Now you can shop online with your PIN-Based bank card!
eCommerce service provider, MTN Mobile Money, has launched a mobile payment mechanism, which will enable users to purchase products online using a PIN Debit card. MTN Mobile Money says the mechanism, called payD
On the consumer side, only three percent of our population has credit cards, and this is generally the only way to transact online. On the merchant side, transaction costs for credit cards cut deep into margins and this reduces the range of products that e-tailers are able to offer online.”The ability to purchase online using debit cards, takes the percentage of potential South African online customers from 3% to 60 percent of the population. MTN Mobile Money claims that the increase in uptake will also result in a drastic cut in online transactional costs.
payD uses the Authenticated Mobile Transaction (AMT) technology developed by MTN Mobile Money, which uses SIM and PIN technology to transform any mobile phone into a secure, encrypted point-of-sale terminal. First customer? 1Time Airlines: More info: http://payd.net/is-payd-safe/
On the consumer side, only three percent of our population has credit cards, and this is generally the only way to transact online. On the merchant side, transaction costs for credit cards cut deep into margins and this reduces the range of products that e-tailers are able to offer online.”The ability to purchase online using debit cards, takes the percentage of potential South African online customers from 3% to 60 percent of the population. MTN Mobile Money claims that the increase in uptake will also result in a drastic cut in online transactional costs.
payD uses the Authenticated Mobile Transaction (AMT) technology developed by MTN Mobile Money, which uses SIM and PIN technology to transform any mobile phone into a secure, encrypted point-of-sale terminal. First customer? 1Time Airlines: More info: http://payd.net/is-payd-safe/
Low-cost airline 1Time and 79 others have the service.
JOHANNESBURG - MTN (JSE:MTN) mobile money has launched a new online payment method which will allow you to make online transactions with your debit cards.
payD will allow consumers who don’t have or qualify for a credit card to be able to make online transactions using their debit cards, and using their phones as a “key pad” with which to enter their pin. It enables customers to use pin-based bank cards to make online payments using their cellphone, card number and ATM pin in a highly encrypted authenticated mobile transaction (AMT).
1time Airlines, one of the country’s low-cost airlines has embraced the move, and partnered up with payD, making it the first airline on the continent to allow passengers to flight tickets online using a debit card – a move aimed at increasing its market share.
1time Airlines CEO Rodney James (pictured above) says that the introduction of payD is aligned to the airlines core customer objectives. “We are consistently aware of the need to offer our customers innovative options that are more convenient, safer and user friendly, and thus, we are proud to be one of the first airlines to offer this service. The use of payD broadens the options available to customers on our website, protects them against possible fraud, and further simplifies the process of purchasing tickets online,” said James.
How the system works, users will select the payD payment method on the 1time website. First time users will have to register using their cellphone numbers and entering their debit card details – namely you debit number and expiry date -should it be requested. After registration, debit card details will no longer be required; your cellphone number is all that’s required to identify you as a payD user. A SMS will then come through to the passenger’s cellphone requesting them to authorise the transaction and type in their pin code on the cellphone. The outcome of the transaction will then appear on the company website – either approved or declined, should you not have sufficient funds or added in the incorrect information.
All normal bank transactional costs apply – there are no additional fees to registering or making use of the system. In addition to 1time, there are some 80 other online merchants through which payD will be able to make purchases.
Douglas Henderson, MasterCard’s vice president of advanced payments for the Middle East and Africa, says that the payD system is one that helps to facilitate and already existing and efficient banking and payments system. Dave Parratt (pictured above), head of new business development at MTN Mobile Money allayed fears of security concerns that might exist with regards to the payD product. “A critical element to payD’s security, apart from the high levels of hardware-based encryption, is that the service will only work for the registered user via their personal mobile phone. So there needs to be three elements simultaneously in place for the service to work: the debit card, the registered phone and the ATM PIN,” says Parratt.
Is the system flawed?
According to Parratt, e-commerce has only contributed about 0.36% of the country’s total revenues. He explains that the reason for this is that “only 3% of the country’s population has credit cards and this is generally the only way to transact online. On the merchant side, transaction costs for credit cards cut deep into margins and this reduces the range of products that e-tailers are able to offer online”, said Parrat.
Currently, Standard Bank (JSE:SBK) and Nedbank (JSE:NED) PIN-based debit cardholders on the MTN and Vodacom networks can use payD, with more banks coming on board within a year. In the meantime if you’re an Absa (JSE:ASA), FNB, 8-ta, Cell C or Virgin mobile user- you won’t be able to make use of the payD service as theses providers’ have yet to join the project. Considering the fact that over 60% of South African’s have debit cards its surprising that some of the banking stakeholders have been reluctant to allow their clients to make use of the payD service. Henderson explains that there is a question of some of the “other banks could are still be in the process of testing the offering.”
Should more mobile operators, banks and merchants jump on board, it’s likely to see the number of debit card online transactions sky rocket.
