ABSA will this week reveal the identity of a retail partner it is tying up with to launch a system that allows consumers to pay for goods and services via their cellphones.
The contactless payment or near-field communication (NFC) payment solution is currently on trial with more than 500 users. It allows consumers to load a maximum of R3,000 a month on their contactless wallets once they have downloaded “OneTouch”, the mobile app.
This reduces the risks of carrying cash.
Absa said the “game-changing” innovation “is set to fundamentally change the way merchants in the commercial and enterprise segments make payments”.
The NFC payment method is used in Cape Town’s MyCiti bus system and also being tested in Johannesburg’s Rea Vaya rapid bus system.
Standard Bank has introduced the Muvo Card in Durban, which is very similar to Absa’s offering in Cape Town.
Rugby fans have already experienced it when the system was tested at Absa Boktown in Pretoria during a Springbok test match against Argentina.
According to Absa’s head of consumer banking, Simon Just, more than 1,100 merchant devices have been rolled out. Absa’s parent company Barclays has a similar system in the UK, with outlets such as McDonald’s, EAT, Pret à Manger, Subway and The Co-operative Pharmacy allowing consumers to use NFC-enabled phones or cards.
AT Kearney financial services principal Cecily Carmona said for the system to work it must be taken up by more retailers. It took South Africa about two to three year to move to micro-chipped cards.
Adrian Vermooten, head of digital banking at Absa, said the group viewed the project as a five-year process before technology and infrastructure was at a level where more consumers would be using it. He said it would take some time for consumers to use it widely.
Absa has partnered with Woolworths, after it took over its loan book, to facilitate online shopping. It has had similar projects with Edcon, the owner of Edgars, Jet and CNA. Earlier this year, it partnered with Mr Price.
At the time, Absa’s head of retail markets, Arrie Rautenbach, attributed the acquisition of the “landmark deal” to significant progress the bank had made as a key player in the growing e-commerce industry.
Banks are waiting for the Payment Association of South Africa to finalise rules dealing with NFC before they can allow each other’s customers to use the different banks’ contactless platforms.
* This article was first published in Sunday Times: Business Times