Euronet Worldwide Inc. and financial services software partner Wipit Inc. are hoping to convert cash-paying consumers into “wipit” accountholders with a free mobile-payment application they plan to launch in the fourth quarter.
They designed the app to work with Apple Inc. iPhones and smartphones backed by Google Inc.’s Android operating system.
“The primary use of a wipit mobile-payment account will be to conduct mobile e-commerce because we believe this is a purchasing medium that is going to experience incredible growth,” Vicki Reents, a spokesperson for Leawood, Kan.-based Euronet, tells PaymentsSource.
Interested consumers would set up wipit accounts by downloading the mobile application to their phones or by signing up on the Wipit website. They then would use the website’s store locator to find a retailer that uses Euronet’s payment gateway to add funds to their account, Reents adds.
The Euronet-enabled brick-and-mortar sites would serve only as deposit locations. Merchants selling goods online would have to create a wipit account and integrate the application into their websites or mobile-commerce application, a process that takes less than 20 minutes, Reents says.
When the service is fully operational, a customer visiting one of thousands of retail locations using a Euronet system across the country, such as convenience stores or gas stations, would give cash to a clerk to reload the wipit account, or they could use a debit or credit card to do so, Reents adds, noting Euronet and Wipit created the service with the cash-using customer in mind. The merchant at a reload site receives a $2.50 fee from the consumer at the time of the deposit, she says.
“The funds are not transferred from a bank [personal savings] account at this time,” Reents says. “We’re focused on a specific consumer segment of the cash-preferred, or the underbanked or unbanked.”
Wipit accounts will be supported in both English and Spanish languages, Reents says.
Merchants pay no setup or maintenance fees, but they do pay 30 cents per transaction plus a percentage of the sale. On average, merchants would pay Euronet and Wipit between $2.50 and $3.20 on a $100 sale, according to the Wipit website.
Kevin Caponecchi, Euronet president, contends the service provides an important new application for smartphone users.
“Prepaid gift cards and credit cards do not address all the needs of the smartphone application user,” Caponecchi said in a company press release. “Cash-preferred consumers need more flexibility and convenience in their mobile-payment options, and wipit addresses those needs.”
The project involves Euronet’s epay prepaid card and Ria Financial Services divisions, along with its partnership with Lake Forest, Calif.-based Wipit, which focuses on cash-preferred customers, the company stated in the release.
The timing to introduce a mobile-payment service may be good, but getting retail merchants on board can be difficult, one observer believes.
“A big issue moving forward for these companies is acceptance of the technology, specifically as to where it will be available to use,” Patricia A. Sahm, managing director at Auriemma Consulting Group, tells PaymentsSource.
But in general, paying for products by phone, whether through cash or by credit card, will grow dramatically in the coming years, Sahm says.
“People will freely walk down the street with their phones out, but they will not do that with a wallet or credit card flashing in their hand,” Sahm notes. “That is why these payments companies are always looking for ways people can interact with retailers with their phones.”
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