South Africa is exploding as a market for sms banking or mobile payments, so far there are 12 competitors in the market ranging from those attached to major banks or networks and independents such as POCit or Wizzit.
They pose a major challenge comes to South Africa’s high bank charges – the most expensive in the world according to the Competition Commission.
The cheapest so far is POCit, with each payment costing just 30c compared to a minimum of R2 for internet banking and at least R5 to draw cash from an ATM or around R7 to draw cash from a teller in a bank. And at a time where hacking into internet bank accounts has become a major problem, as well as credit card skimming, ATM bombings and frauds, cellphone payments are the safest of any with no evidence of any cellphone in the world being hacked into and leading to mobile banking fraud according to Vodacom.
The SA Banking Risk Information Centre (Sabric) said “bank related internet-based crime is being regarded as the fastest growing form of crime globally.”
In South Africa there are more than 6,5m credit cards in circulation and last year consumers spent R10,84 billion on them according to the SA Payment Association – far more than the R6,87 billion withdrawn from ATMs in the same year.
David Reynders, managing director of POCit (www.pocit.mobi on your phone or www.pocit.co.za) said, “POCit can be used on any cellphone with a colour screen on any network. POCit can send or receive money from any bank, all the payer needs is your cellphone number. POCit, a uniquely South African system, also does not require special SIM cards as some do.”
South African consumers have not yet adopted cellphone payments as eagerly as they have in Asia or the United States, where Bank of America alone has 21m clients making payments, checking account balances and transferring money with their cellphones.
Mobile payments are possibly the biggest advance in money use ever. It will have a far greater impact than credit cards which were introduced in the 1950s and are still an elite item; it’s bigger even than the ATM revolution of the 1980s. Mobile payments offer cheaper and more extensive payment options and open the possibility of the currently unbanked gaining access to the financial system.
In 2006 alone, 150 million migrants worldwide sent US$300 billion to their families in developing countries through more than 1.5 billion financial transactions, most of which bypassed banks according to the United Nations.
The United Nations International Telecommunication Union says Africa had 65 million new mobile telephone subscribers in 2007. Cellphone penetration rose from one in 50 people in 2000 to a third of all Africans population today.
Walter Volker of PASA says that mobile banking will become the easiest way to pay. Last year there were 27 951 541 internet payments worth R41,98 billion according to PASA, and 24,3m ATM withdrawals worth R6,8bn.