Archives For April 2013

Consumers really enjoy using cash or cards. This truth means that mobile wallet providers need to incentivise users with some sort of carrot or punish users with a metaphorical stick when using cash or cards.

Accenture surveyed 4,000 smartphones users in the U.S. and Canada to find out why mobile payments haven’t exactly surged. The conclusion of the report: Mobile payments need carrots to make them work.


Some snippets from the report:

  • 60 percent of those who use their smartphone to make payments would use it more if they could track receipts.
  • 56 percent said they’d use mobile payments more if it would make managing finances easier.
  • 51 percent wanted reward points stored on the phone.
  • And 50 percent wanted coupons stored automatically and priority customer service.

To date, eBay’s PayPal is the mobile payment leader. Can eBay partner to deliver enough goodies to solidify its position? How about Google? Visa and Mastercard? Mobile payment incentives would also encourage non-users to hop on the smartphone bandwagon. One in five non-believers in mobile payments would use those systems if they could get coupons.

Security, convenience of cash and credit cards and privacy were also big concerns impeding mobile payment growth.

Ultimately we can see it’s less about technology and more about privacy, simplicity and features that customers can use. It’s difficult to see cash and the prepaid card disappearing anytime until mobile providers get their act together.


Now that ABSA has launched their banking app all the major consumer banks in South Africa have applications for all the major platforms including Blackberry, Android, iPhone and Windows Mobile. However, are all these apps equal or do some provide better service or convenience?

Despite the fact that FNB has a 21 month lead in banking apps there has been a large amount of improvement with various apps from all the banks. We’re going to look at a few factors and see how everyone compares:


ABSA is unfortunately worst off in this arena with apps only available for iOS and Android. Considering the high level of Blackberry penetration in South Africa we can see that missing out on a platform such as this is potentially very limiting. FNB is the only bank with an app for all versions of Blackberry and Nokia phones however Standard Bank is the only one to support the fairly small user base of Windows Phone.


All the apps can perform the basics such as making payments, viewing balances and transfer however both the FNB and ABSA apps fall down compared to the Nedbank app that can perform certain niche payment options such as future and recurring payments as well as multiple transactions at one. As mentioned, these are fairly niche so the benefit is relatively negligible. It’s all pretty much the same here.


An important use of the apps is the ability to buy the likes of prepaid airtime, electricity and data bundles. ABSA only offers prepaid airtime while FNB offers all three and Nedbank doesn’t allow for prepaid. We feel that prepaid electricity is the most useful of all these features (without airtime you can’t use the app anyway) so the FNB app wins here.


The FNB app allows for geo payments which is massively useful when making a payment. All in all these services can use payment services such as Nedbank’s M-PESA for sending money.

In conclusion these are all useful services but don’t expect anything more beyond basic banking. That said, simplified access to basic banking is worth it and we’re big fans of the banks approach to mobile apps.

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Today we’re looking at the MyGate payment gateway. Payment gateways are growing in popularity in South Africa as we continue to migrate to online purchases. Interestingly South Africa is limited by the amount of credit cards in circulation so other forms of payment are required meaning a payment gateway has to be fairly diverse.

MyGate works on many levels: They accept credit card payments from your website in order to facilitate eCommerce, recurring payments for automated payments, call center payments as well as providing fraud protection and full reporting functionality.

MyGate bill themselves as: “the most cost effective and innovative payment gateway in South Africa. We know how important ecommerce is or can be to your business and will ensure that it pays you to transact with MyGate. MyGate will walk you through each step to setting your website up to accept online credit card transactions.”

How to sign up:

Firstly you need a merchant bank account with a South African bank. MyGate will streamline the merchant application process by helping with the application and liaising between you and merchant bank.

You then integrate the payment gateway in your e-commerce shopping cart. Common integrations include Virtuemart, Magento and other services that are relatively easy to install. The cost of a transaction is at most R1.80 per transaction making MyGate very cost effective.

You can then receive credit cards, ebucks and the FNB cell pay point services through your online store!


  • Easy integration to common platforms
  • MyGate helps to connect with a bank
  • Helps with fraud prevention
  • Call center to help with payments
  • 3D secure and PCI compliance
  • R1.80 per transaction


  • No debit card or EFT payments
  • Some might be unhappy with the time it takes to get money into your account even though it’s often daily
  • Cannot accept foreign currency


Last week Visa launched two interesting new products to help with payments between card holders in Europe.

While only available at the end of the year, the Multi Currency feature will enable cross-border payments to be sent and received, simplifying what Visa described as a complex and expensive process. Immediate Payments feature is available already in the UK with many more markets coming soon. The service will allow customers to receive money sent using Visa Personal Payments within a matter of minutes.

Visa Personal Payments is applicable for anyone with a credit, debit or reloadable prepaid card issued by Visa. Senders simply register for the service through their chosen bank, pairing an account with their mobile phone number.

Payments are then conducted through the bank’s smartphone app; RBS and NatWest were the first to support the service in the UK last month, although Visa boasts that their respective apps were downloaded 1.7 million times in the first two weeks as a result. In total, there are 17 “live and committed issuers” across Europe.

Consumers don’t need to be signed up to the service to receive money, however. Provided they have a Visa card, anyone can login online and submit a few basic details to retrieve the funds.

The number of smartphone apps supporting the service is relatively small at the moment, but Visa has big ambitions. There are 470 million Visa cards in Europe at the moment and over 1 trillion euros was spent on Visa debit cards alone in 2012, which should give some context as to the service’s potential.

We’re looking forward to these services in South Africa and to see take up Europe. Between the banks and card providers we’re seeing some great innovation in the realm of money.

bieber-spend-smartWe reported a few months ago that Justin Bieber is releasing his own prepaid card. However, the card has come under fire. The 19 year old was paid close on 4 million dollars in order to hawk the card. Turns out, parents aren’t entirely happy with the situation.

The card has an average age of sixteen and is most commonly used to buy fast food, gas, gadgets and clothes. Positives include the ability for parents are provided with tools to track their son’s or daughter’s spending right from their smartphone or tablet. Parents get text alerts every time the card is swiped. They can also set up recurring deposits to the account, and lock and unlock the card whenever they want. And they can block the card from working at certain retailers.

Fox notes that the card has several fees including a monthly fee of $3.95, ATM fees of $1.50 for every withdrawal, $2.95 to deposit money onto the card from a debit or credit card and more. While this is nothing new for people used to banking fees, parents are taking aim at Bieber for endorsing the card and getting kids into the habit of using plastic and the debt that comes with it. In addition there is a lost card replacement fee of $7.95, ATM fees of 50 cents per balance enquiry, $1.50 every time cash is withdrawn, and a $3 charge if the card inactive for 90 days. Parents, understandably are not impressed with these costs.

“I wouldn’t get it for my children, but my sister’s daughter is just crazy about Bieber,” said one mother. Celebrities sell and Justin Bieber has a great deal of marketing influence and a huge social media outreach, so this will likely put peer pressure on teens and subsequently their parents to set up these accounts. The issuing company will get instant access to this market for an essentially unregulated gift card that has a pretty steep drain on the funds compared to a normal credit or debit card which is great for the card company.

The Bieber card has a strong “avoid” stamp on it for our American readers.

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Today we’re looking at Text2Pay, a new mobile payment system that, according to the website Text2Pay takes the pain out of online purchases. With no credit card and no signup forms necessary, Text2Pay customers can quickly, safely and easily pay for virtual goods and currency using their mobile phone. It’s as simple as that. The service is useful for companies that sell virtual goods via mobile phones; especially with in-app purchases. Text2Pay is the safe and easy way to pay for digital currency and goods online with your mobile phone. With no credit cards or signup forms necessary, you can spend more time doing what you want! The service is available for South African mobile networks as well as 49 other countries.

How it works:

The merchant asks you to use Text2Pay as a payment item for their product. When you click the Text2Pay button and enter your phone number, they send you a text message. Only after you reply TNP and agree to the charges outlined in that text message do they charge you.

You do not need a credit card or bank account to pay. The charge will appear on your next mobile phone bill, usually at the end of each month. You only require a mobile phone with an active monthly account or pre-paid with credit on it.


• No need for a credit card or bank account

• Easy access to payments via your phone; no need to dig around for your credit card

• Available for over 50 countries in the world

• Transactions are usually immediate


• You need credit on your phone for prepaid

• If you’re not on prepaid you can end up with a massive bill

Xmas timeThe South African e-commerce market has always been a fascinating place with massive players and smaller players fighting for market share. With the rise of group buying sites the market has exploded and new players are popping up everywhere.

The e-commerce environment is more competitive than ever, growing at a rate of 30% per annum according to Mark Chirnside, CEO of payment gateway PayU.

Chirnside believes that, with the increased adoption of mobile technology and alternative payment methods, e-commerce is set to really take off in all South African markets.

“This move will gain even more momentum with increased internet penetration, lower data costs and more robust security penetration – strides in the digital realm which will undoubtedly see the unfolding of exciting trends in the e-commerce environment,” he said.

New technology is making e-commerce more popular. UK based company Semafone, has a system which allows a customer to enter their credit card information using the telephone keypad while still on the phone to the call centre agent. The card data is sent directly to the bank, completely bypassing the call centre agent and call recording– eliminating agent fraud and its associated reputational risks to the parent company.

However, a major problem with online payments is that they only really cater to those that have credit cards, debit cards or the EFT option. Prepaid cards are an excellent choice for those without banks cards or without the desire to use a credit card that can lead to debt. The benefit of the prepaid option is that it can be used online.

We’re excited to be part of this e-commerce revolution with the provision of prepaid cards for online purchases. In the future we see prepaid becoming a preferred method for the underbanked and those looking for safe online purchases.