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Picture: 123RF
Picture: 123RF

Facing stiff competition for online payments, financial services group Absa has backed its new online payments platform to find favour with South Africans looking to shop online.

In the battle to reduce cash usage and encourage digital payments, the bank said its new Absa Pay was a “secure, simpler, and faster payment option” available to Absa customers in SA when purchasing through online channels, that removed the need for a customer to produce their bank card details.

“Our goal is to continue partnering with leading payment aggregators like Ozow and others, leveraging their specialised payments expertise and agility to deliver these solutions to our customers efficiently and with the best experience possible,” Subash Sharma, chief digital officer at Absa Everyday Banking, told Business Day.

Absa Pay is the latest in the bank’s digital payments solutions and is its new application programming interface (API) — a software intermediary that enables the customer’s bank and the merchant website to communicate with each other directly. The bank said its system did so more securely to prevent potential fraud.

In essence, Absa Pay removes the need for customers to capture their bank card details onto a third-party site when transacting online. Rather, customers can select “Absa Pay” on check out, which will be directed to an Absa portal. The API is integrated into various payment aggregator and merchant websites and enables consumers to pay directly from their bank account in a few steps.

Such transactions will require customer approval through Absa’s banking app for added security.

Absa conducted a pilot study with payments company Ozow and 10 merchants from October 2023 to February 2024.

“The pilot successfully demonstrated Absa’s ability to deliver the best customer and merchant solution to the market and to securely process and monitor transactions through the API and showed our API to deliver the fastest transaction processing times in the market — with a 12% higher success rate and on average 22 seconds faster processing speed than screen scraping technology,” said Sharma.

Only card payments are now available through the bank’s direct integration, Absa arguing that cards offer a greater level of security and fraud protection for customers through the relationship the bank has with payments giant Visa.

Even then, some customers preferred online electronic funds transfer (EFT) payments, said Ulrich Janse van Rensburg, chief fraud strategy and analytics officer at Absa Everyday Banking. 

He said that for those customers, the only option today was the service facilitated by payment service providers (PSPs). The service uses screen scraping technology to facilitate an EFT payment instruction between the customer and their bank.

To facilitate the payment instruction, PSPs require customers to enter their digital banking pins and passwords into third party sites who then use an automated process to log into the customer online banking on their behalf and process the payment.

“While Absa recognises this practice, we believe a safer solution is one where screen scraping is removed from the EFT payment process and our customers process their EFT payments directly with the bank,” Janse van Rensburg said. 

gavazam@businesslive.co.za

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