Mobile payment service introduced in South Africa


Unbanked South Africans in rural communities and townships can now access a variety of financial services through MobiCash, a recently introduced mobile payment services platform

According to MobiCash, the system creates a cashless service for customers, allowing them to pay for goods at registered spaza shops, retailers and wholesalers by processing payments on their mobile phones.

The mobile money platform, a partnership between cashless financial services company MobiCash and cellphone payments company Boloro, has already been introduced in other parts of the African continent such as Botswana, Ghana, Kenya, Rwanda, Uganda and Malawi, where the company says it is doing “very well”.

The multi-services platform, headquartered in Hong Kong, targets mainly townships and communal markets, it can also be used by merchants to place orders with their wholesaler, through the MobiCash m-commerce option.

Donald Mudenge, COO of MobiCash, says financial inclusion remains a big challenge in SA and Africa as a whole. Banks and other private and public financial institutions, in their endeavour to deliver financial services on a large scale, have been limited due to the lack of technological, regulatory and physical frameworks that have the propensity to cater for the majority of the population regardless of their social and economic standing

“It is out of this realisation that MobiCash was established to address these underlying challenges by creating a disruptive mobile platform which combines “proximity” and “remote” access technologies that are geared towards serving all categories of customers – educated, illiterate, rural inhabitant, urban dweller, youth, aged  – it is for everybody,” he points out.

Explaining how it works, Mudenge says a customer can register with a MobiCash agent and deposit funds into their virtual account.

“The funds are transacted directly into an e-wallet account via the MobiCash app [if the user has access to a smart phone] or through an Unstructured Supplementary Service Data push [if the user has an ordinary phone],” he explains.

Upon registration, the customer is given a Network Smart Card (NSC) sticker, which is put on the back of their mobile device. During payment at the retailer, the teller uses a NSC reader to scan the sticker, allocating the funds, which are then used to process the payment, he continues.

“Users can top up their MobiCash accounts with an agent, merchant, ATM, bank teller or via EFT whereby their mobile number is used as reference,” he points out.

The introduction of MobiCash to the SA market comes almost two weeks after Vodacom pulled the plug on its mobile money offering M-Pesa in SA, saying there was little prospect of the service to achieving a critical mass of users in its current format in SA.

Anticipating MobiCash’s reception in the SA market, World Wide Worx MD Arthur Goldstuck, says there is always room for a new mobile payment service if it can create a demand through effective marketing and distribution.

“That doesn’t necessarily mean there is a need for the service, or that there is any guarantee of success.

“MobiCash appears to use Near Field Communicationtechnology, which is becoming fairly well-integrated into mobile wallets, and could allow for wider uptake,” he explains.

Dominique Collett, senior investment executive at Rand Merchant Investment Holdings and head of AlphaCode, says there is always space in the market for a new money service of this nature. However, she warns to compete in SA, one has to have a lot of building blocks in place to launch a mobile money transfer product.

“There are some very strong products in the market like Shoprite Money Market, FNB eWallet and Mobile Money from MTN. All of these products have strong distribution networks and large cash acceptance and disbursement access points-critical elements of a remittance product.

“They are also backed by strong brands which engender trust in the product by the consumer. For Mobicash to succeed in SA, it would need to have these elements in play and also strong regulatory support,” she advised.

The mobile platform seems to be focusing on the superior tech aspects of the product which will not be sufficient to succeed here. Customers don’t lack access to good tech – they lack access to the product and functionality, which comes via strong distribution and cash networks,” she went on to say.

Discussing what sets this service apart from other mobile money platforms, since similar services have not taken off in SA as well as other parts of the continent, Mudenge says if any technology can work in Rwanda then it can work anywhere else in the world.

“Most players in this space assume that because SA is more technologically advanced than most African states, their mobile money technology service will be an instant success when deployed here, but that’s not always the case,” he observes.

For that reason, when entering the market, he explains that mobile money players have placed over-emphasis on person to person (P2P) transfers which are characterised by cash in (deposit) and cash out (withdrawal) transactions.

“However with MobiCash, our technology is disruptive in the sense that we are creating wider channels for users to transact within the virtual realm and they are able to perform their day-to-day transactions such as buy a loaf of bread, buy your mother a dress without the need for making cash withdrawal”, he elaborates.

However Goldstuck has a few concerns, mainly that the service relies on several steps such as registration and depositing funds to eventually conclude a payment transaction.

“Mobile payments are moving to a one-pass, one-tap environment, in the sense that a single pass of a scanner over a code, or of a device over a point of sale, along with a single tap, should initiate and complete the transaction.

“To the extent that MobiCash can do this seamlessly, it has a chance to compete, he observes.

Mobicash says through the service, customers have access to a variety of MobiCash value-added services such as insurance – health, life and funeral policies – tax returns directly with local tax authorities and cash remittances. There are no account fees or transaction fees levied on the account. It is absolutely free to open, keep and operate.d economic standing.

Comment with your Facebook