South Africa: Banks test ‘tap and go’ on public transport

28 March 2012

Business Day - March 27, 2012


In South Africa, Absa and Standard Bank are involved in pilot payment technology that does not involve using cash and which they hope will revolutionise the way commuters pay for bus or taxi fares and which they eventually hope to extend to other small-value purchases.

They are piloting the use of "tap and go", where a commuter does not use cash but uses a card with a wireless computer chip which transmits payment to a dedicated terminal when it is waved or tapped on a special reader.

Absa and Standard have partnered with MasterCard to roll out the payment method for commuters in the Western Cape and in Durban, and see the potential of extending this to other forms of payment of low-value purchases via retailers and merchants across South Africa. The banks are using MasterCard PayPass, which provides an integrated fare-payment system where a commuter does not need cash to pay for their trip.

"Consumers simply tap their MasterCard PayPass-enabled card or device on a specially equipped terminal and the transaction is completed," she says.

According to MasterCard, recent research by an independent consultant and transit industry expert reveals that up to 15-million South Africans use public transport at least once a day. With an average fare of R8 a journey, this comes to more than R50bn in cash that is circulating annually.

"This exposes passengers and transport operators to the risks of carrying and handling cash," Ms Jones says. "The MasterCard PayPass technology gives South Africans the chance to be liberated from the security risks and inconvenience associated with cash payments for transport," she says.

Standard says it is working with the eThekwini municipality to roll out a contactless transport system in Durban, initially for buses, but with a plan to extend it to trains and taxis. The first demonstration bus trip is planned for April 2.

"This is the first time in the world that a transit token (a bus ticket) resides completely within a banking app (application) and therefore enjoys bank-strength security, which has been the bane of transit operators worldwide," says Hemmanth Singh, CEO of Standard’s mobile payment unit, Beyond Payments.

Absa has already launched the Myconnect contactless payment card technology to commuters in the Western Cape’s MyCiti bus system, and another system in partnership with the Peninsula Taxi Association in the province.

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Category: Transport

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