payD to allow easy SA online payments
Cape Town - Online shopping in SA has been given a boost with the introduction of a debit card payment system that promises to make the experience easy and safe.
MTN Mobile Money has launched payD, an e-commerce platform that allows users to make purchases online using bank debit cards.
"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," the company said.
The system will work in conjunction with a users cellphone when making a payment and it is similar to a transaction at an in-store pay point, the company said.
The move may provide a boost to online retailing which has generally relied on credit cards to make purchases, but in SA, a large section of the population does not have access to them.
"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," said Dave Parratt, head of new business development at MTN Mobile Money.
So-called micro-transactions have been a challenge for the industry in SA and several vendors have offered alternatives to credit card payments for online purchases.
Social network MXit allows users to make purchases with Moola, its own online currency, and recently, international payment system PayPal launched in SA.
The payD system is only available to Nedbank and Standard Bank debit card holders at present and there are hopes that will soon roll out to other banks.
One factor that may limit adoption of the system is the number of retailers.
Currently, the system is available at 77 retailers and one of the biggest brands in 1time airlines.
"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," said Rodney James, CEO of 1time.
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