Online shopping to rise with prepaid cards
Fin24 - Feb 29th 2012, 07:40
Johannesburg - South Africans who don't have access to a credit card can now shop online by using a single-use virtual prepaid card system called 1-2-Pay-Online.
Developed by Triloq Payment Services, a World of Avatar company, the system was created to remove barriers for would-be online shoppers and to increase online sales across the board.
The 1-2-Pay-Online system was created in collaboration with MasterCard and Standard Bank.
While only 7.8 million South Africans own credit cards, the online shopping market increased by over 30% in 2011.
According to MasterCard's Online Shopping Behaviour study, 58% of South Africans who have access to the internet are shopping online, an increase from two years ago when it was at 44%, and last year when it was at 53%.
In 2009, 5.3 million South Africans were online and in 2011, the number increased to 6.8 million, a growth of 28% over two years.
Veeren Naidoo, CEO of Triloq Payment Services, said the imminent introduction of additional broadband spectrum, wider access to mobile and PC-based internet would increase the potential of online shopping tremendously. This would in turn increase the value and potential of virtual prepaid card payments.
"Our prepaid cards allow customers to create a virtual prepaid card, which has the same functionality as a normal bank-issued card, so that they are able to buy goods on websites that accept credit and/or debit cards," he said.
According to Anna Jones, general manager MasterCard Worldwide, online shopping has come a long way in southern Africa.
"With access to the internet becoming easier and more cost effective, the overall online shopping experience is viewed positively and people are gaining trust in online security," she said.
In order to eliminate online fraud, the virtual prepaid card produced by the system can only be used for one transaction. Funds left over from the online purchase are transferred back to the customer, who is able to create a new virtual prepaid card for additional purchases.
The 1-2-Pay-Online system provides a safer environment for customers to shop online as each time a customer makes a purchase, a new 1-2-Pay-Online card number is used, limiting the possibility of fraud.
Jones said payment solutions such as the virtual prepaid online shopping card from 1-2-Pay-Online would give more people access to the convenience of online shopping.
The next logical step according to Naidoo is allowing users to create virtual prepaid cards from their cellphones, "which we will launch shortly".
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