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MTN Mobile Money: Debit comes to the party

Posted by: Mobile Kugel

Mobile Kugel

The online shopping industry in South Africa is pathetic. There are a number of reasons people do not shop online; security, stupidity and general lack of trust in the general process.

I know many people who buy their groceries online from Pick n Pay Online Shopping but I for one wouldn’t even bother buying a carton of milk because I have no faith in the service industry in general.

Another major obstacle is the credit card. According to the World Wide Worx’s Online Retail in SA 2011 report, only 3% of South African’s have credit cards that can effectively be used to make payments online.

It seems MTN Mobile Money has invited the other 60% of debit card users to the party and this service is sure to radically change the way South African’s interact with the online shopping experience.


About MTN Mobile Money

MTN Mobile Money is, in a nutshell an opportunity for those with debit cards to pay for things online.

As a student, I have never tempted myself with browsing, Zara and Topshop (sigh) because I would never be able to buy anything without asking my parents for their credit card.

On a less superficial level, the practicality of MTN’s Mobile Money means that I can book my own flights home.

1time Airline, one of South Africa’s most dynamic low-cost airline companies is one of the earliest adopters of the MTN Mobile Money e-commerce payment system.

This mobile payment gateway as far as I am concerned is a gateway to student freedom; it means that we are no longer tied to the shackles of mom and dad’s ‘plastic’.

This service has also been launched in Ghana and Uganda, and with options of buying everything from airtime to airplane tickets; the potential to take over Africa’s purchasing habits is huge.


How it works

MTN Mobile Money has adopted a patented technology named payD which is a PIN-based debit, cheque or credit card. Any cell phone with a MTN or Vodacom sim card is able to use this service (Cell C, 8ta and Virgin Mobile are coming).

 This e-commerce payment mechanism which has been under development by MTN Mobile Money for some time now is based on an encrypted channel which operates through the MTN Wireless Internet Gateway (WIG).

 This will allow debit card holders to make secure online transactions. Furthermore the system complies with Visa and Mastercard security protocols. 

 Obviously I am blinded by the prospects of the student benefits, but the student market is only a small slice of the pie. According to the World Wide Worx, the 3% of South African credit card users that can effectively make online payments spent R2 billion on goods and services last year (2010).

 For the 60% of South Africans debit card owners, these numbers are sure to increase.



I bet you were thinking oy veysmeer (!), what about security? If I am sceptical about buying milk online, why would I pay for an air ticket with my debit card?

A major concern for South African’s is the security of these online payment services. Phishing is one thing that concerns me, but it seems like the MTN Mobile Money service is safer than actually drawing money at an ATM.

Two vital elements to payD’s security are the hardware-based encryption as well as the fact that the service will only work for the registered user via their cell phone.

It therefore requires the user to use three elements simultaneously for the payment to be successful; the debit card, the RICA’d phone and the ATM PIN,”


Final thought

 Topshop BABY, mommy’s coming!


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