Catalyst

South African ATM software developer Absolute Systems has launched a payment switch for secure deposits by multiple small businesses, which it operates as a service on which it charges a per-transaction fee.

Summary

Imali, which means "cash" in one of the African languages spoken in South Africa, is clearly a service developed for a company with particularly acute security concerns like its homeland, but Absolute sees opportunities in other cash-centric economies such as Turkey and Italy. It's revealing that, while it was designed as a multi-bank secure deposit scheme, Absolute says at least one South Africa bank is considering the installation of Imali terminals in cubicles dedicated to small business customers who will be able to benefit from its real-time capabilities, without having to queue at teller stations.

 It's also interesting that, while the Imali switch was developed for a specific market requirement, the ATM industry generally is moving to deposit capture as part of banks' moves to automate basic teller functions beyond dispensing cash, with in-branch ATMs increasingly being supplemented by deposit kiosks too.

While the Imali switch may well have potential as a deposit capture device in other countries,will need to add the ability to accept cheques if it is to enjoy wider appeal, and this will of course not be able to offer the same real-time handling as cash.

Comment

Payment switches, at least on the retail banking side, have traditionally been designed to handle cash dispensed from ATMs, but Absolute's Imali service uses one the company wrote itself, for handling cash deposits. The service puts a device combining a switch and a strongbox into a secure environment to which, ideally, several small retailers have access, such as a gas station, a convenience store and, say, a café.

The device credits their respective bank accounts in real time as the deposits are made and monitors the amount held in the strongbox so as to trigger a cash collection once a certain threshold is reached. For the retailer, this obviates the need to have, say, Sunday's takings sitting on their premises till banks open on Monday, as well as, in high-inflation economies, the ability to start earning interest earlier.

In another words, the attraction of the Imali service is both security, since the cash becomes the responsibility of the bank once it's in the strongbox, but also its real-time capability. The service, which was launched recently in South Africa, currently relies on all the cash collected going to a central hub from which it is then distributed to the respective banks, but the real-time crediting capability opens up the prospect of a future development, in which it can go to various regional hubs, manned and operated by a security company such as Securicor or G4, from which cash can then be recycled locally, cutting down on longer journeys with larger sums.

Ask the analyst

Rik Turner

rturner@datamonitor.com