At the height of the global Covid-19 pandemic, Nedbank became the first bank to offer small, medium and micro enterprises (SMMEs) the ability to turn their cellphones into a payment acceptance device with the launch of its Tap-on-phone functionality in October 2020.
Following a successful closed pilot in June, the easily downloadable app has empowered a number of merchants and business owners with the ability to accept card payments on their cellphones without having to purchase point-of-sale (POS) devices. Merchants include beauty parlours, hairdressers and car washes, proving the importance of such a solution for small to medium sized enterprises in South Africa.
“This has really transformed my business because it was fast and efficient in getting set up,” says Lorina Gerber, owner of Pamper & Hair Hub, and one of the first users. “It is also very hygienic, as my clients don’t have to touch my cellphone and I don’t have to touch their cards. I adopted the system in the middle of August 2020 and my customers already really love the system.”
According to a Mastercard study, 75% of South Africans said they are now using contactless payments, citing safety and cleanliness as key drivers, and 78% indicated that they will continue to use contactless post-pandemic.
Micro entrepreneurs across South Africa consistently faced the difficult challenge of accepting digital payments, especially in a world suddenly plunged into a pandemic that necessitated contactless payments. The innovation is targeted at the vast majority of these business that are not geared for digital payments, or have the capital to quickly invest in new specialised hardware.
“Tap-on-phone makes it much easier for small- and medium-sized businesses to use their compatible smartphones to easily accept payments quickly and securely from their customers for goods or services,” says Chipo Mushwana, Executive of Emerging Payments at Nedbank. “Due to the Covid-19 pandemic facing the world, we have all been sensitised to the need for social distancing, which has impacted all areas of our lives, including how we transact on a day-to-day basis.
“Many of the businesses who leveraged the speed and flexibility of Tap-on-phone were able to generate much-needed revenue to keep their operations going, and in some cases, get new enterprises off the ground cost-effectively,” says Mushwana. “The functionality enables contactless payment acceptance, and there’s no health risk to the merchant or customer. It builds further on Nedbank’s successful PocketPOS payment solution, which was also the first mobile card reader of its kind to be launched in South Africa in 2013.”
According to Mushwana, Tap-on-phone is another example of Nedbank’s commitment to harnessing its digital strength to deliver inclusive banking services for all.
“The challenges presented by Covid-19 demand that the world of payments evolves even quicker, and banks must respond by providing innovative ways for businesses to connect with their customers through easy, inclusive and preferably contactless payments solutions,” Mushwana says. “Nedbank’s Tap-on-phone functionality enables this by harnessing the power of mobile technology.”
In addition, Tap-on-phone uses the same strong security as physical payment terminals and meets Mastercard and Visa requirements. The security is further enhanced by the fact that customers do not have to hand over their physical bank cards to a merchant when paying.
Mushwana also points out that Tap-on-phone saves businesses money and time because they can receive electronic payments without having to invest in costly hardware such as a POS device or fixed data or telephone lines before they can start trading. An Android device that is on version 7.0 or newer, and is NFC-enabled, is all they need. This makes the functionality especially valuable for SMMEs, and informal traders that could not previously accept debit and credit card payments.
Tap-on-phone is the result of a collaborative partnership between Nedbank, Mastercard, Synthesis, and iVeri.