FNB launches geo-based mobile payments

The bank is adding a new feature to its mobile application that will allow its customers to make and receive payments when they are in close proximity. By Craig Wilson.

Michael Jordaan

First National Bank is launching a new payment service that allows users of its mobile app to make payments to one another without needing to exchange banking details, provided they are near to one another.

The service uses the GPS chips built into modern mobile devices, with authentication provided by the app.

The service appeared in Apple’s App Store and Google’s Play store on Monday morning. It is also available for BlackBerry devices.

FNB CEO Michael Jordaan will launch the location-based payment feature at an event in Johannesburg on Wednesday. It appears the bank didn’t intend to release the app to users ahead of Wednesday’s launch. TechCentral broke the news about FNB’s plans on Monday morning.

The media invitation to the launch event hints at the new payments feature with phrases such as “get a little closer” and “a new way to pay”.

FNB customers will be able to use the service to make payments to — or receive payments from — app users that are nearby. During the set-up process customers can link one of their accounts — assuming they have more than one — to make and receive payments.

Click to enlarge screenshot

Only the person making payment is required is required to log in; the receiver simply selects “receive payment” and the funds are credited to their default account.

It appears that there is no cost for transfers and it’s not immediately known what the maximum value of transaction will be set to.

The service is only available to users with devices that have GPS functionality, including Apple’s 3G-enabled iPad — Wi-Fi only iPad models don’t support GPS.

Non-FNB customers who wish to receive a geo-based payment can download the FNB banking app. By selecting “geo payments” and entering their cellphone number, an e-wallet (an electronic store of funds) will be automatically created for them into which they can receive a payment. Payments made to the e-wallet can be withdrawn as cash.

Absa, meanwhile, has been trialling near-field communications (NFC) payments with 500 of its employees since December last year. But being GPS based, FNB’s offering doesn’t require users to have NFC-enabled smartphones.  — (c) 2012 NewsCentral Media

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  • http://twitter.com/duanemck Duane McKibbin

    Just saw an update in the Android Play store with the following changes:
    1. Make and receive GEO Payments to and from other App users in close proximity to you
    2. This is a another innovative feature as you do not need to enter your recipients account details when making GEO Payments
    3. Using the location services of your devices, you will now be able to make and receive payments easily and conveniently

    So it looks like they’ve pushed it out early. Very cool

  • Zynbad

    would love to attend the launch on wednesday. How do i get an invitation

  • http://www.cognitiveradio.co.za/ Boyan S

    I’m curious as to the specific problem this service aims to solve. Granted it has wider support on its side (unlike NFC) but it surely can’t take that long to type in someone’s details. Ideas?

  • Matt Croxon

    I agree with Boyan regarding the problem that it’s trying to solve. If it’s simply ease of payments, what about a QR Reader integrated into the App (for phones with cameras) / or a simple merchant code (for phones with keypads :) ) to simplify the selection of the vendor. Not all phones have GPS chips. GPS co-ordinates can also be spoofed (although I assume that the only potential for risk would be that I can make a payment to a vendor in a far off location).

    I’m assuming that this offering is limited to FNB clients, and FNB-registered vendors. I’d like to see some collaboration between banks in the South African market to realise a truly mobile, independent payments solution. That being said, the innovation is great. FNB & ABSA (NFC trialling) – keep it up.

  • mattcrox

    Okay I see that the article’s been changed to allow for payments from FNB to non-FNB customers. This could be a game changer. I hope that limits have been put in place to reduce the potential for money laundering . I suppose the potential for laundering is no greater than that of ABSA’s CashSend product though. 

  • Greg Mahlknecht

    Really works well – just tested to someone 2 blocks from where I am, 500m as the crow flies.  Although it won’t scale well – there will be serious information overload in shopping centers for example – it’s a really nice stopgap measure until NFC gets a foothold.

    I assume that FNB will launch a merchant account, whereby you’ll geocode your business in your online banking and tie it to your account, and then it’ll always be in “receive” mode.   It’s impractical and pointless for shops to have physical devices to receive payments.  So if you’re in a shopping center, all the shops with Geopayments enabled will automatically come up in your list without them having to do anything.  Pay them, and they get a confirmation SMS.  This is where FNB will probably skim their fees from, ie. just replicate the credit card model.

    Well done, FNB.

  • Richard Firth

     Greg has it on the button.  Go and look at a new South African start-up called !Waytag.  It allows vendors to geocode their premises and own the location.  The idea is to link mobile phones like the FNB app to the location of the vendor and approve payment due to proximity.

  • Koos

    Its all fine. but if I’m inside a building there is no GPS signal. I dont think this is meant for merchants… try getting a GPS fix inside Menlyn Shopping centre… good luck

    But I think its awesome for personal use
    Well done

  • Greg Mahlknecht

    I think it’s absolutely perfect for merchants – remember that searching for nearby recipients happens on FNB’s servers.  So they merchants set their shop position once-off on a map on FNB’s site, and from then on it should always come up on the devices of people nearby the shop.  There’s no need for merchants to have a device. 

    As for the GPS fix – because of the large tolerances in the system (I estimate around 1km, I managed to do 2 transactions, one at 500m, one about 700m according to my rough calculations) the initial fix your phone gets from wifi/cellphone triangulation (when you go to your phone’s map app, that big circle that comes up before it gets GPS lock and shrinks) should be more than enough to pair you to the merchants around you.  This triangulation is usually fairly accurate in shopping centers where there’s extra aerials for coverage and penetration.

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