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mPOS removes cash from transactions

By Loyiso Lindani, Editorial Assistant
Johannesburg, 19 Feb 2013

SMEs that are vulnerable to attacks and that lack resources to secure cash on premises could find a solution in mobile point-of-sale (mPOS).

mPOS, a cashless system that uses near-field communication (NFC) technology to complete transactions, could lower the risks of armed robberies, which could, in turn, lower the cost of fidelity insurance, notes Robert Boccia, executive: IT at Lion of Africa Insurance.

"One of the biggest challenges SMEs often face with carrying cash is the possibility of a robbery. We're trying to move away from the contemporary methods by issuing mPOS, which allows the consumer's smartphone to be used as a tool to make payments," explained Boccia.

mPOS is a card-acceptance solution that turns a cellphone into a point-of-sale device through NFC, allowing merchants to accept payment by credit and debit cards.

"The software works through an attached card reader to the smartphone, which then acts as a means to transact," Boccia added.

Boccia believes that by adopting mPOS and implementing a cards-only policy, operations within the business sector may potentially see a decrease in cash robberies, which could subsequently lead to a decrease in companies' insurance premiums.

"Our take is that SMEs and retailers already spend high premiums on fidelity insurance. We believe the adoption of mPOS could lead to an increasingly secure mode of transacting by removing the cash dynamic in purchases," he added.

Regarding adoption concerns, Boccia sees no reason why the South African market would not adapt to mPOS.

"We think South African consumers will adapt easily to mPOS; for example, Microsoft is currently aiming to enable 75% of SMEs to adopt mPOS, and when looking at the mobile climate, the majority of consumers own smartphones, which eliminates traditional adoption barriers," he continued.

He outlined that, currently, POS devices are rented to vendors at about R250 a month with a merchant fee charged on transactions, and that mPOS devices will also benefit small business owners, as they cost less, making them more attractive to smaller traders.

"Although the official prices have not been released for the South African market, we're confident the solution will be much cheaper. In the US, the software has been adopted for a period of a year now and costs between $10 and $20," he concluded.

mPOS will be available locally in November.

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