Payment innovation in South Africa bridges the imperatives of both the developing and developed world, and offerings in this country are proving popular.
This is the view of Ngoni Simelane, head innovation of mimoney and Instant Money payment solutions, powered by Standard Bank, who adds: “While there is a drive in the US and Europe, to provide wallet and API solutions on smart phones, payment innovation in the developing world, particularly in Asia and Africa, tends to concentrate on the movement of cash between sender and receiver, typically over large distances.
“The phenomenon of large scale remittances sent by employed relatives to folks back home in the developing world, is a major stimulant to payment innovation, particularly via the mobile phone,” he says, adding that there is huge momentum to provide seamless and frictionless money transfer transactions.
Standard Bank’s Instant Money cash transfer solution. offered at Spar retail outlets, has shown substantial growth since its launch in March last year, with a 40 percent month on month growth.
While remittances provide the major impetus for cash transfer innovations, major opportunities exist to supply e-currencies within a mobile wallet in Africa. For example, locally developed virtual payment mechanism mimoney is currently being piloted in that country to facilitate virtual payments on behalf of Standard Bank.
There are an estimated 45-million phones in South Africa . This is three times the number of those who have access to the Internet.
Indeed, the mobile phone is pivotal to international payment innovation at present. At a recent conference on Alternative Payment Systems Innovations in San Francisco, most of the focus was on the mobile platform. At the same conference, Mohammad Khan, President of ViVOtech, the NFC payment and promotion solution provider, claimed that 2011 would be the year of NFC and at least 60-million to 70-million NFC enabled phones are expected to be released, mainly in the US, this year.
Armed with this new functionality customers would begin to ask for places to use it, driving merchants to merchants to upgrade their POS equipment to accept tap-and-go payments.
"South Africa is still some way off mainstream NFC, but several pilot projects are already being mooted," Simelane says.
Predictions made at the conference were that NFC enabled smart phones would generate the next generation of phone apps that have nothing to do with payments but would rather get consumers hooked on tapping.
“Tapping for consumers would incorporate tapping posters to receive coupons, tapping labels on store shelves to learn about products, tapping when you walk into a store to check-in and receive offers, tapping phones with someone you meet instead of exchanging business cards, etc.,” Simelane says.
Conference attendees agreed that the convergence of virtual and physical purchasing, social networking, rewards and promotions will be solved through the mobile phone.
Control of the consumer is key. The “one who enrolls (is the one who) controls” is as true with m-payments as it was with e-payments and bill payments before that. However, no longer is this control of the consumer limited to a tug-of-war between the banks and the merchants.