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Paying with your cell can be secure, check how

Cape Town - South Africans can rest assured that companies that follow industry standard protocols for mobile payments will secure personal financial data, says a corporate insider.

"The technology is built on a system that allows for (1) remote identification (2) remote verification and (3) the issuing of a value carrying enabling code before a transaction is completed", Roan Murray, CEO of payment solutions company Switching House, told Fin24.

It's not simply a matter of swiping your card and completing the payment. Murray said that the mobile payment system was designed with checks and balances to ensure security.

"No transaction can take place if the primary token and the PIN number is not received by the system from the holder of the account.

"The primary token to identify a virtual account holder is the mobile phone that can communicate directly without the need of a separate infrastructure," he said.

Mobile appetite

Vodacom and MTN are the latest players to launch mobile payment systems, but while the moves may help unlock value in the informal sector, the systems largely operate in silos.

Switching House actively works to bridge the divide between different payment systems in order to generate more economic activity through an interoperable network.

"The technology owned by Switching House is currently in use by all the major mobile networks and we have started talking to some of the role players to facilitate interoperability through our e-CoSwitch platform specifically to be able to provide access to a broader existing wallet base into the enterprise payment solutions we are rolling out in the FMCG manufacturing and distribution space," said Murray.

Watch this video on how the Google Wallet application works:


In SA, the growth of online payments of virtual products has demonstrated that there is an appetite for online payments that is simple, yet secure to use.

But many people are still wary about security and have yet to trust the platform. However, the lack of credit cards and the limitations of the formal banking sector makes mobile payments an ideal method to move people from traditional cash-based payments.

"Many studies show that people are migrating toward online transactions, the distrust in these systems in the developing world and the low penetration of credit cards have been the main factors for it not growing faster. We are involved in many projects where corporates choose to transact with their customers via electronic means and it is gathering momentum at this moment in time", Murray said.

Internationally, Juniper Research reports that mobile e-commerce sales amounted to $1.5 trillion in 2013, and is projected to hit over $3.2 trillion by 2017.


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