Instant EFT   
Our payment method is ideally suited to the sports betting industry. With SiD Secure EFT, it gives players the ability to make use of a transactional account rather than a credit option and gives consumers choice on checkout when paying for bets online.  

Our sports betting and online gaming merchants also win as funds are easy to reconcile and lowers operational risk.  

To add SID Secure EFT to your website checkout page, contact us today. Click here 

 
With some restrictions around travel, driving, and interacting with others, online services were a game-changer, allowing people to access all they needed while still remaining safely at home. So, it should come as no surprise that the payment industry saw a dramatic shift during this time.  
 
Below are some of the impacts Covid-19 has had on online payment trends.  

Contactless Payments  

With restrictions around interactions with others, distancing, and general concerns about hygiene and handwashing, tap-to-pay (or tap-and-go) payments saw a dramatic rise – according to Visa, these payments increased 150% in March 2020 compared to one year prior. Contactless payments enabled consumers to pay quickly without handing their card over to another person, leading to an increased sense of safety and security.  

eWallets, Mobile Banking and Instant EFT 

Another contributor to contactless payments are NFC-enabled phones and eWallets stored within apps. eWallets also allow customers to tap-and-go. These wallets also eliminate the need for cash or carrying cards, storing all information in a single, secure place.   

Mobile banking has also seen a rise, with more people relying on mobile apps and online portals to track and manage their finances, and even pay bills. Banks who previously did not have comprehensive online services have integrated more functionality into online access to make it easier than ever for people make payments by using Instant EFT, receive payments and transfer funds  

B2B Payments 

This shift also affected the B2B – business to business – segments. Traditionally, invoices may have been sent via mail to Accounts Payable and paid via printed checks. In these days of distancing and non-traditional work environments, this entire process has been embraced as a digitized workflow. Digital invoices are sent and can be paid through online payment options, eliminating steps (not to mention, saving paper and resources).  

Already a steady trend, digital payments have seen a huge increase in adoption globally in the past year and a half. This trend is not expected to slow down, with survey respondents from around the world stating that they have grown accustomed to (and feel safe with) making payments online for a variety of purposes.  

For more information on how you can add SiD Secure EFT as a payment option on your website. Click here or email us directly at sales@sidpayment.com 

Commenting on the investment, Offer Gat, the DPO Group Chairman said: “We are excited to include South Africa’s leading online EFT solution, SID, under our group, and have SID founder and innovator, David Liu, join us as a shareholder through this acquisition. SID has been a pioneer in the payments industry for many years and we have no doubt that they will continue to bring new and innovative solutions to our customers and merchants across Africa.”

SID began its operations in 1998 and has been providing secure online card processing to hundreds of South African e-commerce websites since. In 2007, the company launched a secure Secure EFT payment product that allows funds to be transferred online and in real-time from a client to a merchant’s bank account, with the transaction reference controlled by the merchant making reconciliation easy and convenient. SID has enabled merchants across South Africa to collect Secure EFT payments via a website, email or invoice and has become one of the most popular online payment methods in the country.

SID Founder, David Liu said: “the goal has always been to help people buy and sell anywhere, anytime and the DPO Group has a similar vision. By joining the Group, we have no doubt that together, we will achieve one payment solution for Africa.”

SID  is the 4^th acquisition that the DPO Group has made in South Africa following PayGate, PayThru and VCS. The Group was established in Kenya in 2006 and has since expanded to Uganda, Rwanda, Zanzibar, Tanzania, Ethiopia, Zambia, South Africa, Zimbabwe, Namibia and Botswana.

DPO Group CEO, Eran Feinstein said: “Setcom has continuously innovated and achieved impressive results in the South African payment space. We plan to expand and promote SID to all current and future merchants across our markets so that they may offer this payment option to their customers, further helping them to enhance their businesses.”

About Direct Pay Online Group

The DPO Group is the leading payment service provider in Africa serving over 25,000 online merchants including over 50 airlines, thousands of hotels, restaurants, travel agents, tour operators and other players in the e-commerce sector. We accept all major credit cards, mobile money and e-wallets, and are a leader in technology, usability and security across the continent. DPO uses the most sophisticated fraud prevention system for online payments in Africa and holds PCI DSS Level 1 Certification in 12 countries. The Group acquired PayGate South Africa in September 2016, VSC Namibia and Botswana in March 2017, PayThru South Africa in June 2017, and VCS South Africa in August 2017. For more information please visit www.directpay.online, www.paygate.co.za, www.vcs.co.za,  www.paythru.com or www.sidpayment.com.

Ten years ago, SiD was born, looking to bring secure online payments to the growing local e-commerce community. At its inception, the technical team was working in an environment that would look antediluvian in comparison to how we design and develop today.

To further put this in perspective, cloud computing also turns 10 this year. I wonder who can even remember working in an IT environment without the Cloud? Yet when SiD version 1.1 was released, the Cloud was nothing more than hype and speculation.   

Building the first iteration of our solution was not simple, given that we were one of the first to market. Version 1.1 was driven by download programs which, if they were used today, would be viewed with suspicion. However, that was not only readily accepted by our users but considered fairly high-tech at the time. Moving onto a browser-only environment in version 1.2 was a significant step forward, but users would still only see a window which they simply had to trust would link securely with their bank. Again, our loyal customers and their users were happy to do this, given the benefits of secure EFT.

Payment innovation – constantly moving forward

The SiD development team has made strides over the last ten years. Keeping up with technology changes, as well as the many advances made by our nefarious adversaries in the hacker community, has been a full-time job.

Our SiD version 2.0 has a javascript-heavy front-end following best practice. There are also new web frameworks out there and using them ensures we are in line with interoperable standards, keeping the product compatible with all browsers and across all devices.

At the heart of the SiD story has been our drive to build a solution which has usability at its core, without compromising on security. When you look at where the world of e-commerce and m-commerce is going, this is going to become even more important.

The constant drive toward mobile is shaping how every tech company designs. People are looking for speed and are used to instant gratification. Consumers are used to getting what they want, when they want it, wherever they are.

Looking internationally, Forrester predicts US online retail sales will reach over $500 billion by 2020, up from $373 billion in 2016. South Africa, admittedly coming off a lower base, will see even bigger growth. Forecasts by World Wide Worx from 2016 to 2020, show local online retail sales almost doubling.

Payments lie at the heart of serving up a frictionless e-commerce user experience.  Late last year Apple launched a payment button on its MacBook Pro keyboards and the growth in in-app payments is keeping the industry on its toes. Advances in device and biometric fingerprinting are getting increasingly complex when it comes to verification and authentication and every improvement needs to be factored in when we design for the user.

SiD has come a long way in 10 years and, the one thing we are very clear about is that the next decade will be pushing our payment innovation expertise to the limit. Fortunately, the team is smart, agile and committed and, if our track record is anything to go by, we will be ready for the challenge.

What were you doing ten years ago? Well, if you are South African, chances are you were listening to Rihanna’s Umbrella, queuing to watch the Simpson’s Movie, or cheering on the Boks as they hoisted the Webb Ellis trophy in Paris. For some, it may feel like only yesterday, but in IT, a decade may as well be a century.

In a world where innovation is almost exclusively written about in relation to start-ups and disruptors, it’s seldom that a company which has been around for a decade can still be seen as innovative. However, the pace of change in online buying, digital security and consumer expectations has forced constant re-engineering from companies in the payment space. Staying ahead of the innovation curve has been the key focus at SiD.  

Ten years ago, banks in South Africa were experiencing a high level of phishing attacks. The term itself was as new as the phenomenon and the banks had an uphill battle trying to stave off phishing attempts.

To add to their pain, banks were also trying to promote their online banking services and were forced to ramp up their consumer education process. It was a fine balancing act for them. They needed to allay concerns about the integrity of the offering and convince a nervous public into trusting their online services.

As a young EFT payment company entering a market which was beset with security concerns, we spent most of our time meeting with both the commercial banks and the Reserve Bank. We had to prove our offering would not compromise their offerings and, at the same time, explain the value of our offering for consumers wishing to use EFT rather than cards for online purchases.

The merchants, however, loved what we had to offer. The Secure EFT solution simplified their back office. Up until then, all EFT online transaction had to be done manually. Payments would have to be done during office hours and required extensive human intervention. Our offering automated the process, taking away a big pain point, and the solution was well received and quickly spread by word-of-mouth.

Although the e-commerce market was still in its infancy at the time, the tourism industry was driving the demand in South Africa. Airlines immediately saw the benefit of offering an online service and they also realised the benefit of offering as many payment methods as possible to their customers. Secure EFT was a hit with them, and this helped us reach and educate South African consumers in high volumes. For us, it meant ensuring we had a rock-solid offering which would integrate with the banks and was able to process payments accurately, in a high-volume environment. There was no greater stress test for our product and we were able to refine our offering at a rapid pace.

Ten years on, online payments have moved forwards in leaps and bounds. Payments have become so seamless that they are almost invisible in the process. In-app payments and mobile wallets are popping up wherever you look. The focus now is on making payments as frictionless as possible. Apple has even taken a further step to include a payment button on its MacBook Pro keyboards. Facebook and Google are shifting their revenue models to leverage their ecosystems and payments are all at the core of their architecture.

Security remains an ever-present threat to e-commerce. In its 2017 security forecast, RSA Labs found that 60% of fraudulent transactions originated from mobile devices. Moreover, the company says in 2016, a new phishing attack was launched every 30 seconds and has forecast that card-not-present fraud will dramatically increase, reaching over $7 billion in the U.S. by 2020.

While the online threats are still very real, and more sophisticated than ever, customers are far more aware of risks. Moreover, new regulations are coming through which are enforcing better authentication and verification. High levels of awareness and user education, offered by both the banks and online merchants have helped reduce the customer’s fear of using online and mobile payments which are encouraging e-commerce growth.

Although still a small part of the overall retail spend, South African e-commerce is growing at a healthy pace of around 20% per annum and this looks to increase as more people become connected via mobile phones.

SiD’s growth is tracking this with a very healthy 30% year-on-year increase in transactions since we began this journey ten years ago. More importantly, though, a decade spent at the heart of the payments industry means we have ten years’ worth of experience in understanding what it takes to build a secure system that meets customer expectations. Innovation remains the fuel that keeps us relevant.

Global shopping cart abandonment on e-commerce websites is reported at anything between 60 and 70 percent. Yet simple tweaks to the purchasing process and a keen eye on usability can ensure more completed sales and, ultimately, better customer retention.

While there will always be some measure of natural abandonment because customers are just browsing, there are some easy steps which can be taken to keep customers delighted and your bottom line healthy.

1. Keep it simple

The first and most important thing to remember is that if you make things too complicated you will lose your customer.

The large global players like Amazon have the luxury of being able to rely on the vastness of their inventory. They rely on their brand and their ability to offer exceptional deals. And, as a result, can afford to have a longer checkout process, secure in the knowledge that their customers are unlikely to go elsewhere. A smaller local player, meanwhile, will need to fight for each sale. They must ensure usability is built into the core of their offering.

2. Keep it transparent

Design a clearly visible process flow or breadcrumb trail on the site that shows exactly where your customer is in the process and how many steps remain to complete the process. Managing expectations minimises user frustration.

3. Don’t overcomplicate the info required

Many merchants will need to have certain information such as delivery addresses etc. That said, they don’t need a huge amount of personal information which some stores are still forcing their customers to hand over. Consumers are distrustful of this and wary of merchants using their information to market to them (at best) or sell their information to others at worst.

4. Don’t duplicate processes

Don’t make people do things twice! If you ask for an address, for instance, do it once at the beginning and that’s it. Duplications lead to frustration and customers will find their product on a competing site.

5. Keep the tech on the inside

Beware of serving up strange error messages. If there is a problem in the process, don’t kick the person out and make them start again, try to recover from the errors and allow the customer to resume their shopping where they left off.

6. Make it mobile

Don’t ignore mobile enablement on your site. According to Visa, one in four online shoppers use their mobile phone to make purchases. Providing a slick, simple, and secure mobile experience will open up this valuable channel and expose you to a rapidly growing marketplace.

7. Keep your site up to date

Merchants are often scared of making changes and so don’t benefit from the improvements which may come with plugin upgrades. While the bigger players have teams working fulltime on the purchase process, refining it and making it easier, mom and pop stores are handling this by themselves. Ensure your plugins on your CMS are up to date to take advantage of improvements and new features, including security.

8. Don’t leave the up-sell too late

Do the cross-selling and upselling at the beginning of the shopping process, or at least earlier on in the process. Suddenly trying to offer a two-for-one deal at the end of the process will frustrate the customer and you could lose them.

9. Offer choice when it comes to payments

Finally, make your payment process as simple as possible and make sure that you offer as many payment options as possible. Far too many merchants still only offer card payments, ignoring the simplicity of instant EFT. Card-not-present fraud is on the rise and shoppers are particularly sensitive about the possibility of fraud. They prefer the ability to pay in ways they are comfortable with and which they perceive to be the lowest risk.

By applying better checkout flow and design, e-commerce merchants can significantly cut down on the abandonment rates. It pays to review your site with a critical eye to usability and to stay up to date with new ways to make things easier for your customer.

Local business owners are seeing the benefit of offering online services, allowing their customers to book and pay for flights, accommodation and products whenever and wherever they choose.

Making sure that your site has as many payment options as possible makes good business sense. Not only does this allow freedom of choice, but by ensuring your site has instant EFT options, merchants can significantly cut down on fraud and improve customer service.

Manual EFT can be more trouble than it’s worth

Simply offering a manual EFT option will not solve the merchant’s problems. Manual EFTs can result in more work for already pressurised businesses. Peak season sees a big spike in online activity. Moreover, user error through incorrect capturing of data results in nightmare reconciliation challenges.

The airlines are an excellent example of just how difficult user error can be. When dealing with tens of thousands of online bookings, airlines used to require huge teams just to work on the reconciliations. This was one of the main reasons why many airlines have switched to the SiD Secure EFT solution.

However, this challenge is not the unique concern of the bigger organisations. Smaller businesses also have to ensure accurate records and most simply do not have the staff available to do this.

For e-commerce merchants, manual EFTs also delay their delivery results as merchants will need to wait for the transaction to reflect in their accounts before they release the goods for shipping. Besides delaying the delivery process, purchases via manual EFT often have a high drop-off rate. Many customers select the manual EFT payment method, but then they delay the payment, and often either forget or lose interest in the purchase.

Even cards are a risk

The festive season is a prime opportunity for fraudsters who know how busy the online merchants are and who take advantage of their lack of ability to properly monitor all transactions.

Even with 3D Secure, there are still instances of fraud. While South Africa has solid regulations in place from the Payment Association (PASA), some international issuing banks don’t require their cards to be validated through 3D Secure.

The hospitality industry faces significant risk as South Africans embark on their annual holidays. The small bed and breakfast outfits are particularly exposed to fraud risk over this time. Travellers can easily make use of fraudulent cards, leaving before the transaction can be flagged by the banks. This results in lost revenue and will also result in a chargeback for the merchant.

Manual EFT meanwhile, can delay the confirmation time as the frontline staff may only grant access to accommodation once the money has been cleared into the business’ bank account. This has significant risk from a customer care point of view and puts added strain on frontline staff who, ultimately, have no control over the process.

Third-party bookings also pose a significant risk. Most hospitality establishments will request the card that was used for the booking to be presented when guests arrive. However, this is not always possible. Students travelling will normally have their parents make the booking and so the card will not be available when they travel.

Instant EFT solves many of the peak season challenges

Instant EFT has a number of benefits that could limit or eliminate these challenges:

• Instant EFT transactions are guaranteed, giving the merchant peace of mind and allowing them to process delivery of goods and services immediately
• Instant EFT takes away any manual input, eliminating the reconciliation headache
• SiD Secure EFT is backed up by a shopper and a merchant protection programme which safeguards both buyer and seller
• Instant EFT eliminates the risk of card fraud
• Instant EFT can be integrated into the merchant’s website in under a week

The festive season will bring many benefits for local retailers, and if Black Friday is anything to go by, e-tailers can expect a healthy spike in their traffic and sales. Ensuring their payment offerings are up to the challenge will reduce the risk of fraud and ensure a better customer experience – a minimum requirement if they hope to retain loyal customers and avoid unnecessary fraud risk.

While fraud is well documented, chargebacks as a result of a dispute can be just as debilitating. The financial services industry has made strides in card fraud protection with the implementation of 3D Secure for card transactions. However, what many merchants aren’t aware of is that Instant EFT significantly reduces the chargeback risk.

According to statistics from the South African Banking Risk Information Centre (SABRIC), the banking industry’s gross fraud losses due to SA issued credit card fraud decreased by 28.6%, from R353.3m in 2014 to R252.2m in 2015. However, 75% of fraud is due to Card Not Present transactions which most affects e-commerce merchants.

What is a chargeback and why the problem?

A chargeback is essentially a dispute. The consumer would dispute the transaction based on various issues. This could be because the product is damaged, not what they thought they had ordered (in terms of the description of the product), or they may be disputing that they made the purchase in the first place due to stolen cards and fraud.

The unhappy customer would contact their bank and raise a dispute. The merchant’s bank will refund the buyer and then debit the merchant for the refund, including an additional fee.

This will clearly impact the merchant’s bottom line — not only in terms of them being out of pocket, but defending disputes can be a lengthy process which costs time and attention away from the business.

More than this, if merchants face too many chargeback claims their bank will revoke their merchant account. While they can apply to another institution for a merchant bank account, this process is tedious, admin intensive, and can take up to two weeks to set up. The loss of business during that time would be devastating to any merchant.

It is important to note that merchants will not find banks sympathetic when it comes to excessive chargebacks. Ensuring that chargeback ratios are kept in check is a core responsibility for a banking institution offering payment services, and one which they are answerable for to Visa, Mastercard, and other card networks.

Protecting your online store from chargebacks

It’s clear that merchants need to reduce chargebacks as far as possible. Here are a few ways which can help them protect their business:

1. Describe your product or service properly to avoid disputes. This includes a clear description of the product (including dimensions where appropriate) and, where possible, good pictures from multiple angles.
2. Use the best delivery service possible to avoid damaged goods or late delivery.
3. Try resolve disputes as quickly as possible. This is not only a solid way to build customer loyalty, but in most instances, providing a fast and equitable solution to a problem is cheaper than going through a chargeback arbitration.
4. Have a clear dispute settlement process clearly explained on your website and work with an experienced team of mediators to ensure quick resolution.
5. Make sure you keep excellent records of your transactions, shipping documentation and delivery receipts. These will have to be produced in any dispute.
6. Encourage your customers to use Instant EFT. The customer will have to authenticate their purchase in the same way they do through regular online banking. Since it goes through an interface with the payment provider you are working with, you are guaranteed to get the exact amount quickly, and without the risk of chargebacks associated with card transactions.
7. To add to the levels of security, also look out for payment providers that have Shopper Protection Programme. Having a dispute resolution system in place protects customers who may have purchased a product, but have not received it, or if the product is not what was described by the merchant. While this is there to protect the customer, ultimately it also favours the merchant. Some programmes offer a 100% cash back guarantee (up to R10 000) on any transaction which was not authorised.

In the world of e-commerce, two things are guaranteed: The increasing sophistication of fraud attempts; and the growth of online competitors who will be competing for your customers’ money. Working with a service provider which can offer you the means to transact quickly, safely, and with less operational risk could be one of the key ways to keep your company ahead of the pack.

E-commerce merchants depend on the trust of their customers. Buyers need to trust that their transactions are secure and that they won’t fall victim to online fraudsters – or they simply won’t make use of the service.

“E-commerce is growing by leaps and bounds, but each business, whether large or small depends not only on great products and good delivery, but also on the trust of their customers to use online payment methods so the transaction can actually take place. If this trust is not there, they may as well close shop,” says Kyle Rozendo, CTO at SiD Secure EFT.

Using Secure EFT offers merchants many advantages, but security is certainly one of the highest on the list.

Secure EFT allows customers to make payments to online merchants directly from their bank account via their existing internet banking facility.

This method transfers encrypted, once-off payment information into the banking page, where all security provided by the bank remains in place. The payment will only be completed once it is authorised, via normal banking authentication methods such as a One Time Pin.

“Secure EFT also pre-populates the value field, unlike a manual EFT, where user errors can creep in and which delays the purchasing process. Reference numbers from the merchant are also set which, when it comes to reconciliation, is really compelling. Human error can lead to inaccuracies and accounting nightmares,” Rozendo comments.

In terms of data protection, Secure EFT allows customers additional peace of mind, since at no point is their information stored on third-party servers.

“SiD uses advanced encryption to ensure complete data protection, and although SiD invokes your internet banking service, it does not store your bank account login details such as usernames and passwords. This sets Secure EFT apart from any normal card transaction,” Rozendo explains.

To add to the levels of security, SID has a Shopper Protection Programme. The company has a dispute resolution system in place which protects customers who may have purchased a product, but have not received it, or if the product is not what was described by the merchant. Moreover, the company offers a 100% cash back guarantee (up to R10,000) on any transaction which was not authorised.

“This programme is indicative of our confidence in our systems. The dispute resolution service provides an additional level of comfort for customers and means we can also ensure all our merchants offer the highest quality of service.

“Any negative online transaction experience can significantly impact a merchant’s reputation. We see our solution as a vital part in building trust in e-commerce in general, which can only benefit growth in the sector.”

PSD2 was drafted to further standardise, integrate and improve efficiencies between EU states as well as stimulate competition in payments across the Eurozone. Effective regulations also add to the protection of consumers as well as the obvious benefits of more options, cost savings and increased service.

Although a large chunk of the attention has been focused on the open banking APIs and the standards surrounding this requirement, the new ways that consumers can pay for purchases should be giving local bankers pause for thought.

European online shoppers wishing to pay via their bank account, rather than the traditional card payments, will certainly benefit.  The Payment Initiation Service Provider (a ‘PISP’ under the new PSD2 terminology) will allow online merchants to ask for permission to securely access your bank account, with a simple yes or no response as to whether you have funds. This means that multiple intermediaries are removed from the payment lifecycle – resulting in cost savings as well as fewer potential points of failure.

In fact, a recent (pre-Brexit) UK study by Accenture suggests that online merchants will pass these savings on to consumers and estimated the cost savings to be around £1.45bn of card transaction revenues between 2017 and 2020.

One of the most compelling aspects of PSD2 is that it would create an environment for new players to register as payment institutions. These new entities, although well regulated, have nowhere near the restrictive requirements of a commercial bank since they neither offer loans, nor credit facilities. They will greatly increase the choice for consumers and the added competition will drive innovation and further cost cutting benefits.

We could use a little of that

Although South Africa has been recognised for its excellent innovation and benchmarking technology developments, we cannot claim to have the most competitive banking environment.

Moving towards a PSD2-type of regulatory environment would fling open the doors for more players to register as payment institutions.

Not only will this bring additional competition to the market, but it would also make a substantial difference to the e-commerce landscape.

While online retail still only accounts for a small portion of retail revenue in South Africa, growth rates of more than 20% year-on-year for the past 16 years clearly demonstrate the potential of local e-commerce.

The best way to further boost these numbers – and the economy in general – is to find ways to onboard new merchants as quickly as possible.

It currently takes around two weeks for a local company to get trading online. The compliance, registration for merchant bank accounts, and volumes of paperwork, puts South Africa well behind our global contemporaries.  In the US and Europe, for example, you can sign up for a merchant account online and be approved almost immediately.

A revised regulatory environment would bring all the benefits coming to the EU e-commerce merchants. Fast, simple registration to get online and trading, lower costs, more competition and better choice – all of which will drive innovation and further improve services and prices.

Light-touch regulations don’t mean risk

Taking a page out of the EU book would also benefit consumers. Of course, they will score with lower prices, but the PSD2 regulations actually go a long way towards better oversight – something which is nowhere near as robust in the current local payment landscape.

While it’s hugely difficult to meet the requirements for a banking license in South Africa, payment service providers and aggregators face very little regulation.

Unlike the EU Payment Initiation Service Providers, local players are not compelled to keep their operating capital separate to that of their customer’s fund.

Any institution taking payments in the EU needs prove they have enough capital to sustain business operations and the regulators audit these companies every year. Should the volume of business increase, the capital requirements are increased to ensure these capital reserve safeguards are met.

This shifting capital reserve has been formulated so that the entry requirement is fairly low, allowing for easy (but safe) entry into the payments market. However, by keeping revenues separate and implementing yearly audits, the chances of clients being exposed to the risk of non-payment are minimal.

In short, there may still be some debate around interoperability standards, but the new PSP2 regulations will significantly drive competition and innovation into the payments space. It will have a profound economic impact, particularly for online merchants. For a country which prides itself on its progressive banking and payments industry, it seems curious that we have not yet moved in the same direction.