If you have ever travelled on the London Underground you will notice many commuters simply tapping their bank cards against a reader as they walk through the turnstiles.
This is thanks to “tap and go” technology that does not require you to swipe your card, but to simply tap it against a card reader.
Absa is the first bank to introduce this technology to South Africa, and customers will be issued with a Payless “contactless” bank card, which comes with antenna technology that allows you to simply “tap” your card at a point of sale to make a purchase.
The idea behind “tap and go” is that is makes it easier to pay for low-cost items such as a cup of coffee, a takeaway or for taxi fare.
As in the UK, where bank cards are issued with antenna-enabled chips that allows commuters to tap and go when paying for their train fare, this technology would mean taxi commuters would not need to carry cash and taxi drivers would not have the danger of driving with a lot of cash on hand.
In fact, the technology is already used with the Gautrain ticketing system, except that now you could use a bank card and would not have to top up the card at the paypoints.
According to Simon Just, director of consumer issuing at Absa Card, the card can be used for transactions of R200 or less and would carry a maximum load of R1Â 500 and a total monthly transaction limit of R3Â 000. These cards will function pretty much like prepaid wallets.
“We have about 15-million taxi commuters in South Africa,” says Just, “and 85% of consumer transaction values are in notes,” says Just.
“We also have 31% unbanked consumers in South Africa. This PayPass solution means that the unbanked will have access to a card without having to undergo the Financial Intelligence Centre Act [Fica] process, so we will bypass cash transactions simply and safely.”
No recourse
One does have to understand, however, that because no PIN is required, it is the same as carrying cash, expect that one could cancel the card. If your card was used by someone else you would have no recourse through the bank.
The national Department of Transport has agreed to legislate this to make life easier for the unbanked. But at this stage, existing Absa MasterCard and credit card customers will be the first consumers to test-drive the chip card.
The phased roll-out will test a number of convenience retailers and merchants, with more coming on stream in the future. The test phase will include certain Chicken Licken outlets and Wiesenhof coffee shops.
The type of merchants where one could use the card in the future include MacDonalds, Wimpy, Mugg and Bean and Ninos. It could also be used for parking at shopping malls, which would remove the massive frustration factor of trying to find change to pay for parking. Convenience outlets at fuel forecourts such as BP and Caltex would also be included, as well as all transport modes like taxis, buses and rail, and stadiums.
Absa has been able to implement this banking revolution thanks to its relationship with Barclays. “The solution works for 70-million cardholders around the world, so we are proud to bring it to South Africa,” says Just. “Importantly, we are adapting it for our own particular needs, with government’s cooperation.”
What will this cost you?
According to Just, Absa has not yet finalised pricing on its own or its transferred Partner Cards, but the cards are likely to work on the basis of a once-off load fee, with no charges for transactions thereafter. It would appear that this will be competitive when compared to a full banking product, but watch this space for more information.
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