Payment tech to replace cash

2014-06-10 13:05 - Duncan Alfreds
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The Jolla smartphone powered by Sailfish is aimed at taking on Google Android operating system. (Duncan Alfreds, News24)

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Cape Town - Nothing seems more natural than whipping out a R20 note to pay for a drink at a local coffee shop.

But that could soon be a thing of the past if cash-less payments gain in popularity. Not card payments where you punch in your PIN - the new technology relies on NFC (Near Field Communication) on mobile devices.

While NFC isn't new, a security company has developed a sticker that could see wide adoption of the payment system.

"The Near-Field Communication (NFC) stickers, once stuck on the handset, can turn any mobile phone, even if it is a low end or a feature phone, into an NFC phone," Benjamin Binet, vice president of Gemalto Southern Africa told News24.

The sticker would enable a range of financial services for a large majority of people who, despite having cellphones, depend on cash for goods and services.

Economic boost

"By providing their customers with those types of bridging technologies, banks and mobile operators can help set up the scene for Africa to embrace contactless payment convenience," Binet added.

The move toward e-payment is differentiated from e-commerce in that the latter often refers to payments for goods and services online, whereas the former could be used as a complete replacement for cash in face-to-face sales.

NFC technology is already being employed in developed countries.

In Japan, some retailers have a programme where you pay for groceries simply by swiping your phone at the checkout. Absa conducted an NFC trial with its workers where payment with mobile phones could be concluded at ATMs.


More people might be included in the formal economy if mobile cashless payments go mainstream. (Duncan Alfreds, News24)

The technology has also been employed in public transport systems where users simply wave a card to make the payment. Using the same technology with mobile phones seems to be the next logical step.

Cashless payment could boost the economy especially as the technology is integrated into virtual currencies. Many people in poor and rural communities could be included in the formal economy by using the payment system.

"Contactless mobile payment based on NFC technology could nicely complement existing mobile money solutions such as M-Pesa. Whereas mobile money solutions enable remote mobile payment, NFC mobile contactless solutions offer end users a new and convenient way to pay in a contactless mode in shops," said Binet.

Security

However, given that mobile devices are targets for criminals, the theft of a cellphone won't mean that the crook has immediate access to your bank account.

Binet said that the NFC payment function can be secured with a password and even that sticker could be secured.

"You would be contacting your bank or the service provider supplying you with this NFC payment method, asking them to deactivate the contactless payment card embedded in the NFC sticker."


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