Archives For March 2013

Today we’re looking at Near Field Communications or NFC for short and how it’s affecting the mobile payment market.

271758-google-walletAccording to Wikipedia Near Field Communication (NFC) is defined as “a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters. Present and anticipated applications include contactless transactions, data exchange, and simplified setup of more complex communications.”

Setup:

The service is becoming extremely popular as a payment tool in an attempt to replace the plastic card in your pocket with your mobile phone. As an example you can link your credit, debit or prepaid card to your mobile phone and then pay. A great example is the MasterCard PayPass service, which is a contactless payment feature that provides cardholders with a simpler way to pay. Now, you can simply tap your card, key fob or cell phone, on a point-of-sale terminal reader to pay. It works just like your traditional MasterCard payment card-but no more swiping or giving your card to cashiers.

NFC is starting to become established in the UK. Orange’s QuickTap scheme allows purchases of £15 at 50,000 shops in the UK (including Wembley Arena, Subway and McDonalds) just by tapping a phone, though only from NFC-enabled phones hosting an app that has been topped-up with credit.

NFC is only going to get bigger with analysts predicting a minimum of 285 million mobile and consumer electronics devices will ship in 2013 and the base of NFC enabled devices hitting 500 million by the end of the year.

In South Africa there are small trials going on although the phone manufacturers, mobile providers or banks, have announced nothing substantial.

Pro’s:

• One device for all your payments

• Safe and secure even if your phone is stolen (you need a pin for the app)

• Could be great for public transport. Just tap your phone and get onboard

Con’s:

• Have to get very close to other device or payment point to process a payment

• Costly for a merchant to adapt their entire payment infrastructure to accommodate NFC

In an unsurprising turn the Middle East region has become the second highest prepaid region in terms of growth. This is according to speaker Francesco Burelli at the Prepaid Summit to be held in the Middle East on April. The Middle East is the second fastest growing region at 28 per cent compound annual growth rate based on 2010 and 2012 data.

Cards-and-Payment-Middle-East-2012

“From 2013 to 2017 the circulation of prepaid cards is forecast to steadily increase at 11 per cent compound annual growth rate globally, however MENA markets will outperform, exhibiting a stronger growth of 18 per cent compound annual growth rate. The Middle East is the second fastest growing region at 28% CAGR based on 2010 and 2012 data.

“The open loop prepaid cards will grow at a faster rate in the Middle East. The remittance, youth and unbanked segments are very significant opportunities to be exploited by providers”.

According to Burelli, many types of prepaid cards are available in the market, but the two main categories are “open-loop” and “closed-loop.”

“An open loop card is associated with and bears the logo of an electronic payment network such as MasterCard and Visa. Open loop cards can be used everywhere the network merchant is honored. Closed-loop cards are single merchandise cards that can be used only at merchant locations, typically are not reloadable, and normally can be redeemed only for goods or services.”

This is an exciting trend for prepaid around the world. We’ve recently reported that prepaid is starting to grow in Africa and this trend in the Middle East can only help to concept grow further.

Mobile payment titans – Paypal, Intuit and Square, are moving to Europe in their battle of mobile payment domination.

Intuit has finally launched its mobile device-based card payment service, Intuit Pay, in the UK and this gives Intuit a key opening battle advantage, as its chief competitors are yet to release their offerings in the U.K. PayPal is working toward unveiling its mobile payment service in the U.K. this year, the company hasn’t yet done so. And neither has Square.

Intuit-Pay

Interestingly, the Intuit service is the youngest of its three competitors as it was only announced in November 2012. However launching in the UK is just the beginning. Terry Hicks, VP of products for Intuit’s global business division, told TechCrunch in an interview that the intention is to use the UK as the first market ahead of a wider European and worldwide rollout.

“We think of Intuit Pay as part of an operating system, one that includes QuickBooks but other products, too,” Hicks tells TechCrunch. “Intuit Pay embraces the fact that it provides a one-stop shop. Once you sign up, you get all the invoice, payment, offline, mobile invoicing included.”

It’s impossible to say who will win the mobile payment wars worldwide however the first salvo has been fired.. But industry watchers believe that Intuit, Square, and PayPal will be duking it out for the remainder of the decade as mobile payments begin to grow into a continent-wide consumer phenomenon. What we can expect from this is a rebuttal from banks and other major payment providers so the war is just hotting up.

U.K. based Tuxedo Money Solutions was having major issues with fraudulent transactions.

credit-card-onlineOne of Tuxedo’s most popular offerings enables consumers to add value to their prepaid cards online via a credit or debit card without having to link to a bank account. However, the site soon became a target for criminals who would use stolen payment cards to add value to prepaid cards, the company says. Criminals have long been attracted to the anonymity of prepaid cards and often use them in money laundering schemes.

The company says it was at risk of incurring fines from card companies and was added to a merchant watch list because of its high rate of chargebacks.

Tuxedo in desperation turned to fraud prevention and payment services vendor ReD Worldwide for help. What makes the service interesting is that it draws on a multi-merchant database of both legitimate cards that have been used for successful purchases and stolen cards that, for example, have been tied to chargebacks. It also uses databases of lost or stolen payment cards, IP geo-location and device IDs to recognize suspicious transactions. Users making transactions in unusual locations are flagged as suspicious.

The service also enables clients such as Tuxedo to review transactions and see why they were accepted or denied and manage or change fraud-screening rules and cross-check names, addresses and phone numbers registered with payment cards with the information the consumer enters.

Fraudulent transactions now represent less than 1% of its sales and the web is now one of the most popular ways for prepaid card users add value, with consumers adding $1.5 million per month to their prepaid cards via Tuxedo’s site, the prepaid card provider says.

It’s always fascinating to see how technology makes such a difference in the fight against fraud.

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As prepaid grows around the world; one of Africa’s biggest economies is no different. Nigeria’s Enterprise Bank customers can now use the “Enterprise Bank MasterCard Verve Prepaid Card” that is used locally and internationally.

The new card is a standard prepaid service with a chip and pin debit card that can be pre-funded with cash. The card can then be used to effect cashless payments (like a bank debit card) on the internet, point of sale (POS) terminals and withdraw cash from Automated Teller Machines (ATMs).

What does make the card particularly appealing to a market like Nigeria is that the card is available to customers and non customers of the bank. The card, which could be pre-funded in the naira or United States dollars, is ideal for students, corporate account owners (expense cards, estacode, and corporate travel) and travel cards holders among others.

For a country where there is a problem of carrying large sums of money around this is the perfect service. Welcome to the party Nigeria!

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Today we take a look at the The AwardsCard™ by the Achievment Awards Group. This card is aimed at fulfilling employee rewards and can be used for driving sales, motivating channels and improving customer care.

Used to drive performance, this card has 3 different options available:

  • The Single Load – a disposable card for once-off gifts; it can be loaded with any amount and be used for birthdays, thank you gifts or achievement recognition.
  • The Reloadable – reward values are loaded into the AwardsBank account each month, to drive continuous improvement and keep employees motivated.
  • The Reloadable with online awards catalogue – the only incentive card in South Africa that offers dual currency: shop online from our Awards Catalogue, or use at almost any retail outlet that supports MasterCard™.

Pro’s:

  • Cardholders can shop via our online catalogue of awards that is stocked with over 10 000 awards
  • The Compliments card can be used anywhere in South Africa where MasterCard is accepted i.e. anywhere where a MasterCard point of sale (POS) device is available.
  • Is re-loadable so you can continue to load money onto the card until the card expires
  • Issued by Standard Bank, processed by Tutuka, and with backing by MasterCard, the card is reliable, safe and an easy-to-use product

The benefits of a AwardsCard™ include:

  • A variety of card options to suit your requirements, including once-off use or on-going rewards
  • Card orders and processing is done in just 3 days, with online and telephonic orders available
  • Full management by Achievement Awards Group, including everything from transaction history to account balances, monthly reports and delivery
  • Flexible shopping options, from the online Awards Catalogue to over 200 000 MasterCard™ approved outlets in South Africa;
  • Rewards employee performance, channel partners, sales performance or even customer loyalty
  • All client queries and support are handled by dedicated account managers, with 24/7 support via the web or self-service helpline

http://www.awardscard.co.za/

SONY DSCCombining donations and mobile payments, the iGIVE Digital Donation Kiosk is available to accept payments from mobile phones.

According to Matt Welter of the company that developed the system, inLighten: “This unique kiosk has been created to address a number of the issues faced by organizations such as museums, zoos, arts groups and houses of worship that depend on donations for a significant portion of their funding,”

The aim of the iGIVE is to promote spontaneous giving and through the “cool factor” entice those who would previously not give charity to test out the system. Once they see the simplicity they’ll be more aware of the needs of the less fortunate.

In addition to accepting checks and mobile wallet accounts, the iGIVE also can take cash, debit and credit cards. A touchscreen user interface with pop-up keyboard adds to its ease-of-use and creates a quick and convenient process for donors.

We think this is a great solution for helping people transition into a cashless society and helping donation-supported organisations be on the cutting edge.