Killing the chequebook
Pocit hopes to change the way we pay
THE CHEQUEBOOK could be a thing of the past if Pocit, a new mobile start-up, can get the public to buy into its vision of using their cellphones as a means of sending and receiving money. Mobile payment and banking systems are notoriously difficult to handle. Just building a system that can operate on the majority of handsets and which doesn’t put unnecessary burdens on users is a task many companies have failed to achieve.
The underwhelming performance of MTN banking is just the most recent example of how that is by no means guaranteed – even with hundreds of millions of rand to spend on developing and marketing a product’s success.
So what’s different about Pocit? For starters, Pocit uses your cellphone as a base from which to send and receive money. What sets it apart from other services is that it’s merely acting as an interface between existing bank accounts and credit cards rather than looking for clients to open new accounts with them.
Pocit MD David Reynders says what it’s trying to do is remove the barriers that make sending and receiving money electronically difficult. “How Pocit works is that the users install a small program on their cellphones. They link that program to their credit cards and bank accounts and then, when they want to send money to another user, simply send it to them using their cell numbers as the unique identifier. Users can also request payment from other users.”
Reynders says no financial information is stored on the cellphone. Instead, it’s stored securely inside the Pocit system. “When you want to send money to someone else you simply log on to the system and enter the relevant phone number and amount. If that person is using Pocit then the money will be deposited into his bank account. But if such person isn’t registered, then he’ll be sent an SMS requesting him to register.” Once registered the money is paid into his account.
He says apart from interpersonal transactions, the service’s real potential is in paying retailers. It’s in that sector Pocit is looking to make its money. For service providers that have traditionally relied on payment by cheque (or hoping the client will transfer the money via Internet banking) this may provide an easy way to receive payment for services rendered. It would effectively replace the need for a credit card machine in many mobile business situations.
Reynders says the rates Pocit will charge service providers for even small volumes of transactions will make it cheaper to use than conventional credit card processing systems.
Its biggest challenge is going to be convincing potential customers that storing their credit card and bank account details on the service is safe. He says even though Pocit is a registered payment services provider, it doesn’t take any money directly from bank accounts. That’s because it can’t be done fast enough to make the system work. Customers need either a credit card or cheque card to make payments on the system. In addition, each card is tied to the phone number of the handset it’s registered on.
To transact, a customer would have to be in possession of the handset that they registered for the service on, know the secret pin number that unlocks the account (which can be between five and 24 digits) and have the three digit CVC number from the card being used for the transaction.
Pocit is a division of Tradebridge. Reynders says capital for the venture is coming from its parent company for the time being. “At the moment we’re testing the waters and trying to ascertain what the capital requirements will be to take the service from the stage where we’re relying on the viral nature of mobile services and some low level marketing to a mass market product,” Reynders says. “That may require more money than the company can fund internally. Right now that’s unclear.”
Tradebridge also operates Healthbridge, one of the companies responsible for linking doctors, hospitals, pharmacies and medical aids and ensuring that the right information gets to the right organisations as quickly as possible.
Initially, Pocit is targeting the higher end of the consumer market, as those are the people who have both credit cards and bank accounts. But Reynders says it’s exploring ways in the future to push into the lower ends of the market.
Its biggest challenge is going to be convincing potential customers that storing their credit card and bank account details on the
service is safe.
Charting the future. David Reynders