MasterCard partners on new mobile service in South Africa
Payment giant MasterCard is joining with Oltio, a South African mobile payment and financial services company, to introduce MasterCard Mobile to the South African market. In an announcement of the partnership, MasterCard said the new product will enable consumers holding either MasterCard or Maestro cards through three South African banks — Absa, Nedbank and Standard Bank — to use their mobile phones to pay for online purchases. This is especially good news for South Africa's Maestro Cardholders as they haven't been able to make secure online purchases before.
"The MasterCard Mobile innovation will enable millions of South Africans to make secure purchases using their PIN-based bank cards," said Oltio CEO Terry Timson. "It’s a convenient and cost-effective payment mechanism that doesn’t require customers to open yet another bank account. This pioneering technology means consumers can benefit from the competitive prices, convenience and variety associated with buying online, simply by registering their MasterCard or Maestro PIN-based credit or debit card to transact."
To use MasterCard Mobile for online payments, cardholders simply select it as a payment option on participating sites. First-time users will be asked to register their card and connect it with a mobile phone number. The consumer can then make the online purchase, and all subsequent purchases, by entering an associated mobile number instead of a credit card number. A text message is sent to the device for confirmation. When the customer sends back the PIN for the account, the purchase is authorized; the merchant receives confirmation and the customer receives an electronic receipt.
"While providing greater convenience, MasterCard cardholders have peace of mind knowing that once registered with MasterCard Mobile they no longer need to share their card details online," said Anna Jones, division president at MasterCard Worldwide in South Africa. "Instead, the information remains secure with MasterCard Mobile which verifies and concludes payments on the cardholder’s behalf."
Jones said the solution is important in another way as well: It doesn't levy any additional fees on a cardholder and the payment is made to the merchant instantly.
MasterCard said the MasterCard mobile is still in testing, but will also enable person-to-person payments and even be available at traditional brick-and-mortar merchants as a payment option in the future.
“MasterCard Mobile is currently being piloted and we are looking to roll-out the platform to most e-commerce sites in South Africa in the near future," Timson said.
For more on this topic, visit the Mobile/Digital Wallet research center.