IT in Banking

EMV piloted in rural Free State area

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Capitec and MasterCard have announced the pilot of a pre-authorised debit card based on the Europay/MasterCard/Visa (EMV) standard.

The pilot, in the rural area of Qwa Qwa, will involve the installation of 25 point-of-sale (POS) systems. Capitec Bank CEO Riaan Stassen says the pilot is geared towards testing consumer acceptance rather than testing the actual technology.

"We have already rigorously tested the card, the challenge to us is changing the way people in this country bank."

The pre-authorised card will require people to load an amount of money onto their card, which can be done at any Capitec branch or POS unit. Because it is pre-loaded, transactions can be executed without the need to confirm the transaction online, says MasterCard SA senior VP and GM Eddie Grobler.

"Basically, it`s like having a piece of your bank account on your card, and we think there is tremendous demand around the globe for a product that can work offline."

The key advantage of the enhanced Maestro debit card is that it will increase accessibility while decreasing cost for the consumer, says Stassen.

"Transactions using standard magnetic stripe cards require retailers to be 'always online` which is not only expensive, but requires reliable telecommunications infrastructure as well. With the pre-authorised card, retailers will only need to link up and send Capitec the transaction details intermittently."

Consumer transactions will cost around 50c, lower than the standard R2.50 to R3 charge, adds Stassen. The card itself will cost between R15 and R25.

As an incentive for retailers to get on board with the drive into the unbanked sector, Capitec is allowing virtual transactions - such as airtime vouchers - on which the retailers will receive commission.

Capitec has 200 branches in township areas, but this will increase by a further 50 by February, says Stassen. "We think a realistic expectation is to have 5 000 ATMs in the next two years."

December 2005 is the international deadline for all banks to change over to the EMV standard.

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