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Although South Africa is still very much a cash-based economy, innovative platforms and apps such as Uber and SnapScan are gently pushing us toward the trumpeted mobile payments revolution. And if the numbers are to be believed, we will be part of a global shift in consumer behaviour.
Gartner expects that by 2018 more than 50% of consumers in mature markets will use smartphones or wearable devices to make mobile payments.
So who is cashing in on this trend? For savvy local entrepreneurs, this is undoubtedly a good time to be finding ways to ease SA consumers into a new, cashless way of transacting.
finweek discovered an interesting example in KaChing, a ticketless parking app that uses licence plate recognition (LPR) technology to open the boom when users arrive at, and exit, a parking lot.
The app automatically deducts the parking fee from user credit cards or prepaid accounts when they exit.
The service launched on a commercial pilot basis in 2015, and is available at Melrose Arch, Campus Square and Morningside shopping centres in Johannesburg, and will soon be available at Thrupps Centre in that city and at The Pavilion in Durban.
Jaco Marais, co-founder and managing director of KaChing, says that the app is having a visible impact on consumer behaviour, as it addresses a common (and daily) pain point.
“We want our users to have a hassle-free experience and we want the shopping centres to reap the benefits of this convenience,” he explains.
“Customers feel welcomed like VIPs when visiting a KaChing-enabled centre, which leads to increased time spent on site at the respective mall, as opposed to having to quickly vacate before the free parking period expires – or having to rush off once the ticket has been paid for at the pay station.”
According to Marais, there’s also an important security element to the offering – which is often a key selling point for any type of new mobile payment service.
“Users are informed the moment their car exits a parking lot, via a payment notification SMS,” says Marais. “So if they are enjoying a relaxing time with friends and suddenly receive an alert that their vehicle has left the facility, they can immediately phone their insurance or vehicle tracking provider and inform them.”
For landlords, Marais insists that there are many immediate benefits to adopting the app, although he admits that there is usually some initial resistance.
“Resistance to change is natural, but we are finding that once landlords fully understand the benefits of KaChing, they become really excited about what it offers them,” he says.
“Because KaChing is homegrown and serviced in South Africa, it can be installed at 10% to 20% of the cost of a conventional pay station system. The KaChing system also constitutes reduced operational expenditure by eliminating the need for tickets, as well as reducing theft and cash-handling costs.”
The start-up makes its money from the landlords and loyalty programmes, as well as value-added services available to the mall and users.
“An example of this value-added service is a partnership we have with Virgin Active Melrose Arch,” says Marais. “A code is available for users to scan at the gym, and if they take advantage of this benefit, their parking is validated for two hours.”
Marais says that in the long term, the company hopes to “reward consumers for shopping at a particular supermarket or using a particular facility and having their parking paid for by that shop or facility”.
“It’s a win-win situation as consumers get free parking and companies will see an increase in loyal and returning customers,” he explains.
“Then there’s the possibility of expanding into office spaces or residential properties – allowing for quick and easy access for tenants to the property, and even allowing visitors access to the property if they are loaded on the system. While these are all possibilities, we would like to make sure that we are in as many of South Africa’s popular shopping centres as possible, before we expand to other areas.”
This article originally appeared in the 24 March 2016 edition of finweek. Buy and download the magazine here.
