First National Bank (FNB) has released what it claims to be the country's first location-based cashless mobile payment option.
GeoPayments is a new feature of the FNB Banking App, which allows for person-to-person payments within a range of 500 metres, without the need for the recipient's bank account details. A global comparison product would be PayPal Bump - a mobile app that requires two phones to be tapped together to complete the transaction.
The GeoPayments feature is available in the latest version of the FNB Banking App for Apple, Android and BlackBerry handsets. The innovation was due to be unveiled at a special event on Wednesday, but the updated iOS app was leaked on Monday.
FNB App users who use the GeoPayments functionality to pay other FNB App users will be identified to each other, with the payer and recipient “pairing” their devices before a payment is made.
FNB CEO Michael Jordaan says: “One of the benefits of smartphone and tablet applications is the potential for effective use of location-based technology. This latest innovation brings together location-based technology and person-to-person payments.
“We believe that it will not only offer clients additional convenience, but also unlock strategic potential for cashless payments going forward.”
Digital strategy
GeoPayments is available to FNB and non-FNB customers. While FNB customers can both make and receive payments, non-FNB customers will only be able to receive payments by downloading the FNB App and making use of an eWallet.
GeoPayments has been developed by FNB Connect, the division of FNB responsible for building the Banking App. FNB Connect head of products and markets Farren Roper says: “Location-based apps have proven to be very popular globally and are used largely for check-ins and rewards. The FNB App was initially launched with location-based services for finding branches and ATMs, but applying it to payments complements the bank's digital strategy.”
Jordaan adds: “The launch of GeoPayments is another bold move towards creating a new ecosystem for our customers to use our self-service and digital channels, while reducing the dependency on cash.”
Contactless vs NFC?
The announcement comes as other local banks have been focusing on near-field communication (NFC) technology development and deployment. For example, Absa has been in the field-testing phase of its NFC trial. The trial, which began in December, involves the use of BlackBerry devices equipped with NFC-enabled micro-SD chips.
In November last year, FNB Core Banking Solutions head of product, analytics and cards, Irlon Terblanche, said NFC on mobile phones was a definite focus, and the bank was working on linking contactless payments with its virtual channel, the FNB App.
“Some barriers to entry are the number of NFC-capable handsets and their respective market penetration. To this end, we are collaborating with the various manufacturers and network operators to ensure that we not only cater for NFC-capable handsets, but also find innovative ways to take them to market.”
According to Terblanche, for consumers and merchants, contactless payments will enable convenience where speedy purchases are required: “Whether it is at toll gates, public transport facilities, your McDonald's Drive-Thru or the express queue at Woolworths or Pick n Pay.
“The benefits for banks, retailers and the general payments industry is that this convenience will encourage more customers to pay for goods using their contactless cards or mobile phones, thereby reducing the burden of processing cash between banks, retailers and the SARB,” said Terblanche.
At the time, Terblanche said the bank was working on preparing to launch contactless and mobile NFC payments, mobile commerce and wallet capabilities, all integrated with the FNB App.
* All the details regarding the new GeoPayments service will be revealed by FNB on Wednesday, 9 May. ITWeb will also have an exclusive “Twitter-view” with Michael Jordaan, at 3:15pm, with the hashtag #AskMJ.
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