Banks in South Africa hold the key to whether mobile payment systems like Apple Pay could be widely adopted in the country, writes DUNCAN ALFREDS.
Apple Pay and Google Wallet enable users to make payments directly and securely from smartphones. Both of these payment systems use the Europay, Mastercard and Visa (EMV), or chip-and-PIN, standard.
This means that an Apple Pay or Google Wallet could be simply linked to a credit or debit card, and users pay by tapping their NFC (Near Field Communication) enabled phone on a point of sale terminal. With the iPhone 6, users can also authorise payments with their fingerprints.
Apple Pay has recently been launched in the UK after it received a cool reception in the US. Meanwhile, Google Wallet is also slowly rolling out with a limited number of merchants. Google, though, has built the technology into its online Play Store system as well.
South Africa has adopted the international EMV standard, meaning that Apple Pay and Google Wallet could work in the country especially with regard to processing contactless payments.
But unlocking Apple Pay and Google Wallet for South African consumers requires the approval of local banks.
“There is however a big catch before Apple Pay and Android Pay will work in South Africa. The customer’s bank that issued their card must give permission to Apple and Google to allow their cards to be loaded to the Apple Pay or Android Pay application,” Craig Kilfoil, managing director of ExactConsult, told Fin24.
“In summary, if the big five banks don’t want Apple Pay or Android Pay to work in South Africa then it simply won’t happen because the big five banks control the merchant card acceptance infrastructure and completely dominate card issuance in South Africa and as much as Apple and Goggle might make the mobile payment technology available, it just won’t work without the permission and co-operation of the banks,” said Kilfoil.
Even though the payment systems from Apple and Google are advertised as unique, Kilfoil argued that they may be far in common than initially thought.
“While neither obvious nor advertised by Apple and Google as such, I have concluded that Apple Pay and now Android Pay are 100% interoperable as they are both built on Visa and MasterCard Chip card technology called EMV.”
In some markets, the technology is already in use, but roll-out in SA has been delayed because of the lack of devices that support the standard.
In the meantime, banks have marketed cards with so-called “tap-and-pay” technology, but it is not a huge jump to expand the functionality to appropriate smartphones.
Ultimately, the banks hold the cards in terms of the roll-out of mobile contactless payments, said Kilfoil.
“FNB, Absa, Standard Bank, Nedbank and all the others would need to allow for their cards to be loaded to the mobile phone apps in order for them to work.”
A survey has found that few companies are ready for mobile e-commerce, despite the massive handset penetration in the country.
The wiGroup Fast Company SME Mobile Readiness Survey found that 35% allowed customers to make purchases on mobile devices.
But mobile payments are likely to increase in importance as more people turn to smartphones to transact.
Globally, Juniper Research reports that mobile e-commerce sales amounted to $1.5 trillion in 2013, and is projected to hit over $3.2 trillion by 2017.
Convenience, cost, risk
Kilfoil said that the key for retailers was to balance convenience, cost and risk to encourage consumers to adopt mobile payments.
“If convenience is a key factor and the added cost is minor with little perceived additional risk then consumers that value convenience will adopt new payment method.”
Kilfoil will be presenting his findings into the mobile payments industry at Cashless Payments Summit on June 25 – 26 2015 at Emperors Palace Hotel in Johannesburg.
* Follow Gadget on Twitter on @GadgetZA
Welcome to world of 2099
The world of 2099 will be unrecognisable from the world of today, but it can be predicted, says one visionary. ARTHUR GOLDSTUCK met him in Singapore.
Futuristic structures tower over the landscape. Giant, alien-looking trees light up with dazzling colours amid the hundreds of plant species that grow up their trunks. Cosmetic stores sell their wares via public touch-screens, with products delivered instantly in drawers below the screens.
This is not a vision of the future. It is a sample of Singapore today. But it is also an inkling of the world we may all experience in the future.
Singapore was the venue, last week, of the World Cities Summit, where engineers, politicians, investors and visionaries rubbed shoulders as they talked about the strategies and policies that would enhance urban living in the future.
As part of the Summit, global payment technologies leader Mastercard hosted a small media briefing by one of Singapore’s leading thinkers about the future, Dr Damian Tan, managing director of Vickers Venture Partners. The company’s slogan “We invest in the extraordinary,” offers a small clue to Tan’s perspective.
“We look as far forward as 2099 because, as a venture capital firm, we invest in the long term,” he tells a group of journalists from Africa and the Middle East. “Companies explode in growth because there is value in the future. If there is no growth, they won’t explode.”
The big question that the Smart Cities Summit and Mastercard are trying to help answer is, what will cities look like in the year 2099? Tan can’t give an exact answer, but he offers a framework that helps one approach the question.
“If you want to look at 81 years into the future, and understand the change that will come, you need to double that amount and look into the past. That takes us to 1856. The difference between then and now is the difference you can expect between now and 2099.”
- Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube
Use the page links below to continue reading about Tan’s visions.
Win a Poster Heater with Gadget and Takealot.com
This winter Gadget and Takealot.com are giving away three Poster Heaters, which look like posters but become heaters when you plug them in.
Three Gadget readers will each win a unit, valued at R550 each. To enter, follow @GadgetZA and @Takealot on Twitter and tell us on the @GadgetZA account how many Watts the heater consumes.
What’s the big deal about these heaters? Many of us are struggling to keep the balance between soaring electricity costs and the need to keep warm this winter.
However, the recently launched Poster Heater by EasyHeat and distributed in South Africa by Takealot.com is not only one of the most cost effective electric heaters currently on the market, it is also easy to setup and use.
As the name indicates, it is a poster similar to one you would hang on a wall. But, plug it in and it turns into a 300 Watt heater. The Poster Heater isn’t designed to heat hallways or large rooms, but rather smaller ones like a bedroom or a baby’s nursery or a dressing room.
It uses radiant heating, which means that it heats up in a couple of minutes and the heat is directed at the objects or people around it, quickly taking the chill out of the air and providing a comfortable ambient temperature.
The other advantage of radiant heating is that it doesn’t dry out the air like infrared or gas heaters. Users also don’t have to worry about their children or pets getting too close to it because, even though it gets hot, it can be touched.
To enter the competition follow the steps below:
Competition entry details:
3. The competition closes on 31 July 2018.
4. Winners will be notified via Twitter on 1 August and Takealot.com will be in touch to organise delivery.
5. The competition is only open to South African residents.