BankservAfrica to launch regional payments between mobile and traditional bank accounts
The platform, to start operating in July, will enable the largest automated payments clearing house in Africa to facilitate real-time transactions in the region
BankservAfrica, the largest automated payments clearing house in Africa, says it will launch a new platform that will enable payment from mobile bank accounts to traditional accounts.
BankservAfrica chief payments & innovation officer Jan Pilbauer said in an interview the platform will launch in July with two banks and two mobile operators. He said the technology could allow for an Ecocash mobile wallet in Zimbabwe to send money to an FNB bank account in SA, for example.
In SA, the banking sector is mature and many people have bank accounts while in the rest of Africa, where many are still unbanked, mobile wallet platforms have come in to fill the gap, said Crossfin Technology COO Anton Gaylard.
Mobile wallet is a virtual bank account that stores payment card information on a mobile device, allowing users to make payments.
The ability to seamlessly transact across platforms is an attractive proposition, Pilbauer said.
However, Gaylard said SA’s advanced formal banking sector has not always been good for fintech players, particularly those using mobile wallets.
For example, Safaricom’s Mpesa is popular in East Africa but failed to take off locally. It was launched by Vodacom, which has a stake in Safaricom. MTN’s Mobile Money and Tencent’s WeChat Wallet also failed to take off in SA.
“What really matters is where people keep money,” said Pilbauer.
WeChat, in which Naspers has a stake through its Tencent holding, has become a popular form of payment in China.
Pilbauer said WeChat is now regulated like a bank in that country because it holds people’s money. In SA, fintech players do not tend to hold money or deposits on behalf of their users. Those institutions that do hold deposits like banks are heavily regulated, another barrier to success, said Pilbauer.
“I don’t think fintechs in SA are failing as such. The banks here are more open to partnerships,” he said.
The biggest trend driving fintech around the world is reducing friction in the payments process and enhancing the customer or user experience, said Pilbauer. “As a bank, you may need some help from the fintechs to deliver the user experience consumers are now asking for,” Pilbauer said.
Hannalie Marsh, GM of Wirecard — a technology company helping companies to set up their digital payment gateways — said “frictionless payments” were a big drawcard as consumers look for better alternatives to the poor service experienced by many using formal banking.
Globally, Apple and Samsung are examples of technology companies using their consumer product experience to enhance payments services for users with their respective Apple Pay and Samsung Pay products.
Locally, Pilbauer said Zapper and Snapscan were fulfilling the same role.
Gaylard said another problem facing fintech is inter-operability, which has to do with how easy it is for people to use a certain system to make payments in different places. If one merchant accepts Wirecard, for example, but another does not, it becomes a problem for the Wirecard user. This has a big impact on adoption of new payment platforms.
In the same vein, Marsh said Wirecard has been working to tackle cross-border transactions for a number of years but different regulations in different jurisdictions had proved to be a major stumbling block.
Pilbauer echoed the sentiment and said cross-border transactions in the Southern Africa region, for example, have become much easier to tackle as regulations in member countries tend to be similar.