Absa's CashSend service, which was originally aimed at entry-level banking customers, is now being extended to the small business and agricultural sector.
Established late in 2008, CashSend allows Absa customers to send any amount between R20 and R3 000 to anyone who has a cellphone. The sender can perform the transaction via their cellphone, Internet banking or at an ATM.
The recipient receives a notification and 10-digit PIN that they can then use together with their own three-digit PIN to withdraw the cash from any Absa ATM, without the need for a bank card.
The extension of the CashSend service, called CashSend Plus, will allow Absa customers to create a schedule of payments with multiple beneficiaries.
“We have enhanced CashSend for uptake in the business market,” says Absa retail bank chief executive Gavin Opperman. “CashSend Plus will enable small businesses and corporate clients to make bulk payments to many recipients, such as payments to casual or temporary workers.”
Adrian Vermooten, deputy managing executive of Absa's digital channels, explains that the service can be customised to client needs.
“Customers can set up limits for CashSend and, while it is possible for the CashSend Plus transactions to be processed immediately, we have put a 24-hour delay in place to limit fraud.”
Different strategy
The CashSend service works in a similar way to First National Bank's eWallet, Standard Bank's Instant Money and Nedbank's M-Pesa.
Both the eWallet and M-Pesa extend their instant money transfer services to incorporate e-money/virtual currencies.
Vermooten says Absa is, however, not looking at making CashSend an e-money service, maintaining that the strength of the bank's offering lies in its simplicity.
“We understand where the customer is at the moment - and we find that our customers need cash in hand more than anything else.
“Considering the regulatory environment in SA, e-money services just end up having the same requirements as having a bank account. This complicates the process for customers who simply want to be able to send and receive money instantly.”
Vermooten adds that Absa's user research shows that 64% of all money sent via CashSend is withdrawn within 24 hours. “People need money, and we want to meet that real need. A major part of that is keeping the system as simple as possible.”
He says CashSend can also be used to send money to most countries in the world, by virtue of the bank's partnership with Western Union.
User patterns
According to Absa, recent user studies have shown that the average amount being sent via the CashSend service is R450, but this value varies across different user groups.
Other findings include that CashSend is not only being used to send money to others, but 25% of customers actually send money to themselves.
Vermooten says 42% of CashSend transactions are sent via ATMs, 23% via Internet banking and 36% via cellphones.
Over the past two-and-a-half years, the service has been popular for urban-to-rural money transfers. However, Absa says recent findings show that some of the most-used ATMs for withdrawing CashSend funds are located at universities and technikons.
We're not Kenya
Vermooten acknowledges that comparisons with Vodafone's highly successful M-Pesa service in Kenya are inevitable, but “SA isn't Kenya”.
The Kenyan M-Pesa service is said to have over 10 million users, but its success has proved to be difficult to replicate. Locally, Vodacom partnered with Nedbank to launch a local M-Pesa service, based on the Kenyan model, but adapted to the South African e-money regulatory environment.
Vodacom initially said at the launch of the service last year that it was aiming for 10 million users within three years. But local uptake fell short of the service provider's expectations. The service currently has 140 000 customers.
“We are in a fundamentally different environment,” says Vermooten. “For something to work here, we have to have the customers on board - and CashSend is immediately available to all 11 million Absa customers without us having to re-educate them about how to use it.”
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