MTN Mobile Money yesterday announced the launch of payD, an e-commerce payment mechanism that allows consumers to make online purchases using their bank cards.

For the first time, debit card holders could make secure online purchases, the group said, adding that 1time Airline was the first company in SA to embrace this new online payment technology.

MTN pointed to World Wide Worx's "Online Retail in SA 2011" report, which showed that retail e-commerce hit R2billion last year.

"But it's just 0,36percent of our country's total revenue sales," said Dave Parratt, head of new business development at MTN Mobile Money.

"The answer lies with the consumer and the merchant. On the consumer side, only 3percent of our population has credit cards, and this is generally the way to transact online.

"On the merchant side, transaction costs for credit cards cut deep into margins."

Standard Bank and Nedbank PIN-based debit card holders on the MTN and Vodacom networks can use payD, with more banks coming on board within a year.

MTN said that payD used the Authenticated Mobile Transaction technology developed by MTN Mobile Money, which used SIM and PIN technology to transform any mobile phone into a secure, encrypted point-of-sale terminal.