A South African company is enabling traders in Africa to accept credit cards even though they don`t have access to electricity or fixed-line telecommunications.
iVeri CEO Barry Coetzee says the company`s product has been working for several months in Rwanda, and there are plans to roll it out in other countries too.
By the end of the month, the solution should be live in Ivory Coast and Nigeria is to roll it out next month.
iVeri, which partners with one of the big four banks in SA, found willing partners for the African project in MasterCard and Lebanese credit card services company CSC.
Coetzee says that in Africa, mobile operators form the infrastructure, and although mobile phone operating systems differ, they all have DTMF (dial tone multi-frequency) tones in common.
"We looked at IVR (interactive voice response) technology, but that is hugely expensive technology," he adds. "So we decided to write our own IVR system." The system had to be work on open source systems as well as Windows, and thus is Java-based. It also has mother tongue capability.
The Rwandan merchant now needs just his own cellphone and airtime. "He takes the card, dials a number and the IVR answers," Coetzee says. The IVR asks what language to use, after which it requests the merchant`s user name and password.
The merchant then inputs the credit card details and the transaction amount. The data goes from the IVR system in Kigali through the Internet to a gateway in Johannesburg. From there it goes to an offshore processing centre, to the cardholder`s bank and back via the same route - all in 12-14 seconds.
A voice then informs the merchant whether the transaction is authorised and gives a reference number.
Coetzee says the solution was implemented in Rwanda after iVeri was approached by Simtel, a consortium of Rwandan banks and the central bank.
He adds that the system has already cut down the incidence of fraud. He cites as an example an incident involving a Rwandan merchant, an artist, who was approached by a Spanish tourist wanting to buy a painting.
The IVR system twice rejected the transaction as there were insufficient funds in the tourist`s bank account. The angry tourist claimed that the local hotel as well as restaurants had accepted the card.
"The hotel did accept the card, but it was using a voucher system, not an online system. So this Spaniard was defrauding people. By the time they found out, he was long gone. But the artist on the side of the road was protected."
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