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Debit cards for e-tail



MTN Mobile Money today announced the launch of payD, a service that allows South Africans to make online purchases with their PIN based debit cards.

MTN Mobile Money today announced the launch of payD, an e-commerce payment mechanism that allows South Africans to buy online using their PIN-based bankcards. For the first time, debit card holders can buy, securely, online. This will provide a much-needed boost to the lagging local e-commerce market. 1time Airline is leading the way as the first airline in South Africa to embrace this new online payment technology.

payD removes a significant obstacle to e-commerce’s mainstream adoption in South Africa ‚ finding a convenient and cost-effective payments mechanism that doesn’t require the opening of yet another bank account.

World Wide Worx’s Online Retail in SA 2011 report shows that retail e-commerce hit R2 billion last year. ‚This sounds big,‚ says Dave Parratt, head of new business development at MTN Mobile Money. ‚But it’s just 0.36% of our country’s total revenue sales. Why is it so incredibly low? The answer lies with both the consumer and the merchant. On the consumer side, only 3% of our population has credit cards, and this is generally the only way to transact online. On the merchant side, transaction costs for credit cards cut deep into margins and this reduces the range of products that e-tailers are able to offer online.‚

payD increases the potential universe of consumers from 3% of South Africans to the 60% who have debit cards, and it drops the transactions fees by at least a third.

1time is among the first to integrate payD into its offering. Rodney James, CEO of the airline, says, ‚payD will make paying for 1time flights even easier. Although we have a wide customer base, not everyone has a credit card with which to purchase their tickets online We have been looking for secure and convenient alternatives to the cumbersome EFT or bank deposit payment option for too long. payD fits the bill perfectly. As more banks become operational on the system, our ability to serve customers in the way they prefer will grow.‚

Currently, Standard Bank and Nedbank PIN-based debit card holders on the MTN and Vodacom networks can use payD, with more banks coming on board within a year. ‚As a payment mechanism, payD is completely partner neutral. Standard Bank and Nedbank are the first banks operational on the system but will soon be joined by other major institutions,‚ says Parratt.

payD uses the Authenticated Mobile Transaction (AMT) technology developed by MTN Mobile Money, which uses SIM and PIN technology to transform any mobile phone into a secure, encrypted point-of-sale terminal.

‚A critical element to payD’s security, apart from the high levels of hardware-based encryption, is that the service will only work for the registered user via their personal mobile phone. So there need to be three elements simultaneously in place for the service to work: the debit card, the registered phone and the ATM PIN,‚ says Parratt. ‚It is as secure as walking into your nearest shopping centre, but it works online.‚

For more information on payD, and a list of the additional 80 online merchants currently accepting payD, please go to For more information on 1time, please visit


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