The Green Sheet Online Edition
January 12, 2009 • Issue 09:01:01
Going boldly into m-commerce
In November 2008, prepaid processor eCommLink Inc. signed a strategic alliance with mobile money expert Monitise Americas LLC - a move both companies expect will position them to capitalize on the rising wave of mobile commerce.
Monitise reportedly gives eCommLink global access to prepaid users through the wireless networks Monitise operates and the mobile banking and payments software it has incorporated into millions of mobile handheld devices. And eCommLink provides Monitise another distribution channel.
Lisa Stanton, Chief Executive Officer at Monitise, called the alliance "a perfect union" between the prepaid and mobile commerce worlds. "The prepaid market from our perspective is one of the best suited for mobility in terms of having 24/7 access to information like balances, etcetera," she said.
Stanton added the alliance will help push mobile banking to the next level - into mobile payments. "Mobile banking is sort of a first step, we believe, along the path to doing what many call m-commerce," she said. "So first we start with providing information, and then we find ways to create value to the new payment opportunities via the mobile device."
The extra value lies in the alternative payment capabilities of prepaid cards, which can include payroll, travel and general spending.
T. Jack Williams, CEO of eCommLink, said the combination of mobile phones and prepaid cards provides a strong value proposition for travelers. "You can be traveling anywhere in the world," Williams said. "You have one of our cards in your pocket and you only put on the card what you need right then. But then you need more money. All you have to do is pull out your cell phone, pull up your Monitize application, go bang-bang-bang-bang-bang: the transfer is done."
According to Williams, the transfer would take 10 seconds domestically and about 30 seconds internationally.
Tying prepaid cards to mobile phones delivers m-commerce in its "truest sense," Williams said. "So you can do a balance inquiry, do a transaction history request, and you can ... move money onto the card, move money off of the card, pay bills or whatever."
Williams added that consumers with existing payroll cards will be able to easily link cards to mobile phones equipped with Monitise's application. Basic card information entered into the Monitise interface takes banking functions cardholders could only access through Internet connections into the mobile arena.
Another huge market Williams mentioned for mobile prepaid is international remittance. Cell phone use cuts across all borders and just about all socioeconomic groups worldwide. Since the mobile technology infrastructure is already in place, the global workforce is primed to utilize prepaid to send money home.
"When you look at the Tropic of Cancer, Tropic of Capricorn and most of the countries in those areas, their biggest export are their people to work in other countries," Williams said.
The Philippines, for example, has 20 million citizens working around the world, Williams remarked. "We're talking about the international unbanked," he said.
"Even though they may have a bank account in the Philippines, it's still very difficult if you're not working there; it's still very expensive to go into a Western Union, pay $19.95 plus 2 percent to move money to your bank account in the Philippines.
"But you can do an SMS [short message service] text message, and we can do it for a $1 or $1.50. ... So if you're going to send money to your parents in the Philippines and you're working in the United States, now you can use your phone to do that."
Riding the wave
Williams and Stanton believe the future is golden for mobile prepaid. Its role in supplying the unbanked and underbanked populations domestically and globally with an alternative banking tool will only grow in importance if the U.S. and world economies worsen, they predict.
As more people are denied credit and bank accounts are too expensive to maintain, consumers will migrate to prepaid cards used in conjunction with their mobile phones to reduce costs and remain viable in the commercial electronic world. The alliance between eCommLink and Monitise is poised to take advantage of that trend.
"The widely shared belief is that mobile commerce will dramatically increase the volume of transactions that run over the networks, sort of disintermediating cash and check usage," Stanton said.
"And this is an opportunity for merchants and merchant processors to be the next wave in the evolution of payments."
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