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Net1 moves into Mexico

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 16 Aug 2011

Dual-listed Net1 UEPS has inked a deal with a Citigroup subsidiary to provide mobile virtual card technology in Mexico, expanding its presence in South America.

The company, listed on the Nasdaq exchange and the JSE, already operates in numerous countries, including several in Africa as well as Iraq, Ukraine, Colombia, Vietnam, Uzbekistan, Russia, Oman, India, Moldova, Mongolia, the US and the Republic of South Korea.

It has been battling, and reported a net loss for the three quarters to March of $4.2 million compared with net income of $56 million in the previous year, despite revenue growth. The company explained at the time that it had lost a large customer and faced start-up costs in some of its operations.

Yesterday, it announced it had inked a deal with Banamex, a Mexico-based bank, to provide mobile virtual card technologies. The contract was signed through its wholly-owned subsidiary in Austria, Net1 Universal Technologies.

Net1 provides a Universal Electronic Payment System, or UEPS, to facilitate biometrically-secure real-time electronic transaction processing to unbanked and under-banked populations of developing economies around the world, in an online or offline environment.

Virtual pins

The listed company will provide VCpayTrade Mark, which is designed for card-not-present (CNP) transactions to the Mexican bank. Banamex will offer VCpayTrade Mark to its customers as an application that can be downloaded to a mobile phone and linked to the customer's credit or debit card accounts.

Banamex was founded in 1884 and has more than 1 696 branches and 5 869 ATMs. It is part of Citigroup, which has 200 million account holders in more than 100 countries.

VCpayTrade Mark allows consumers to securely generate an offline, one-time-use mobile virtual card (MVC) number for a specific limit or purchase amount on their mobile handsets, to buy goods and services or pay bills in any CNP environment.

Net1 explains MVCs are used in the same way as traditional plastic credit or debit cards, except that, as soon as the transaction is authorised by the issuer, the generated card number expires.

MVCs provide an advanced form of security, as they cannot be skimmed, phished, tapped, cloned, replayed or modified.

CEO and chairman Serge Belamant says the “offline nature of MVC ensures that virtual cards can be generated anywhere and anytime, regardless of network coverage or availability”.

Belamant explains the tool will “also open many new opportunities between the US and Mexico, specifically in the money remittance and bill payment areas”.

Related story:
Net1 slumps on customer loss

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