*As Mastercard adopts tap on phone technology
*Targets 500,000 new merchants, SMEs across MEA
*Votes $250 million accelerate cashless payments adoption
By Prince Osuagwu, Hi-Tech Editor
In the early days of mobile payment, payment processing providers offered banks and merchants free legacy hardware like Automated Teller machines, ATMs and Point of Sale, POS terminals to make their transactions easy.
These terminals only read the magstripe details of debit or credit cards and authenticate commands which helped complete transactions. They were later upgraded to reading chips embedded on payment cards when the world moved to Chip and Pin technology due to vulnerabilities and security breaches inherent in the Magstripe technology.
Despite the upgrades, ATM machines and POS terminals are often found to fail or delay services owing to network issues.
But in an omnichannel environment where consumers increasingly want more choice to pay the way they want to, the dynamic nature of the technology world would not only keep innovation a going concern, it will also keep payment processing technology ever-evolving.
Consequently, the payment landscape has witnessed tech innovations like the Near Field Communications, NFC Technology which has also engendered innovations such as a tap on phone systems of payment. This innovation turns the mobile phone into a payment device, just by mere tapping of a payment card on it. It simplifies the payment process by removing steps, like swiping or inserting a credit card, which could create barriers to commerce or produce disjointed customer experiences.
Although these methods have long been in use in advanced countries, it is scarcely used or entirely nonexistent in most African countries.
However, a global payment and technology company, Mastercard, has just stepped in to bridge the gap. The payment giant says it is partnering with another leading enabler of digital commerce, Network International to introduce the Tap on Phone technology to payment transactions made on the Mastercard platforms across the Middle East and Africa.
The partnership targets 500,000 new merchants and SMEs who would accept payments through mobile phone, via Tap on Phone technology and thereby help in driving acceptance and innovation of digital payments across the region.
This will incidentally see to the end of POS terminals in Africa and considering the speedy penetration of mobile phones and the close attachment users have with their phones, it may not be surprising to see the terminals gradually vanishing from payment service points in the region.
The launch of Tap on Phone is part of Mastercard’s strategy to connect 50 million micro, small and medium-sized businesses, and 25 million women entrepreneurs globally to the digital economy by 2025 using its technology, network, expertise, and resources.
In support of the goal of building a more sustainable and inclusive digital economy, the company has pledged a whopping $250 million to the cause.
Senior Vice President, Head of Products, EEMEA, Mastercard, Gaurang Shah, said: “Small and medium-sized businesses are recognizing the potential of digitalization, and have identified digital payment acceptance among the top drivers for growth.
“They are crucial for systemic economic recovery, and by connecting more SMEs to digital commerce tools and affordable payment acceptance solutions, we are putting in place a strong foundation that can facilitate sustainable growth”
Also, Group Managing Director – Acquiring, Network International, Andrew Key, said: “Making sure that SMEs have all the support they need to go digital and grow digital is a key focus for Network International. As a leading enabler of commerce, we remain committed to connecting SMEs, the backbone of any economy, with innovative solutions that will drive wider acceptance across the region.
Tap on Phone powered by Mastercard Payment Gateway Services (MPGS), gives small and medium-sized businesses (SMEs) the ability to accept payments through a smartphone. Customers will simply tap their card or device to make the payment on the SME merchant’s phone, with each transaction processed through MPGS.
Vanguard News Nigeria
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