Total System Services Inc. plans to use mobile phones to gain a larger foothold in micropayments, Ashim Banerjee, the U.S.-based transaction processor’s chief information officer for TSYS Acquiring Solutions, tells PaymentsSource.
The processor handles some 5 billion transactions per year, about 20% of which are micropayments of no more than $10. The average transaction is about $80, he says.
“We want to wade deeper into [the micropayments] space,” Banerjee says.
To do so, TSYS late in the first quarter plans to introduce a service that enables micropayments through smartphones containing a downloaded payment application. The TSYS service, however, would enable users to transfer noncash currency such as card-loyalty points “or other unconventional sources of funding yet to be mentioned” to other consumers or to merchants who agree to accept them, Banerjee says.
“Issuers of points are very keen that you use your points,” he says. “They are not interested in letting points last.”
In introducing the service, TSYS will focus “on smaller cities, primarily college towns [with] a few thousand merchants,” Banerjee says. Ideally, the service would enroll 80% of the merchants in a given location, he adds. Merchants would need to upgrade their payment terminals with new software but would not need to buy new card readers.
