Altech NuPay History
Traditionally micro financiers retained the Card and Pin of his client, in order
to withdraw money that his client owed him, via the ATM network. On 1 June 1999
the Government Notice 713 to the Usury Act, 73 of 1968 (The Exemption Notice) declared
that it is illegal to retain personal information such as bankcards, PIN codes and
identity documents as security or collection arrangements.
Combined with the above legislation and the impending revoking of the PERSAL deduction facility to the micro lending industry, a gap was created in the market for a legal electronic collection method.
Itas Services was approached in 1998 by a group of micro financiers to find an electronic payment solution to the issue of card and PIN. At the time Itas Services was involved in the rollout of Absa's debit card. It was in this time that the concept of the Altech NuPay transaction was formed. Itas Services went ahead with the development of the software that was based on the debit card switch and developed a transaction that conformed to all banking rules.
Once developed Itas Services approached the banking community for a partner. After negotiations with various banks, Absa Bank having seen the potential of the Altech NuPay transaction, bought into Altech NuPay. This led to the establishment of a joint venture between Itas Services and Absa Bank, now known as NuPayment Solutions.
The basic functionality is of the Altech NuPay system is to provide a facility whereby a micro financier can process an electronic transaction to make a transfer from a client's account to his own account, similar to what is currently being done with credit and debit card transactions. The difference is that, due to the lack of funds in the client's account, this transaction must be processed at a later value date. This is done without the retention of the client's ATM card or his PIN.
Altech NuPay has been successfully operating in the micro lending industry since November 1999. Altech NuPay had successfully now introduced a facility that provided real time transactions to micro financiers, which then eliminated the need for them to retain a person's card and PIN. The first successful Altech NuPay transaction was processed on an Absa account on 14 November 1999.
In April 2003 Standard Bank joined the Altech NuPay system and the first successful transaction on a Standard Bank account was processed on 15 April 2004.