Local companies are taking advantage of mobile banking infrastructure by designing payment solutions that differ from those of traditional banking.
Banks and mobile service providers have offered mobile payment solutions in the past. This year, First National Bank rolled out Cell Pay Point, an online payment solution that allows customers to charge payment for goods and services to their bank account, using their cellphone. MTN and Standard Bank teamed up to offer the MobileMoney transactional account, which encourages the use of mobile banking.
Cellphone payment solutions differ from mobile banking solutions in that the process largely excludes banks. Swap and Inter-active Technologies are two new companies offering this type of service, which does not require users to become account-holders at a specific bank.
Quick Swap
The Swap Wallet, a cellphone payment solution unveiled last week, allows users to make payments directly from their cellphones without the security issues of carrying credit cards or convenience issues of drawing cash.
Swap founder and CEO Elsabe Donovan found that while a majority of people have access to cellphones, not everyone is computer literate with access to Internet banking. She also believes there is a high risk in carrying large amounts of cash. In addition, an increasing number of businesses are no longer prepared to accept cheques.
To make a payment, Swap users dial the “Swap code” of the company they wish to pay on their cellphone, and follow the voice prompts.
Merchants also benefit from the convenience of Swap. For example, an electrician could have Swap payment notifications delivered by SMS so that, without having to handle cash, payment for work done is confirmed before he leaves the customer's premises.
Swap's security framework is based on advanced encryption standards, digital certificates, and communications within secure virtual private networks. Communications between the cellphone and the mobile network operator is governed by the GSM communications protocol and includes specific authentication and encryption methods. The Swap environment is hosted behind a firewall at South African ISP Internet Solutions.
Customers who use their Swap Wallets to make payments are not charged and do not pay any call charges when dialling a business's Swap code. Bank transfers are free for customers paying with a Swap Wallet, but if they wish to link a credit card or a bank account to their Swap wallet they will have to pay a R30 once-off fee.
For merchants, the Swap code activation fee is a once-off charge of R330. A R70 monthly hosting fee also applies to all Swap merchants.
The Swap Wallet is currently available and according to Donovan, anyone can use the service.
“One of Swap's trump cards when it comes to comparisons with the competition is the fact that the Swap Wallet - along with its basic payment functionality - is free of set-up charges, free of dial-up charges and free of payment charges. Add this to the fact that no downloads or Internet access abilities are required and the advantages become clearer still,” says Conrad Baudin, Swap communications manager.
Fully alarmed
Another mobile solution in the pipeline is Inter-active Technologies' Mobile Money Transfer solution, which will be available early next year.
Brendan van Staaden, CEO of Inter-active Technologies, says the technology works like a credit card facility. Money can be transferred from a user's SIM card pay-as-you-go account or from their cellular contract account into another account.
He believes the company's Cellulock solution makes mobile banking more secure. A cellphone embedded with the security solution will immediately lock up and sound an alarm if an alert as been sent indicating that someone has stolen the cellphone, tampered with the SIM card or tried to access the user's mobile account illegally.
Inter-active Technologies is in discussions with various banks and at the time of publication, pricing for the service had not been confirmed.
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