Knowledge

Author: Ollen Machimbirike

Category:

Date: 9 February 2016

Trials for the Fair Pay smart-card payment system are under way in Pietermaritzburg, South Africa

Trials for the Fair Pay smart-card payment system are under way in Pietermaritzburg, South Africa. The aim is to have 10 000 taxis converted from a cash-based transaction system to the smart-card system in 2016.

Fair-Pay

Fair Pay smart-card payment system


There are more than 200 000 minibus taxis in South Africa, used by 15 million passengers every day, generating more than R90 billion every year. However, the industry remains part of the informal economy, making it difficult to regulate and even to trace the money trail. The new system seeks to dispense with cash in favour of a structure centred around a card, known as Fair Card. Fare payments will be deducted when the card is swiped on a receiver machine to be installed in each taxi. The proceeds will be transferred to the taxi operators weekly by the participating financial institution. The brains behind the proposed system is TaxiChoice, the commercial division of Santaco.

The new system seeks to dispense with cash in favour of a structure centred around a card, known as Fair Card. Fare payments will be deducted when the card is swiped on a receiver machine to be installed in each taxi.

It is envisaged that the 15-million taxi users in the country would be able to use the Fair Card to transact beyond the taxis themselves, as such the implications on financial services as a whole are significant. The system will allow them to buy groceries at retailers and transfer money from one card to another. Each cardholder will be able to use the Fair Card to conduct up to R3 000 of transactions each month. However, it will be a closed system, requiring Fair Pay terminals at retail stores, petrol stations and other sites. The system will initially not be interoperable with other financial institutions.
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