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South African Square rival puts mobile payments in your pocket

Strike another blow for smartphones in the relentless war against cold, hard cash. A Durban firm is about to launch a device that plugs into an iPhone or Android device and allows South African sellers to take card payments on the go.

Emerge Mobile has spent two years developing a payment card reader called The Edge. It works along similar lines to Square, the dongle that’s been used widely in the US since 2010. Square, which is part owned by Twitter founder Jack Dorsey, expects to process $30bn (R329bn) worth of transactions this year, mostly for small traders who don’t want to pay a fortune in bank charges for a normal card reader or those who need to take card payments on the go.

While Square has been a resounding success in the US, however, it’s not caught on internationally for the simple reason that it doesn’t support Chip&PIN cards – which are almost universal outside the US. The US is one of the very few countries where credit and debits cards don’t come with an embedded smartchip to authenticate transactions. While there have been systems similar to Square in the past that can read Chip&PIN cards, they’re few and far between.

“The accreditation process for Chip&PIN takes over 18 months,” explains Emerge boss Matt Putman, “So it’s a considerable investment… but the technology has to be approved at an international level so that any Chip&PIN card issued anywhere can use it.”

There is one South African rival already in the market, Nedbank’s PocketPOS, which is a separate reader that connects to a phone using Bluetooth. The Edge is designed to work with almost any phone running Android or iOS. On iPhones, it syncs over the data port. On Android phones it plugs into the headphone jack.

Both platforms have a similar looking app interface, which can also be used to record cash payments and generate SMS receipts. The firm will also be releasing an SDK so that the payment system can be integrated into fully fledged accounting apps too.

Putman says that through its backers at Capital Eye, Emerge working with another South African that specialises in mobile wallets – wiGroup – to accept payments using mobile vouchers and the like too.

Right now, Putman says the focus is on the first wide ranging trial of The Edge which will start in KZN and the Western Cape in the next couple of weeks. Merchants from a range of backgrounds have been invited to test the system. Ultimately, though, it’s aimed at people who need to accept payments while on the go – pizza delivery drivers, couriers and the like – and those who don’t currently accept electronic payments at all because the current cost of equipment and transacting is so high.

“It’s for entry level merchants who don’t have access to traditional banking,” he says, “And you can add in lots of other services too. So airtime sales can be completed entirely from within the app, for example.”

The Edge dongle accepts older magstripe cards for those who still have them (ie. visiting Americans) and is designed to withstand being bunged in a pocket and left in a change bag all day. It’s a “by Africa, for Africa” design, says Putman, who intends to take it up continent soon.

The only drawback is that there’s no offline mode – if you’re out of range of a network tower, you’re out of luck. Perhaps cash isn’t quite dead yet.

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