Keeping with tradition
While a lack of access to the Internet has restricted the take-up of online banking, approximately 95% of South Africans own a cellphone and trust in cellular communications providers is being leveraged to build relationships.
But some local banks are preparing for the future of high-tech mobile commerce in a very traditional way.
Deon van Heerden, South Africa country manager for Clickatell, said infrastructure shortages, the cost of setting up new branches, consumer behaviour and perceptions about security meant that the local banking industry was poised for forward-thinking innovations in mobile banking.
“Local banks are very advanced in SMS technology and have pushed the limits of USSD [unstructured supplementary service data], which enables cellphones to set up a secure communications channel with bank services. There are also moves to combine voice and SMS sessions, where voice prompts and DTMF [dual-tone multi- frequency] tones will be used for authentication.”
Van Heerden said local banks had been proactive in rooting out pitfalls and security issues in cellphone banking. “Most transaction types at this stage are at the entry level and are therefore low risk, so there have been no major upsets. In addition, many transactions in Africa currently involve airtime instead of money.
“Airtime can be stored and transferred as a currency, which is proving very popular in the booming market for money transfers. As applications converge on cellphones, handset manufacturers will also play an increasingly important role.”
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