Local business is taking the teller out of a credit card transaction, with software that uses mobile phones as a credit card processing platform.
Stepp Mobile Payment Solutions has taken internationally developed financial platform Paylink and tweaked it for the South African environment. The solution turns any WAP- or WIG-enabled phone into a point-of-sale (POS) device that can accept credit card payments.
The service is delivered via Internet, cellphone and landline, and any backend hardware and software is managed on secure mobile networks and by Stepp itself.
"The device becomes a secure wireless POS device that can be used for various credit card transactions, anywhere and anytime," says Stepp CEO Rocco van Tonder.
The package allows users to capture the credit card details along with the transaction amount on the phone's keypad. The information is transmitted to the bank where it is authorised in real-time. The transaction value will then be settled to the merchant's account before being transferred into the local banking account.
Each payment is then governed in the same way that normal POS devices conduct financial transactions, he adds. "The transactions also take place on the MTN and Vodacom networks under the same banner as cellphone banking. The security that the mobile bankers use will apply to the transactions in Stepp."
The company says all transactions are accompanied by a return SMS, confirming the transaction's status. "Accessing the software on the phone requires a password, so extra security is built into that," says Van Tonder.
To gain access to the service, a cellphone number and SIM card need to be registered. "The registration process helps to keep the security tight, because the software will only be active for a specific number combined with a specific SIM card," notes Van Tonder.
He says the company's primary clients are large corporate organisations with resellers who use the device in branch-like facilities. However, the company is looking into the consumer market for personal transactions. "At the moment, people are still a little afraid of financial transactions on the mobile phone, but this is changing slowly."
Criminal element
Local analysts say the device is receiving good reviews on the international market. However, the technology is still relatively new in the local market.
According to the South African Banking Risk Information Centre, the country saw a 59% increase in card fraud, with an 81% increase in incidents relating to the fraudulent use of lost and stolen cards. In the same study, credit card fraud in SA last year amounted to about R350 million. More current figures are not yet available.
Authorities have also reported an increase in incidents of SIM swapping and identity theft. At the beginning of the month, the e-commerce unit of the South African Police Service began a large-scale investigation into SIM swap fraud, after R90 460 was transferred from a non-profit organisation's account.
According to Stepp, the risk of fraud on the mobile system is low, because cards are not handed over - preventing skimming - and all transactions happen in real-time.
"To have a primary account, it will cost around R180 per month. Sub-users can also be added at R90 a month on a sliding scale, depending on the number of added users," says Van Tonder. Payments made to the sub-user will go directly into the primary account, making it an ideal solution for waiters in restaurants and similar situations, he adds.
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