic environment, such as an Internet Web site, a mobi Web site, or at a telephone booking or purchasing environment where mimoney is advertised as an acceptable payment mechanism, says the Standard Bank division.
It adds that to purchase the vouchers, customers make a payment to the Standard Bank mimoney account. They then receive a mimoney voucher, which is an 18-digit number to the same value of the payment they made. The code is delivered to a designated mobile phone device upon purchase.
Like Master and Visa card signs, customers can use their mimoney vouchers wherever they see a mimoney sign.
Rolled out in December 2009, mimoney's retail partners include Kalahari.net, Ster-Kinekor, eXactmobile, Mr Delivery, MXit, Incredibytes, eDreams, MiTime, eXactMusic and NetFlorist.
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