AfricaCom speaker, Dave Paratt, is CCO of Oltio, South Africa. The AfricaCom team caught up with Dave ahead of the AfricaCom Conference and Exhibition, taking place at the CTICC in Cape Town, South Africa – 12-14 November to find out a bit more about his experiences and focus at the event.
Com World Series: What does the future of payments look like in Africa?
Dave: The most important trend will be the move towards interoperability. Today we see payments being very disparate and fragmented. The lack of interoperability has the impact of entrenching cash as the prime means of exchange. However, as we see a movement towards the use of standards such as those provided by the card schemes the critical issues of authentication, authorisation and settlement will be made more available.
Com World Series: What are the key components in promoting financial inclusion for banks and telcos in Africa?
Dave: The rise of mobile money systems was not brought about by the promotion of financial inclusion per se. This isn’t technically correct and rather it was driven by the desire of telcos to sell airtime directly to their customers and reduce the costs. The second desire was to reduce churn as it was understood that financial services created stickiness that telcos could not achieve especially in highly competitive and rapidly maturing markets. Banks on the other hand embraced mobile as a critical channel and have moved strongly into the lower income segments. The point is as each moves towards the other the critical driver will be standards and how they are driven to encourage interoperability. Ironically it won’t be lower income segment products that will drive financial inclusion but that the adoption and usage by the higher income and more profitable segments that will drive strong cost coverage and therefore the ability to deploy further down the income chain. Interoperability driven by efficient standards are an absolute prerequisite.
Com World Series: What is the next big trend for card payments?
Dave: Actually the big new trend is something that has been around for some time. Card-not-present. As the card moves into the phone and plastic quietly disappears the principles of CNP that we know today have to adapt to allow the positive authentication of the cardholder by the phone securely. 3D secure on the face of it provides this in the PC and tablet centric e-commerce but falls down in mobile and face-to-face channels. Use of a known second factor such as PIN or biometrics are really the only way forward. Obviously we at Oltio believe that the PIN will be key. CNP plus PIN will see the PIN entered into the customers own phone and not the merchants POS or phone based device. The customer will in essence carry their own PIN pad.
Com World Series: Which 3 countries hold the most potential in terms of innovative payment technologies and why do you say so?
Dave: I have to say SA as its been the hotbed of innovation in payments for year. Strangely enough the real innovation will come from countries where the card bases today are heavily biased towards PIN. So watch out for European countries ironically! PIN based cards currently cannot be used in CNP limiting e-commerce, m-commerce, in-App, vPOS and other channels.
Com World Series: What is your strategic technology vision for your bank/telco?
Dave: Oltio is a JV between a bank and a telco. Our vision is that the customer will take control of their payment using their phone primarily as their security device – their PIN pad. Get that right and all the other technologies such as NFC, Bluetooth etc can be enabled. Interoperability of MNO wallets needs this too.
Com World Series: What are your top 3 solutions that you are looking to source?
Dave: We are looking to license our unique CNP plus PIN technology. Branded as both payD and MasterCard Mobile in South Africa we also call it ORAGS or Oltio Remote Authentication Gateway Services. The service includes a USSD/WIG security overlay that uses the SIM to encrypt the PIN on the customers phone as well as a proprietary App based security offering. ORAGS can be deployed as a hosted services model or licensed outright. A unique vPOS allows a customer to buy from a merchant without the need to either swipe a card or enter a PIN on a merchant device.