Cellphones become money machines

By ADAM GIFFORD

Auckland company ePOC Systems has unveiled a way of using mobile telephones for a universal electronic payment system.

Managing director Robert Daggar said the system, $afePayment, was a an alternative to cheques and credit or debit cards.

As $afePayment is designed to run on GSM mobile phone networks, Mr Daggar is talking to Vodafone about taking part in the system.

He is also talking to companies offering ASP (application service provider) services who can host $afePayment.

"Even though we don't need to, we've also decided to ask the banks to participate," he said.

"We don't think we're competing directly, because we're offering functionality which is not available in the marketplace today.

"The one area we might compete would be in bill payments, but our philosophy is the banks are there to provide financial instruments, not to do transaction processing."

$afePayment was developed with SIM (subscriber identification module) Tool Kit - software development tools such as contact lists and messaging required to make the applications on a mobile phone.

When customers join $afePayment, they will load the software on to their phone's SIM chip, specifying which bank accounts money can come from.

They can also enter information about payment details for frequently paid bills, such as power or phone accounts.

When they want to make a payment, they will access the application with a password, feed in the amount and a payee code - which may be as simple as a phone number or a GST number - and a PIN.

The phone generates a unique, one-time 20-digit number off-line that works as an approval code and PIN transporter to $afePayment.

A merchant receiving a payment through the system will forward the number to a central clearing house by voice system, phone, fax, internet, mail or e-mail for immediate processing.

"We take that one-time number, prove you authorised payment and process it," Mr Daggar said.

"We extract the PIN, convert it to an Eftpos PIN and effect the Eftpos transaction."

$afePayment would be a layer above the banks. "We're nothing more than a merchant, taking your payment and providing a service to you."

$afePayment is not intended to replace all Eftpos card transactions, but it will be suitable for a wide range of electronic commerce. Payments can be made by voice systems, phone, fax, internet, mail or e-mail.

$afePayment allows users to queue payments, arrange for payments to be made from multiple accounts and pay on specified dates.

The idea came to Mr Daggar when he was working in the United States.

"I was looking for a cheque alternative and had a dream one night in which all the numbers came flying off the cheque.

"This idea led ePOC Systems to creating a guaranteed settlement scheme, based on existing real-time authorisation processes to avoid any system changes."

Development has been paid for by the directors of ePOC, with a small contribution from the Foundation for Research, Science and Technology for a feasibility study.

ePOC Systems' parent company, Electronic Ticketing, provides smart card, electronic ID and tag systems.