The group will launch what it hopes will be the world's first successful electronic currency, writes AMANDA VERMEULEN

FIRSTRAND is poised to launch what it calls eBucks, the world's first bank-backed, secure electronic currency, in September. eBucks will be released locally, with plans for international expansion.

The banking group has set up a separate company called eBucks.com under the leadership of Michael Jordaan, whose previous duties in the group included Origin and FNB Home loans.

The new venture will see FirstRand launch a customer appreciation programme across the entire group, using the alternative currency of eBucks as a secure transaction payment method.

The new venture will overcome the low credit card penetration in the SA market - only about 5% - by offering an alternative to coins and notes, and address customer concerns about Internet security when using their credit cards for online purchases. Using eBucks, the FirstRand group will assume all the transaction risk.

FirstRand will invest R300-million in the venture, establishing a portal to access a new database of customers from the group's existing databases for First national Bank, Origin, Henry Ansbacher, Outsurance, Momentum, Wesbank and RMB Unit Trusts.

Although the initial trusts will be to target the group's own customers as part of an aggressive customer retention plan, eBucks also aims to attract new clients over time. FirstRand's 5 million customers will be rewarded by earning eBucks every time they use one of the group's services or buy any of its products. In addition, they will also qualify for special discounts on for example, hotels and airlines, giving FirstRand clients purchasing power.

Jordaan, CE of eBucks, says: "The group historically has a very low cross-selling ratio as there has been no incentive for customers to stop in one shop. eBucks provides the glue to do that now, and even if it only slightly improves our cross-selling, it will be very beneficial for the group."

He says this is the first time an electronic currency, backed by a bank, has been launched in the world. Similar ventures have been tried in the other jurisdictions, but lacked the financial capacity and infrastructure offered by the bancassurance group.

FirstRand has 27 000 merchants and 1 600 ATMs, processing 50-million transaction a month. Eventually eBucks will establish a system where retail vendors are enabled to process transactions with customers who have eBucks accounts.

eBucks account holders will be able to use the Internet, interactive voice response facilities, debit and smart cards, cellphones and any other type of electronic facility.

Jordaan says that the aim is eventually to take the venture global. FirstRand bank CE Paul Harris says international expansion may be in partnership in other regions.

About eBucks:

eBucks, the rewards programme offered by First National Bank (FNB) and RMB Private Bank, is acknowledged as one of South Africa's leading rewards programmes with highly active members spending in excess of 80% of the eBucks earned in any given month.