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Mobile banking reaches new level in Russia

Under a pilot project launched by Sberbank and Visa International, a few select Muscovites can use their mobile to buy train tickets or pay for cable tv.

A customer's information, usually stored on a bank card's chip, will be stored on the SIM card of a cellphone. Special software will allow users to follow instructions on their phone screens to make payments to participating merchants wherever their phones work. 

This year, mobile subscribers will only be able to pay merchants who are already part of Sberbank's network, like cable television channel NTV-Plus. In the future, however, the payment platform is planned to be accessible to all businesses that accept Visa.

The technology, called 3-domain secure, does not reveal a credit card number or pin code. Instead it uses a series of passwords and requires confirmations from Visa, the bank and the merchant.   "As far as we know, [this system] has not been broken yet," Naumovski said, adding that the same authentication process is widely used on the Internet.

Neither Visa nor Sberbank are disclosing the financial details of the deal, signed in December. But if the year-long pilot is successful in Moscow, Visa says it will aim for agreements with other banks in Russia and the CIS.  Mobile operators are also banking on the technology to help keep their customers. No. 3 MegaFon has already signed an agreement for technology use with Sberbank, Sobolev said. MTS and No. 2 VimpelCom are currently in negotiations, he added.

Other related articles about the Russian mobile industry:

: Gearing up for 3G in Russia

: Content strategies for Russian operators

: Good piece about the state of the Russian Telecom industry, achieving a phenomenal growth of 30-40% a year. However two things are capable of putting an end to the growth rate – economic decline and tougher regulation. More here.

Mobile Banking in India

A brief look at the mobile banking services in India. Currently services include SMS based account information and payment services. For example ABN Amro India has launched its Mpower mobile banking and payment platform where consumers can make mobile payments at merchants equipped with Mpower terminals, with the bank validating the transaction data before sending the customer a return SMS message with approval for the payment.  More here. 

KSF for mass adoption of mobile banking services in India:

But there are bigger barriers. Interoperability, fraud and security are other major concerns. To secure interoperability and enhanced usability, versatile chips are a must, which can connect several banks and carriers simultaneously. Mobile banking might take off in India if banks initially offer some services for free.

"Banks and service providers need to work closely to streamline customer interfacing systems and enhance user experience," says Atul Bindal, CMO & director, Bharti Tele-Ventures.

From users' perspective, technology is on its way to aid growth. Koreans, known to be tech-savvy, use mobile banking in a big way. Some of them already avail of double-slot mobiles that have two SIM cards a regular one and another that's a credit/debit card SIM. About 3.3 million transactions were reported by Bank of Korea in 2004.

Related:

: Reliance Infocomm plans to launch m-commerce services

: Booking train tickets in Delhi

MoPay - SMS based mobile payment system

MoPay is a South Africa SMS based mobile payment system marketed towards business owners. At the moment 134 vendors have signed up for the service, allowing them to settle accounts, receive payment from customers and remunerate clients anytime/anywhere. Earlier conventional Speedpoint credit card swipe machine were used, but now business owners like plumbers of flea market vendors can use MoPay without needing to purchase a one.

How does it work?

....typically a supplier will send an SMS to a business owner with payment required details the person paying will select the amount to be paid, the date he wants the payment to be processed and activate the transaction using his pin number as well as the business owner's assigned MoPay number.

He says once the MoPay service has authenticated the identity of the parties and authorised the payment, both the merchant and the person paying get a payment confirmation message of their choice. A vendor subscribes to MoPay for R200 a month after an initial R200 signing-on fee. They then get a unique vendor number to receive payment from a client.

Click here for more information.

Other:

: Susana Schwartz on Simpay: Reaching an Untapped Market

Why Simpay?

Where incompatibility issues were prevalent for both financial and technical reasons, Simpay's technical interface and application-level payment technology, as well as its partnership scheme among members, may offer a standard method for all parties to link up technically and contractually.

"These operators recognize the low-value end of the mobile commerce market is largely untapped," says Simpay CEO Tim Jones, who would ultimately like to see Simpay become an alternative to cash. "If you wanted a Coke or to refresh a parking meter, you could conceivably do so with your mobile phone in the absence of cash."

That would not be possible if people were not allowed the freedom to have charges of $10 or less debited to their accounts via their mobile phones. "Currently, major credit cards do not support $1 and $2 payments," Jones says, "so subscribers buying iTunes, MP3s, games, ringtones, have to rack up purchases to meet a minimum requirement ranging between $10 and $20 by Visa or MasterCard."

: The Potential Profitability of Prepaid services

Bank Direct to launch text banking services

Bank Direct of New Zealand launches text messaging service where you can check your account balances, view last 10 transactions as well as transfer money between accounts.

Cell phone based micropayments

What's next in Wireless? - Micropayments. More from this Washington Post article. Hat-tip: Scott Loftesness from Payment News blog.

The panelists agreed that one of the most interesting and potentially lucrative wireless niches will be "micropayments," finding ways to use a cell phone to pay small amounts, such as $1 or $2, for a new ring tone or a game. "That's a gigantic opportunity," said Mark Ein, founder of District-based venture capital firm Venturehouse Group.

The Payment News blog edited by Glenbrook Partners is an excellent resource on mobile payments and m-commerce. Here are some recent interesting articles:

: Susanna Schwartz writes about Simpay - the European mobile commerce consortium

: Using your cell phone as your wallet

: Disruption analysis in the mobile payment market

: Evolution of mobile payments

: What's happened to the mCommerce market in the US?

Cell phones as credit cards

Good piece from NYT on using cell phones as credit cards. Hat-tip - Payments News:

In South Korea, people are already using cellphones as credit cards, said Sue Gordon-Lathrop, vice president for the consumer products platform for Visa International. She said American consumers would eventually embrace these new functions, but acceptance could be slower than in Japan and Korea, where people are more comfortable with using phones for many purposes.

Related:

: First mobile payment service in Kuwait. More here

: Wireless payments in South Africa and how e-payments are benefitting South Africa's economy.

: Korean Telcos agree on M-commerce interoperability

: M-commerce services in Estonia

First mobile payment service in Kuwait

Burgan Bank and Wataniya Telecom introduce mobile payment services in Kuwait allowing consumers to use their mobile phones for retail purchases. The service is based on WPKI infrastructure and runs on WAP enabled handsets.

Wireless Payments in South Africa

From AllAfrica:

First National Bank and ABSA have begun distributing a hand-held credit and debit card payment system that uses wireless and encryption technologies. Distributed locally by Altech Card Solutions (ACS), the DECT payment system enables cardholders to process transactions without losing sight of their card.

ACS MD Derek Chaplin says the new system means restaurant bills can be paid at the table using the DECT portable handset."Chip-enabled card holders can process a transaction by swiping the credit or debit card and entering a PIN number," he explains. "For non-chip cards the DECT device will simply print a transaction slip for signature." Chaplin says the DECT device uses the latest radio frequency technology and can operate up to 200m from its base station. He says security is ensured by a cryptographic key exchange between handset and base.

Other:

: Paying movie tickets from your mobile - S. Africa

: Simplus launches mobile payment solution - S Africa

Korean Telcos agree on M-commerce interoperability

Korean Telco's SK Telecom, KTF and LG Telecom to launch a common mobile payment platform:

So far, the three operators have separately deployed such payment equipment at shops, restaurants and coffee shops, preventing some users from buying goods at particular stores. For instance, SK Telecom subscribers can't pay for their bills at a restaurant equipped with KTF's payment system.

Checking your account balances via Mobile – New Zealand

Sonic Mobile has developed a SMS service for the New Zealand Association of Credit Unions allowing customers to check their account balances from their mobile.