POS go live in rural areas for MasterCard

Ann Cairns and April Nkosi - Soweto site visit

Blue Label will roll out over 15,000 new EMV-certified, contactless-ready terminals, allowing traders to accept Chip and PIN and contactless payment cards and upgrade some 7000 of its existing terminals used in smaller spazas with MasterCard Mobile software.

The company currently provides thousands of POS terminals in South Africa, which are used predominantly to sell prepaid vouchers such as airtime and electricity and are identified by the BLU Approved branding. Servicing millions of customers in rural areas and under-served settlements, these BLU Approved traders have historically operated on a cash-only basis.

"Over and above the estimated 100,000 spaza shops spread across South Africa, there are tens of thousands of small- and medium-sized retailers and service providers," says Mark Levy, joint CEO, Blue Label.

"While the number of South Africans with access to formal banking products has increased significantly in the last year, the number of card acceptance locations - especially in rural and peri-urban areas - has not grown in tandem," says Philip Panaino, division president, MasterCard, South Africa.

The MasterCard Mobile payment platform will enable MasterCard cardholders to use their PIN-based debit, cheque or credit card issued by Standard Bank, Absa, Nedbank and the South African Social Security Agency (SASSA) and their mobile phone to pay for their purchases in-store at select BLU Approved merchants.

"This is the first time MasterCard Mobile is made available to consumers in the physical retail environment. This innovation is a cost-effective payment mechanism that doesn't require customers to open another bank account," explains Panaino.

Improving cash flow

Both of these payment solutions will assist merchants to reduce the amount of cash they currently handle, which can be unsafe and costly to process, increase sales and improve cash flow. Merchants will also be able to offer cash-back and cash withdrawals to their customers and provide them with the flexibility to pay the way they want to.

Cashless shopping provides many benefits to consumers, who will no longer have their shopping habits determined by whether or not they have cash in their wallets. They will also not be burdened by concerns related to safely carrying cash.

"These new solutions will enable our merchants to respond directly to their customers' increasing and frequent requests to use payment cards at POS terminals to pay for their goods," says Levy.

"Our collaboration is another step towards realising our vision of a world beyond cash, by bringing new and innovative electronic payment solutions to a generation of customers who are mostly banked, but are currently underserved. Through the introduction of these solutions that respond directly to the needs of merchants, both partners aim to increase the level of penetration of electronic payments in South Africa, and help stimulate economic growth," concludes Panaino.

Between March 2012 and July 2012, the SASSA debit MasterCard card was cited as the main contributing factor to the 4% growth in the country's banked population from 63% in 2011, to 67% in 2012 according to the FinScope South Africa 2012 survey. As at July 2012, 2.5 million SASSA MasterCard cards had been issued to grant recipients. Since then an additional 7.5 million cards have been issued to grant recipients, which should further increase financial inclusion in South Africa.