Sixty thousand Leeds (UK) consumers will put the world's first e-commerce cell phone through its paces from April '99 in a trial which will pave the way for mobile commerce delivery before 2000. Key to the e-commerce feature of this smart new cell phone is groundbreaking technology from Cape Town based e-commerce software developer, Mosaic Software.
Johann Dreyer, joint CEO of Mosaic, says: "The e-cash facility of this phone, produced by global partners De La Rue, Motorola and Logica, is enabled by Mosaic software. Our technology has been well received internationally and, when the phone landed the Financial Times Global Telecommunications Award in December '98, it was credited with turning mobile commerce into a reality. At the beginning of March, it also won the Advanced Card Award for 'Best Communication Application' in London."
Run by Barclaycard, the card division of Barclays Bank, in conjunction with the UK's largest cellular network provider Cellnet, the trial will see participants downloading e-cash over Cellnet's GSM network on to their Barclaycards by inserting it into the new range of MotorolaStarTAC mobile phones. As with normal cash dispensers, users will be prompted to enter the 'withdrawals' required as well as a bank PIN for security.
Using their mobile commerce phones, customers will be able to check credit card details, make bill payments and download e-cash 24-hours a day on re-issued credit or debit cards or on to separate e-cash cards. These cards, provided by VISA, will feature an embedded computer chip that will be able to store up to lb50 (approximately R500) worth of cash electronically. This will render the card ideal for the purchase of low value goods where traditional plastic cards are not accepted, for example in fast food outlets or convenience stores. Dreyer says: "While a number of countries have dabbled in e-cash in the past, this initiative is a serious attempt with significant global players like VISA, Barclays, Cellnet and Motorola."
The Leeds mobile commerce trial is the first of its type in the world and predictions on how this technology will fare in South Africa are particularly difficult. Dreyer does, however, offer the following views: "The successful deployment of e-cash would require local merchants to embrace the concept and provide facilities in-store. In Leeds, for example, 1 400 outlets currently accept e-cash, including McDonalds, Kentucky Fried Chicken and the Leeds city council car parks.
Such wide-scale acceptance could take time in SA. However, SA consumers may drive the move towards e-cash and specifically mobile commerce, if not for reasons of convenience, then for its security benefits. Importantly, while there are only about 8 000 fixed ATMs in SA today, we have over 3 million cell phone users - a figure that continues to grow. In my view, these people are all carrying potential ATMs with them already. Provided e-cash is made extremely convenient through applications like mobile commerce, I believe that, over time, it is well positioned for success in the local market."
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Mosaic Software
Mosaic Software forms part of Comparex Holdings and is a cutting edge provider of electronic funds transfer software (EFT) for consumer generated payment transactions. Special emphasis is placed on the delivery of EFT solutions for Internet banking and Internet commerce and all the company's products form part of Mosaic Software's Postilion range. Created from the merger of two Cape Town IT companies in 1994, Mosaic is based in South Africa with significant and fast growing global interests.
Today international markets contribute nearly 70% of the company's turnover and offices are run from Cape Town, London and Fort Lauderdale. Mosaic Software is entrenched in the financial services industry and its EFT solutions drive operations in a large number of multinational companies and industry leaders around the globe. Internationally Postilion is central to services provided by Card Clear (UK), Calypso (USA), Visa Argentina and Royal & Sun Alliance (UK). Local clients include retailers Pick`nPay and Edgars and banks ABSA, Saambou Bank and NBS.
About Motorola
Motorola is a global leader in advanced electronic systems and services. It liberates the power of technology by creating software-enhanced products that provide integrated customer solutions and Internet access via wireless and satellite communications, as well as computing, networking, and automotive electronics. Motorola also provides essential digital building blocks in the form of embedded semiconductors, control and systems. Sales in 1997 were $29.8 billion.
Cellnet / Barclaycard Partnership
Cellnet and Barclaycard have worked together since 1995 to provide their customers with a unique range of cell phone banking services and cheaper cell phone calls. At launch Barclaycard / Cellnet customers were able to get 24-hour access to statement enquiries, credit limit increases and payment of bills. Since 1997, following major technological advances, customers have been able to view Barclaycard and Barclays Bank account details like mini-statements, credit card limits, balances and next payment dates on their cell phone display. These services and benefits are available over customised handsets available from Barclaycard.
Visa Cash Trial in Leeds
Over 1,400 outlets in Leeds currently accept Visa Cash including McDonalds, Kentucky Fried Chicken, Superdrug, WH Smith, and local NCP and Leeds City Council Car Parks. E-cash can be loaded at special loading machines situated in and around Leeds. Visa Cash is a relatively new payment method that can either be added to re-issued credit and debit cards such as Barclaycard and Barclays Connect or can be issued as a separate card. It has been designed to pay for low value goods and services, typically those bought using loose change. This could be a newspaper, a chocolate bar or a car parking space.
Cardholders simply need to load the card before use by transferring money from either their current or credit card account via special load devices such as the new cell phone. They are then free to spend using their 'cash'. There is no charge for using this facility, and for the first time Barclaycard is able to offer a Visa Certified secure transaction across a GSM network. The phone encrypts the information being sent across Cellnet's network using a secret code (key) only Barclaycard will be able to decrypt the message.
The concept of stored value has been in existence for many years as a solution to the problems associated with cash handling. Even now, with automated payments, cheques, credit cards and debit cards being used in increasing numbers, the 1998 APACs Payments Market Report shows that cash still accounts for 46 per cent of transactions made in the UK. lb454 million of coin is used weekly in making low value purchases with retailers giving out over lb446 million of coin per week in change.
Logica
Logica is a key player in the development of the mobile commerce market. Together with Cellnet it founded the Global Mobile Commerce Forum (GMCF) in November 1997. By integrating enhanced messaging, customer relationship solutions, improved transaction processing and end-to-end security, Logica has created the market leading m-Commerce tm. v3.1 server. Based on Postillion from Mosaic the server supports a range of electronic functions. Logica has 8 000 staff in 23 countries worldwide. For the financial year ending 30 June 1998, Logica's pre-tax profits were lb41.8 million on a turnover of lb473 million.
De La Rue
De La Rue Card Systems, part of the De La Rue, the 'cash to cards' group whose 1997 revenues were lb790.2 million, is the No.1 supplier of VISA and MasterCard products worldwide. A leading provider of smart card solutions to customers in banking, telecoms, loyalty, transport and health, Pay TV and identification, De La Rue's vision is "that by 2005, 10% of the world's population will possess a De La Rue smart card." Coupling its heritage in banking and security with its expertise in technology innovation, De La Rue is delivering solutions today for electronic and mobile commerce applications. De La Rue is committed to open standards and supports Microsoft Windows card, Java card and MULTOS
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