Continues Smithers, "Eliminating physical cards means retailers don't carry stock - which means more floor space, no ordering, no stocktaking, no shrinkage and, most importantly, no security problems. We know of at least one case where someone has been killed for the value of their physical phone cards."
"The whole system relies on fast, reliable communication," says Smithers. "The transactions have to be completed in a few seconds, and because the margins on prepaid sales are low, retailers have to be very careful to use the most cost-effective communications."
Wayne Berkinshaw of Datalinx, which is a major supplier of such GPRS devices to Kwikpay, confirms the advantages of GPRS: "In a traditional fixed-line environment people are paying for the time they spend online. That can very quickly add up to a lot of money.
"With GPRS you're only paying for the data you send, and a typical debit or credit card transaction involves very tiny amounts of data. Retailers doing up to 3000 transactions a month will pay less than R150.00, or about 5c per transaction, and the cost per transaction decreases from there."
According to Smithers, retail customers love stand-alone devices or kiosks and outlets with an integrated system, where prepaid products are available at every till point because they can do all their transactions at a single till.
Smithers adds that prepaid sales can be a significant revenue source for retailers. "A small convenience store can very quickly average R15 000 a month and we have some large stores turning over R250 000 a month on prepaid airtime alone. A moderate store can easily pay its rent with the revenue."
Because prepaid voucher sales don't need any additional infrastructure or stock, Smithers says they are not limited to traditional retailers but include pharmacies, video shops, coffee shops and restaurants - "anywhere where there is a point of sale".
Kwikpay currently serves around 5500 retail outlets across South Africa, from mom and pop convenience stores to the largest branches of national chains like Clicks and Spar. As well as prepaid airtime and electricity, Kwikpay also enables retailers to offer services like online payments of utility bills, traffic fines and TV licence fees.
