Zumogo, ProPay Inc.’s new social-media payment tool for mobile phones, leaves out vital information that ProPay says some competitors leave in.
By not storing payment card numbers in the application loaded into Apple Inc. iPhones, the ISO eliminates the potential risk of exposing the information if phones are lost or stolen, says Chris Mark, ProPay executive vice president of data security and compliance.
“If it’s not on the phone, it can’t be stolen,” Mark tells ISO&Agent Weekly.
Lehi, Utah-based ProPay released Zumogo on Feb. 3. The app also is available for phones using Google Inc.’s Android operating system, and ProPay says it will release a version for phones using Microsoft Corp.’s Windows 7 by March 31.
Zumogo customers enter their payment card information during the enrollment process using the app, but a secure ProPay server stores the card number, not the phone, Mark says. The app generates a unique token used to complete a purchase, but not before the consumer has authenticated the transaction from within Zumogo, he says.
“There are a number of [product offerings] where the data is stored on the phone, secured by an app,” Mark says. “We feel removing the data is the best advice.”
Interactive Value
Cardholders control their interaction with Zumogo merchants, he says. “The consumer initiates the discussion with merchants,” Mark says. “The consumer has the opt-in, opt-out control.”
Once launched, the Zumogo app searches for participating merchants in a radius chosen by the consumer. Area merchants then can send in-app messages about coupons and other incentives to entice participants to shop at their stores, Mark says.
The value for merchants is the ability to communicate with prospective customers, advertise specials and, in the case of restaurants, potentially increase the rate of turnover at tables, he says.
The app is designed to help merchants increase their revenue potential, Mark says. ProPay chose restaurants as the first merchant type because choosing a place to eat is a social experience for many consumers, who also tend to respond to dining incentives, he says.
Consumers may be reassured by an app like Zumogo, Adil Moussa, an analyst at Boston-based Aite Group LLC, tells ISO&Agent Weekly.
“The fact that a consumer doesn’t have to worry about their data is very reassuring,” Moussa says. “But more importantly, the ability of the merchant to communicate directly with the consumer is even more powerful. There were applications like this one on the market for a few years but they didn’t
include the payment option. Now it seems like all the bases are covered.”
Many merchants, however, will have questions about how much Zumogo will cost them.
ProPay is evaluating several pricing models, Mark says.
One is to charge merchants a small monthly fee for the ability to advertise Zumogo acceptance and a processing fee, he says, declining to divulge additional details.
Merchants do not have to switch to ProPay for their payment processing to accept Zumogo transactions, Mark says.
ProPay also is evaluating distribution models and is open to talking with other companies to sell the service, Mark says. “We’re evaluating all options,” he says.
