South Africa: More workers now paid by mobile transfers

Mergers, Acquisitions and Financial Results

Since its launch in July 2010, First National Bank's corporate clients have used Pay Wallet to send over R42-million directly to the mobile phones of more than 19000 South Africans, with the service now growing at an average monthly rate of 35%.

Pay Wallet is an extension of FNB's eWallet, which allows FNB customers to send money in real time to anyone with a cellphone. It enables FNB Corporate, Commercial and Public Sector clients to electronically pay their employees directly to their mobiles or into a debit card.

The recipients are then able to access their money immediately at any full-service FNB ATM, with or without a bank card.

Research done by Finscope in 2010 states that 12.4-million adults in South Africa still remain unbanked, and that of these, 11.1-million adults have never been exposed to any type of formalised banking practices.

"Products such as FNB Pay Wallet are allowing us to bridge the gap between the banked and the unbanked and address the real need for access to financial services," FNB eWallet Solutions CEO Yolande van Wyk said in a statement last week. "This also allows for the transfer of cash to be done safely and easily."

FNB has also recently enabled companies to integrate their line-of-business systems with Pay Wallet, to pay employees via cards. This allows any company, regardless of who they bank with, to use Pay Wallet.

"Mobile money transfer is currently the flavour of the moment and mobile wallets meet a desperate need to keep one's money safe," says Arthur Goldstuck, MD of internet research firm World Wide Worx. "It is likely that mobile wallet-type applications will serve as a way of ensuring your cash is secure as it is a natural partner service to cellphone banking."

Pay Wallet reduces the time and costs associated with handling cash, or issuing cheques to pay employee wages. It can also be used as a replacement for petty cash, by simply paying funds into a card linked to the company, instead of an individual.

Payments can be done on FNB Online Banking, individually or via an easy-to-use file upload system.

The objective was to make it easier for employers from all industries to make payments to their staff, said Van Wyk. "This solution is ideal for seasonal or contract employees, once-off employees, temporary labour to small businesses and other informal establishments such as spaza shops," she said.

"Pay Wallet has simplified the way payments are made to those without access to financial services and has been critical in introducing the unbanked to formalised ways of handling their funds."

In its research, Finscope shows that of South African adults that have never been formally banked, 89% are black, 7% coloured, 3% white, and 1% Indian.

Twenty-two percent of adults in KwaZulu-Natal have never been banked, giving the province the highest number of unbanked adults in the country. Gauteng and Eastern Cape both sit at 15%, followed by Limpopo at 14%, Mpumalanga with 11%, the Free State, Northwest and Western Cape with 7%, and the Northern Cape with 3%.

"FNB will continue to work towards developing and introducing further access to banking which are both innovative and simple," said Van Wyk. "We hope that this will see the needs of the unbanked being met together with a heightened awareness of what is available to them."