Big-four bank Standard Bank has developed an electronic currency payment clearing system that it wants to see being used as the standard for mobile money transfers in SA.
The company launched Mimoney a few years ago, but the concept is only now starting to gain traction and become accepted as a payment clearing system by merchants and banks in SA.
Herman Singh, director of Standard Bank and head of the bank's innovation unit Beyond Payments, says there are too many mobile wallets in SA, none of which are compatible with each other.
He explains there are currently 15 such wallets, and this number is expected to grow to 20 within the next six months. None of these wallets are anticipated to have more than 100 000 customers.
Among the wallets Singh cites are Blue Label's Mbili, Whizzit, Mowalli, eWallet and Pocit. He explains that all these wallets have different standards and are not interoperable. In addition, says Singh, not all these payment mechanisms are accepted by all of SA's estimated 100 000 merchants.
However, says Singh, the bank launched a payment processing system that can be used by any wallet, and at any merchant outlet in SA, almost two years ago. Although the system has a small market share and is just getting off the ground, it could lead to a uniform payment solution, he notes.
“South Africa may end up with the world's first totally cross-channel ubiquitous payment system,” in the mobile space, comments Singh.
Standard solution
Standard Bank launched Mimoney as an electronic currency that converts rands into Mimoney at a one-to-one ratio. The money can be transferred through a variety of means, including electronic transfer, as well as inserting notes into a vending machine to have it sent to a mobile phone, says Singh.
He explains that the currency is approved by the South African Reserve Bank and is held in a Standard Bank trust account until redeemed by the person who owns it. This ensures the electronic cash is safe.
However, adds Singh, the platform can be used by any mobile wallet in SA, and the money is transferred directly into the consumer's wallet if the company that designed the wallet has signed up with Standard Bank. In addition, the money can be spent at any participating retailer.
By next year, the bank aims to have signed up all of SA's major retail chains, which will make the Mimoney platform an alternative payment form for most consumers.
Singh explains that the bank is also in talks with wallet companies to get them to come on board, and does not charge for the use of the platform. So far, about 30% of the wallets in the country have signed up.
The advantage to the companies that designed the wallets, says Singh, is that they do not have to individually integrate with each merchant, which also reduces the amount of integrations each merchant would be asked to do. “The dream is that any wallet in SA rides on Mimoney.”
Beyond Payments started operating in January 2008 and was founded on the belief that “innovation cannot be a stop-start kind of thing,” but needed constant focus. The unit is involved in multiple spaces and innovates in several areas, including Internet banking and mobile, says Singh.
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