South African mobile operator MTN has launched a new service called payD that enables users to make secure online purchases by combining their debit card PIN and mobile phone’s SIM identity. Users submit their PIN via their phone the first time they use the service. Thereafter the user’s debit card is identified with their handset and their mobile phone number is used for identification.
MTN’s Mobile Money unit has dubbed the system “PIN and SIM” and is based on its own authenticated mobile transaction (AMT) technology. The importance of the service is that now debit card holders, as well as those with credit cards, can make online transactions, which significantly widens the proportion of the South African population who can make use of ecommerce. “On the consumer side, only three percent of our population has credit cards, and this is generally the only way to transact online,” said Dave Parratt (pictured), head of new business development at MTN Mobile Money. The ability to make purchases online with debit cards boosts this figure to 60 percent of the population, said Parratt.
Nearly 80 retailers have agreed to accept the payD service. This includes 1time Airline, a leading budget airline in the country. Even though payD has been developed by MTN, its rival Vodacom will also offer its own version of the service. In addition, there are plans for rivals Cell C, 8ta and Virgin Mobile to further widen its appeal. In terms of banking partners, holders of Standard Bank (a partner in the MTN Mobile Money joint venture) and Nedbank debit cards can access the service with plans to extend it to other banks within a year.
Separately, MTN and its partner Standard Bank are in court today (August 1) to face a lawsuit brought by 3MFuture Africa which alleges MTN Mobile Money violated a patent held by the technology vendor in the area of credit-card security. The company’s technology enables users to remotely disable their credit cards via their mobile phones if they are concerned about fraud.