Online shopping has broadened its horizons – giving debit card holders the luxury to click all the way to the bank. Credit cards are no longer the only method of payment when shopping online.
Euromonitor International, a company specialising in strategy research for consumer markets, conducted a study that showed that 35.2 million debit cards and 8 million credit cards were in circulation in SA last year.
“This method of payment clearly addresses a huge need in the market,” says Mark Chirnside, CEO of PayU, an online and mobile payment service provider. PayU processes nearly 65 percent of the total value of e-commerce transactions in SA.
“We know that only 6.25 percent of South Africans have a credit card, and that, by comparison, the use of smartphones and ordinary cellphones are growing at a phenomenal pace in Africa.
“This combination of a mobile payment solution allowing for alternative payment methods is just another way PayU is ensuring an on-trend approach to the e-commerce environment.”
This new payment solution is called PayD – pronounced “Paid” and it enables customers to make debit card payments through the mobile payment solution MasterCard Mobile.
This means that MasterCard, Visa and Maestro card holders will be able to use their pin-based debit cards issued by Absa, Nedbank and Standard Bank, and a mobile phone on the MTN or Vodacom network to pay for online purchases.
“The key feature is that it enables debit card holders to make secure online purchases,” says Chirnside.
According to PayD spokesman Dave Parratt PayD has about 240 merchants online, including 1Time Airlines, MTN, Vodacom, TakeAlot, Debonairs Pizza, Greyhound and Holiday Tours.
“It is still early, but about 150 000 people have used the system, so it is taking off,” says Parratt.
To make an online payment using MasterCard Mobile, a card holder can select to use the MasterCard Mobile payment option on a participating e-commerce site.
First-time users of MasterCard Mobile will be prompted to register their payment card of choice. They will enter their pin-based MasterCard, Maestro or Visa debit card number, the expiry date of the card (if available) and the account type (current, savings or credit).
They will also be required to enter their cellphone number. Once this is done, the card holder’s cellphone number is used to initiate subsequent payments. Authorisation of payments is done by entering the card holder’s debit card pin on their cellphone.
A recent study published by World Wide Worx and the Howzit MSN online portal, shows that 7.9 million South Africans connect to the internet using their cellphones.
In addition, this online payment method also addresses the issue of insecurity still experienced by many online shoppers.
“This method requires a PIN, and not just a card number to authorise each transaction, and, with a further link to your cellphone number, security risks are significantly reduced,” says Chirnside.
Grace Mokoto works as a receptionist for a training company in Joburg. She flies home to Port Elizabeth once a month.
It is faster and easier for her, and she is happy that she can now buying her airline ticket online without needing expensive middlemen. “I think it is about time. This will not only save me money but time,” she says.
“What we are seeing here is a whole new retail haven opening for consumers – with endless possibilities for merchants,” says Chirnside. - The Star