Try out cellphone banking
by Andrew Smith on 03/11/08 at 11:14 am
17 comments
After a restaurant meal with friends, have you often scrambled to try and gather the correct change to pay the R163.50 that you owe for your share? Usually one person will offer to pay for the whole amount on a credit card, and that leaves the rest of you with a whole lot of note swapping and mental arithmetic.
Enter cellphone banking. You launch a little application, enter the phone number of the person who covered the bill and “R163.50″, and hit “send payment”. Makes a whole lot of sense, doesn’t it?
I recently came across POCit, one of the independent companies (ie not one of the banks) trying to usher in a new era of banking. It’s still early days, but their infrastructure is sound, their application simple to install and use, and they’re aiming to market aggressively in 2009.
Here’s what I love about this new payment industry:
- It’s safe. You load your bank and/or credit card details into your profile, but nothing is stored in your phone. To make a payment you have to log in to the app with a pin, so there is no harm if your phone is stolen. You don’t have to worry about cash or cards getting lost, and your credit card details are never given to the recipient of your money, so there can’t be any “card skimming”.
- It’s convenient. You’ll always have your phone on you, and you won’t have to carry cash or cards. You will be able to pay R1 to a friend or R10,000 to a shop (once this takes off).
- It’s cheap. It’s basically free to use during this initial period, but even when the costs come in to play in January 2009 it will still be much, much cheaper than cash withdrawals, cheques or internet transfers. If your credit card is hooked up you will get your air-miles and free credit for what used to be cash payments.
- It cuts out the banks. Well, not yet, but once the legalities are sorted out you will be able to store money in your POCit “account” and make and receive payments without going through a traditional bank account. South Africans have been crying foul about our inflated bank charges for years – this is probably the only hope we have of the banks sitting up and realising that their effective monopoly on payments is coming to an end.
POCit have targeted person-to-person payments by keeping costs low in order to grow a user-base, and then they will start marketing to merchants to use this for B2C transactions. Basically every business that receives any form of payment is a potential POCit client – from your dentist, a taxi and any-sized retail shop (physical or online). Here are the advantages for merchants:
- Get started straight away. The normal process for accepting credit cards in your business involves begging and pleading with a bank in order to get a merchant facility. It’s a real pain and it’s expensive until you’ve built up a long track-record. You can get a POCit facility with no fuss, and your rates decrease automatically as your volume increases.
- Decreased fraud. The bane of e-commerce is fraudulent purchases because there is very little that can be done to verify a customer. POCit makes sure a customer owns the credit card that they link to their profile. This only has to be done once, and then all transactions with different merchants are effectively verified.
- Fewer excuses. Paying with a cellphone is more convenient than other forms of payment, and can be done on the spot. POCit reckons that doctors alone are losing R500m a year to bad debt because once a patient has left it’s hard to get them back to pay. With POCit merchants can “request” a payment from a customer, which sends a message to their phone with all of the details embedded. If the customer already has POCit they just have to approve the transaction and the payment is made.
I’m not an employee or shareholder in POCit (although I wouldn’t mind being the latter!), but I am passionate about services that make it easier for small businesses to stay afloat, and I think this is one of them.
[Unfortunatly POCit no longer offer the referral fee, so I can't give you R10 to sign up any more. It's still worth trying though!]
Good luck POCit and the rest of the players in this industry. To the big banks – be afraid!
Andrew Smith is the pedantic systems guy behind Live Alchemy, a SA e-commerce company. Andrew writes for Ideate in an attempt to make the world a more efficient place. View more articles by Andrew Smith.
Tags: banking
Martin
Nov 3rd, 2008
How about withdrawing money from POCit? If somebody pays me via POCit is the only way to use that money to pay somebody else using POCit, or can I transfer the money to my bank account?
Andrew
Nov 3rd, 2008
Hi Martin
Currently money doesn’t stay in your POCit account at all. It will go straight into your bank account or credit card. When the banking licenses are sorted out you will be able to keep money in your POCit account until you choose to withdraw it.
mike
Nov 3rd, 2008
great post you have here! keep up!
Janice
Nov 3rd, 2008
Cool! About time the banks were given some challenges for their outrageous bank charges. I like the fact that I can bank anywhere with POCit and not have to go online or into a bank (my worst!)
Martin
Nov 4th, 2008
I tried to sign up, but my cell phone wouldn’t download the application – said it didn’t have enough space. I think they should have a simpler interface that doesn’t require a download, with the fancier interface as an option for those with higher-end cell phones. I like the idea very much though, including that the money moves directly between people’s bank accounts or credit cards.
Joy-Mari
Nov 4th, 2008
I love such new services and signed up last week already.
Nic
Nov 4th, 2008
WIZZIT, a diviosn of The SA Bank fo Athens – has been doing this for years now. Best is that there’s no applications to download – it will literally work on ANY cellphone…
Nic
Nov 4th, 2008
WIZZIT has been doing this for years now. Best is that there’s no applications to download – it will literally work on ANY cellphone…
Cat
Nov 4th, 2008
Nic – true, but don’t you have to have a Wizzit bank account? What I mean is can you pay anybody with Wizzit even if they’re banking with another bank?
Nic
Nov 4th, 2008
You’re 1/2 right. To make and receive payments using WIZZIT you obviously need a WIZZIT account. But when you do, you can pay money into any South African bank account from your WIZZIT account. I regulalry make payments to my wife’s Nedbank account using WIZZIT (heh). All you need is a bank account number and branch code. If you pay WIZZIT-to-WIZZIT, you just make a payment to a cellphone number.
Dinesh
Feb 2nd, 2009
That is a very cool system. DO they have an api or means for handling online payments?
Steve
Feb 2nd, 2009
Hi Martin, when you receive money on Pocit, you can choose if you want to get it into Pocit Money, or straight into a bank account (set in your profile). If you have Pocit Money, you can also transfer it out to your bank account.
Steve
Feb 2nd, 2009
Hi Dinesh, Pocit has an api which enables e-commerce sites to request money and get paid, but the api hasn’t been published on the web yet. Contact us at info@pocit.co.za if you want more info.
Dinesh
Feb 2nd, 2009
Excellent, thanks for the quick response.
Banking
Jun 2nd, 2009
FNB Cellphone banking doesn’t require downloading of an application, or a separate account etc. its free of bank charges and subscription fees. it also works an ANY cellphone and has a variety of products; u can even pay traffic fines. there is also commercial cellphone banking offering for businesses which caters for dual and single authorization requirements
Thandeka
Sep 22nd, 2009
Please send me my verifying code of 1094140813
xixihaha567
Sep 10th, 2011
Im exactly the same way, I do my very best to remain neutral. Its hard, in the event you communicate using the person the other individual dislikes, then you fall out of favor with them! I simple cant dislike an individual, just simply because someone else does, I just cant.