This service addresses the risk of foreign visitors not knowing how much they're spending in Euros, pounds or dollars, until they get their card statements back, often a month after they have made their purchases. The service will also help Absa merchants improve their client service, thereby aiding volume growth whilst at the same time increasing operating margins.
Banking analysts say the volume and value of card transactions will sharply increase as almost half a million tourists swipe their cards for purchases at hotels, restaurants and general retailers during June and July of 2010.
The bank decided to introduce the technology after extensive consultation with Barclays, its majority owner. Barclaycard has been offering a DCC solution in European countries for a number of years.
“Based on merchants and cardholders readily adopting the service in Europe, it is reasonable to assume that cardholders would enjoy similar benefits in South Africa,” says Donn Engelbrecht, director, acquiring and commercial cards at Absa Card.
“At the highest level, the value proposition and benefit is simple, cardholders intuitively prefer to make buying decisions in their home currency.”
The bank is reportedly the first to offer the DCC solution in South Africa. Its vision is to own the world of simple payment by providing a differentiated point of sale offering to merchants, ensuring ‘feet in store' and improving cardholders' experiences.
The process ensures foreign exchange transaction transparency by converting Rand amounts into the cardholder's home currency at point of sale. The sale amount is agreed and verified by the cardholder using either a PIN or signature. Further, merchants gain access to Planet Payment's best-in-class analytics and reporting package, which allows for the complete reporting and reconciliation of all transactions through a single, easy-to-use, web-based interface.
“We are excited to enter the South African market with such a strong partner as Absa, especially in advance of a significant global event,” adds Philip Beck, chair and CEO of Planet Payment. “The adoption of the system continues its steady climb as more merchants around the world have enjoyed increased sales and higher levels of customer satisfaction, while realising higher profitability.”
A trial of the simple payment solution at selected merchants began in April 2010 and the bank anticipates rolling out the solution to its merchants nationally starting the second half of April.
