Contactless technology firm
ViVOtech sees smart mobile devices as the future of point-of-sale
payments. Robin Arnfield talks to ViVOtech president and founder
Mohammad Khan about his plans for the future and the company’s
recent trials with near-field communication technology around the
globe.
Go deeper with GlobalData
ViVOtech develops
software and hardware that turn mobile phones into payment devices.
Its software enables consumers to download applications including
payment card credentials, retail loyalty points, and e-vouchers
over-the-air (OTA) via SMS to mobile wallets stored on their
handset. They can then make purchases and redeem rewards points and
e-vouchers over near-field communication (NFC) contactless links to
NFC-enabled card readers.
ViVOtech president and founder
Mohammad Khan says the Santa Clara, California-based company has
shipped over 800,000 of its ViVOpay NFC readers in 35 countries.
The ViVOtech terminals are able to accept payments by contactless
cards and key fobs as well as NFC-enabled mobile devices.
“We have 75% of the total installed
base of NCF readers worldwide,” Khan says. “We have supplied our
m-wallet, OTA application provisioning, and mobile marketing and
loyalty software to over 30 NFC payment trials around the world
since 2007.
ViVOtech develops application
platforms to enable shoppers to use their smartphone either near or
inside a store to view product promotions and marketing
information.
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By GlobalData“They can wave their phone against
a touchpoint such as a poster to receive information about the
products they are interested in buying, for example pricing or
product reviews,” Khan says.
“This makes shopping a much more
convenient and efficient experience, as consumers don’t need to
search for shop assistants to answer their questions.”
Alliances
Khan founded ViVOtech, which is
privately-held with backing from investors such as Citigroup, First
Data and Nokia, in 2001.
“I previously spent 15 years at US
payments terminal vendor VeriFone and was very involved in the
drive to make mag-stripe cards the dominant payment medium,” he
says. “In 2001, I realised that the future of the payments industry
was mobile, since attempts to roll out smart cards in the US had
failed.”
Khan says ViVOtech has developed a
mobile ecosystem that links up mobile network operators (MNOs),
card issuers, and retailers through NFC technology.
“ViVOtech is 100% focused on the
physical merchant space, not on remote wireless payments,” he
says.
Khan says remote mobile payments,
in which consumers use either SMS text messaging or the mobile
internet to make purchases, has proved too cumbersome to win mass
adoption.
ViVOtech has alliances with
VeriFone; handset vendors such as Nokia and Motorola; Citigroup;
ATM and retail technology vendor NCR; US telco Sprint; First Data;
and mobile banking and payments firm Monitise, which in December
2010 agreed to promote ViVOtech’s m-wallet software to its US bank
customers.
Pilots
Randy Vanderhoof, executive
director of the Smart Card Alliance, a US-based industry
association, says the NFC pilots ViVOtech and its partners have
been involved in are moving rapidly towards commercial
deployments.
“The future looks promising,” he
says.
So far, the biggest NFC trial
worldwide is the pilot that was launched in Bangalore, India in
July 2009 (see EPI 273). ViVOtech provided NFC software
and contactless readers for the pilot, which involved 3,141
Citibank India customers and 250 merchant locations including
department stores, food courts at shopping malls, fast food chains,
and cinemas.
During the 26-week pilot, Nokia
NFC-enabled cellphones supplied by Vodafone were used to make
43,527 contactless credit card purchases totalling INR26.04m
($573,700).
In a March 2010 report Edgar, Dunn
& Company (EDC) directors Samee Zafar and Pascal Burg wrote
that the Bangalore trial was a “significant success.”
Zafar and Burger highlighted the
fact that, because demand for NFC phones outstripped supply,
customers had to put down their names on a waiting list to
participate in the project. Also, customers displayed positive
interest in NFC technology, making active use of their NFC phones
for purchases.
Based on a comparison of
transaction activity by participants and non-participants both
before and during the trial, EDC says “participants registered very
high growth rates in overall credit card transaction activity
compared to non-participants”.
Since 2008, ViVOtech readers have
been used to top up Libercard contactless transit cards in the
Brazilian city of Fortaleza, and to enable these prepaid cards to
be used for retail purchases.
“Libercard has issued 600,000
contactless cards which can be used both for transit and retail
payments, and 1,500 ViVOtech-supplied terminals in Fortaleza are
able to accept and re-charge Libercard cards,” Khan says.
“Libercard plans to convert its
entire customer base of 1.5m contactless [single-purpose] transit
cards to dual-purpose cards by the end of 2011.”
Libercard’s dual-purpose retail and
transit contactless card scheme has been in commercial mode since
mid-2009.
“The cards are very widely used in Fortaleza,” Khan says.
