Mobicred has unveiled what it claims is the credit facility that allows users to safely shop online at all participating retailers without a credit card.
Jason Sive, founder of Mobicred, says operation is simple. "A client selects Mobicred as a payment option within the merchant's Web site, and they get taken through a brief application process. The application happens in real-time, within the merchant's environment.
"Assuming the client is approved, a facility is provided, based on the client's risk profile. The client then concludes the purchase, and still has an open to buy amount on the facility, which he/she can utilise across other merchant Web sites."
According to Sive, Mobicred functions like a credit card in that a user has a facility approved, and can purchase up to that facility amount. "The minimum monthly payment is 10% of the user's outstanding balance, but the user can also elect to pay the entire balance monthly, and use the facility as a purchasing mechanism only.
He explains that once a facility has been approved, the ease of transacting is simple; users only need their e-mail addresses, passwords and one-time PINs.
"It also allows the client to proactively decrease their limit themselves if they wish to. A client is able to access their account via their mobile, and view all the normal information, such as next payment date, next payment amount and facility remaining."
When applying for the credit facility, one needs to be employed, earn at least R5 000 per month, and have a South African bank account in their name, a cellphone number, e-mail address and valid SA ID number.
Sive says Mobicred's target market varies considering credit card penetration is low in SA. "Many of the younger online shoppers either don't have sufficient credit card facilities, or don't have a credit card at all. Then there are those who don't shop online, due to fear of credit card fraud."
Mobicred outsources risk management systems to Redwood Third Party Processing, which specialises in consumer credit/risk, he says.
"We have already had our first fraud application, and the system detected it immediately. I have no doubt we will continue to enhance as we go along, and continue to learn. It's a very key time for us right now."
Sive says Mobicred is a registered credit provider that follows NCA compliance rules when assessing credit.
"Where a client is over-indebted, they will not be approved. Where a client already has some debt, with reasonable credit history, the client could still easily be approved."
Affordability assessments are carried out in the background validating the information. The pricing of the facility is equivalent to most mid-level credit cards, so this is definitely not a "mirco-lending" type product, he says.
Currently, one can purchase with Mobicred on Digicape, 5Rooms, Style36 and Kinderelo.
"Within the next few weeks, the facility will have the next round of merchants going live. These merchants play in different spaces, so consumers will be able to purchase myriad products with their Mobicred accounts, he notes.
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