Mobile Payment Solutions – Globally and in Pakistan

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Nokia, Samsung and LG have recently joined hands with a number of operators from south east asia to embed a wireless payment system in their phones. (Read here)

With wireless payments, you would simply swipe your phone over a participating MasterCard machine and boom, pay your way across.

Great, so now when your phone is snatched, they get your money too?

Another interesting sentence from the article: “China Mobile… already support the common wireless chip format on the mobile phones
they distribute for their networks.
” Hmm….

It will be a while before mass electronic payments can be in place in Pakistan from cellphone networks (see my previous post on The Dot Puff)

Locally, a number of startups are trying to break through on micro-payments, which includes Ammana that was first to market with the idea, and Inov8, who are focusing on a mobile payment platform.

Both initially started out over a different technology medium, ammana envisioning web payment and inov8 distributing a credit-card machine for retailers, but it seems that both have moved into the mobile space with payments over SMS (Inov8 working with a Malaysian firm on the solution).

The SMS model provides more security than a chip-enabled solution.

Side Note: Despite Ammana being first to market with the idea, Inov8 was the one highlighted by PSEB in their recent industry profile presentation.

Added to this, the telecos themselves are moving into a position to become a threat: With “Balance Share” services in place, all the telecos would need to do is make their charge card a payment system for consumer goods, or alternatively allow retailers to cash back in on their charge cards. While that in itself may not be truly disruptive, but it might open up a floodgate of more interesting value-added-services on cellphones.

It seems clear that C2C payments could change the way a lot of things work in Pakistan, e.g. empowering micro-industries to take orders for delivery over the phone.

As I said before, the weakest link in enabling a micro-transaction enabled society is the pre-historic banking infrastructure, and the flow of electronic transactions through the State Bank.

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6 Comments

  • Osama,

    I happened to stumble onto this entry by accident a few days ago. Felt it necessary to point out a few things you might have been misinformed on by your source.

    Firstly, Inov8 Limited did not envision distributing a ‘credit card machine’ to retailers around the country. Saying that would be stealing the limelight from its state-of-the-art proprietary transaction management and processing engine that would run the devices. It wasn’t JUST a credit card machine. Infact the business model almost didn’t involve a ‘card present’ situation.

    And secondly, I mention the work ‘proprietary’ because Inov8 is not working with any firms (neither Malaysian nor any other) on any of its solutions. Typical to any Pakistani solution, it is bound to rouse immediate skepticism when I say Inov8 develops its solutions indigenously and in-house. It also proudly boasts an array of solutions that are currently being evaluated and considered for launch in other countries.

    I cannot disclose more on any of the solutions and what they entail at this time. Just thought it necessary to correct you when you mentioned a Malaysian firm working with Inov8. Inov8 is truly ‘Green’ and taking anything away from it would not be acceptable.

    Regards,
    Abbas Hayat
    Business Analyst, Inov8 Limited

  • Well, I wouldn’t call it proprietary if the solution involves using components from other vendors, which I know you guys were using until atleast before the dev teams were hired. — I wont reveal anything about it except to say that the solution had a terminal device that I’ve seen myself (similar to a CCard machine or Prepay machine) and a backend transaction system from a local vendor.

    That might just be a difference in defining proprietary — I know many people in Pakistan think “non-proprietary” means using a complete solution such as SAP and implementing it. However, I define a non-proprietary solution as one where more than 50% of the components are built from other vendors.

    If that is the case, I could say I have proprietary components / configurations of the solution, but not that I have a completely indigenous product / solution. Again these can just be semantics.

    Also, the last info I had about you guys you were looking to build a transaction bus for mobile networks built along with a Malaysian firm.

    Ofcourse, both of this I agree is somewhat out of date as this was before they hired a large software team — it’s good to know you guys are now ‘green’ and making waves with completely indigenous solutions.

    Keep it going.

  • Hello again.

    Since the information you quote is a little outdated, it’s possible you mistook one system for another. The entire transaction processing engine is 100% proprietary and has undergone independent audits to prove the same. There is no credit card machine / terminal associated with the system at this stage. What you may have seen (although I think it is highly unlikely that you did) was one of a hundred prototypes that we were trying out.

    We have always had a development team since the company was created. Yes, we’ve had turnover, but only as much as any other company in the business. Our core conception, R&D and Business Services teams have been solid for the last two years with the same people.

    That said, the only Malaysian encounter Inov8 had was earlier this year when our Group Head for Business Technology Services went to Langkawi for his honeymoon. :)

    And while we’re on the subject, please come visit us at Lahore next time you are in town. We’ll be glad to update you with new developments and where we stand so that your future postings are based on first-hand information rather than speculation and rumor.

  • G & W should realize the difference between M & E Commerce. Thanks

  • I am very glad to see these lovely and beautiful detail.

  • Great post..! :)
    This is really a nice blog with great posts, I would really like to keep reading here.

    Thanks for this nice article, valuable information for all and of course I will recommend my friends to read this for sure.

    -M0by G.

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