Are retail outlets the ATMs of the future?

South Africa already has a number of great money transfer solutions. The real challenge is not getting another banking app, but rather finding locations for these applications to convert credit into cash as well as cash into credit, says Bevan Ducasse of wiGroup.

“Mobile money is growing tremendously,” says Ducasse. “Every one of the big four banks as well as Capitec has a mobile banking solution, and we have MTN and Vodacom offering money transfer services as well. The problem of how to enable people without traditional bank accounts to transfer money has been solved. If someone has a cellphone number, you can send them money.”

What does still need to be solved, says Ducasse, is the problem of how to spend money sitting in mobile accounts and wallets. “At some point you still need to be able to deposit and withdraw cash,” he says; “and everything points to the retail footprint in South Africa being the answer.”

Ducasse believes the logical next step will see retailers teaming up with mobile banking operators to provide that final link.

“Retailers already have all the infrastructure that’s needed,” he says. “They have the bricks-and-mortar presence in every small town, the communications networks, the cash, the security and the customers. Opening up retail points of sale to act as cash deposit and withdrawal points is a no-brainer.”

Retailers, banks and consumers all stand to benefit, he says. “For the retailer, there is increased foot traffic into the store as well as the opportunity to earn a small fee per transaction. For the banks and mobile transaction operators, there is the chance to offer a better service to a larger market, at a fraction of the cost of rolling out an entire new ATM network, especially considering rolling out into Africa. And for consumers, there is greater flexibility and access to their money.”

Best of all, says Ducasse, “the technology platform to enable this already exists and has been proven. Within the next 12 months to three years I expect to see consumers being able to walk into their local branch of most national retailers, and to transact with the bank of their choice.”