Consumers living in remote areas of the world now limited to closed mobile-wallet services soon may have access to wallets usable anywhere MasterCard is accepted.
MasterCard Worldwide and other charter partners in the MasterCard Mobile Money Partnership program are targeting financially underserved mobile-phone users in emerging markets in Asia, Africa, Eastern Europe and South America.
Financial terms of the partnership are not being disclosed.
The partnership is designed to produce an open-loop mobile-payment system for consumers who participate through their local telecommuncation vendor, Mung Ki Woo, MasterCard group head, mobile, tells PaymentsSource.
In areas with an undeveloped banking infrastructure–meaning few ATMs and bank branches and merchants that accept card payments–telcos and banks may deploy their own mobile-money services, Woo says. But they are closed-loop operations, and users can pay bills, top up mobile minutes or make person-to-person payments only within the telco’s network, he says.
As software partners in the new program, Comviva Technologies Ltd., Utiba Mobility Inc. and Sybase Inc., each of which has a strong presence in emerging markets, may expand the reach of those abilities to merchants who accept MasterCard.
System users can pay online and offline with their phone or by using a prepaid MasterCard loaded either via remittance or by person-to-person payment using Utiba’s digital-wallet platform.
The software partners will support telcos launching the open-loop program, Woo says. They are in discussions with telcos and banks regarding migration to the open-loop system, he says.
Telcos woulf build an agent network of physical locations affiliated with the program. Consumers then may add funds via the agent network.
The program’s goal for now is to have proofs of concept in the next three to six months, a Comviva spokesperson says tells PaymentsSource.
The three partner software providers will promote the program to telcos, which would promote the new utility of their mobile money accounts to their subscriber bases and potential customers.
The program offers a prepaid companion card the accountholder can use at merchants that accept MasterCard, virtual card accounts usable online with the user’s mobile money account, P2P payments between subscribers of two different mobile money services, and face-to-face or remote payments using mobile phones for goods and services at merchants that do not support point-of-sale acceptance of electronic payments.
India, for example, has 12 million merchants, but just half them have an electronic POS system, the Comviva spokesperson says.
“It’s a huge market which is not being tapped,” he says.
When a user participating in the service is ready to pay, the merchant would use his or her own phone to call a bank or telco and enter the consumer’s mobile number and transaction amount. The consumer would then enter a PIN on his phone when prompted to complete the transaction.
Richard Matotek, Utiba founder and CEO, tells PaymentsSource the service maps mobile phone numbers to cards and makes the mobile phone number the principal code for transactions within the network. Consumers may load the wallet by remittance at partner outlets or by person-to-person funds transfer, and they may use it for bill payments, transfers or purchases online and in stores.
MasterCard provides a virtual card number to Utiba wallet users for payment by phone, and a companion card drawing from the wallet for use in stores or online.
Demand is strong for P2P payments in emerging markets, and the open-loop system expands customer options, Matotek says. In a closed-loop P2P transaction, the receiver has to go to a brick-and-mortar location to get cash. In the partnership’s open-loop program, the pairing of a physical MasterCard with the mobile wallet means the receiver can use the card to spend the transferred funds because the card is linked to the wallet.
“(The physical card) is another way to get to the money you have in your wallet,” says Matotek.
Because the majority of funds transfers go from developed countries to undeveloped ones, the program eventually will target developing markets for adoption, says Jesus Luzardo, Utiba head of business development.
“Anybody can use (the program),” Luzardo says.
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