How to build the worst payment system in 10 steps! [Part2]

How to build the worst payment system in 10 steps!Building a reliable and robust mobile payment system is always a challenge,it requires good analysis from business, marketing and technical teams together to deliver a simple, secure and convenient system to the end users. On the other side there are some trivial mistakes some people do, and this quick guide list some hints to help you to avoid making such mistakes unless your target is to build a system to fail!

This article is Part2 and you are advised to check Part1 to get a clear idea on how the article is listed.

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Mobile Payment, Apple pay Et tu, Brute?

Few days ago the giant smart phone manufacturer Apple announced its new payment product ‘Apple pay’ and finally iPhone will come with NFC port in a step that all the world identified as very late step from Apple side!

Apply pay

Apart form the new introduced techniques, the added security value and the new payment experience, the announced product did not add any new value or proposition to the mobile payment industry.


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Mobile payment, the dark side of the moon!

In our recent post Saving the titanic we went through possible benefits of mobile payment and its capabilities and tracking options of this new revolutionary services. It was not possible to go through such capabilities without touching the most critical term Privacy!

Mobile payment, privacyCurrently digitizing consumer life is always suspected and accused, with multiple cases and news about privacy hacking and the endless arguments if this is ethical or not, legal or not, you might refer to the recent announced news about Google via this link for a story about an internet user arrested due to illegal email contents.


Back to mobile payment, in a typical crime investigation you might be suspected and you will discover that the mini store you stopped by to buy a coke can was actually a hidden drug dealer.

Such obsesses will be doubled and might be a real showstopper for some set of customers, and it will increase wherever political or terrorism issues exists. In some cases shopping anonymously is a real need and its absence might block possible sales targets. You may now realize how Bitcoin and similar digital currencies found their way in.

To overcome this financial institutions, banks, MNO or even vendors must ensure that they are legally authorized and entitled for such financial services, and a preset agreement with regulators and government not to disclose customer information without certain approvals.

On the other side the service provider must state clearly in their contract under what circumstances they will release the customer data, another factor is the information sharing with 3rd parties. It sounds interesting to see an offer on a new mobile device dedicated for me as I was paying for the repair shop last week. But it also means I’m hacked and I’m fully monitored on the go!

This is not simple as social media sites situation, in social media I’m submitting my data and risk my privacy on my own and I’m still able to control what to be shared, but for payment I have no alternatives to pay for the coffee or maintenance.

Vendors must pay attention to this up rising risk, and it will not make sense to hand such controls over to the customer to decide when he will use his mobile wallet and when to go with cash as it will work against the mobile payment concept!

Very complicated indeed, and going through alternatives needs a separate article to carry on!

Khaled Sayed

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Continue reading “Mobile payment, the dark side of the moon!”

Mobile Payment; NFC, Why? and Why not?! [2 of 2]

In the previous article we went through the NFC and the need behind this technology, we have reached a conclusion that the data transmission technology is one of the major challenges vendors and wallet issuers are trying to surpass to allow Mobile payments to boom and start taking some of the payment cards share.

Mobile payment NFCNFC is one of the possible solutions that might help, but still there are some challenges delays the new technology expansion.

We will try to list the major challenges NFC is fighting against in the blue few bullets to be as an indicator for your weather to launch or postpone your upcoming NFC products.

Feature mobiles,

It’s a fact that NFC is made only for elected segment of smart phones, not even a generic technology for all manufactured phones, and it’s a fact that the famous Nokia 3310 will never support this advanced technology!

Still it needs more time and pressure on handset vendors to adopt NFC antenna by default, and you have to understand that your solution will only work with limited number of devices. The more time you can wait the more customers you may gain, otherwise it will end up with an annoying sign (Samsung Galaxy 3, 4 and 5 only supported!).

And even smart phones,

From each smart phone brand still only a series or two comes with NFC support, and again some famous brands like iPhone has not implemented this technology yet – that iPhone 6 might support NFC- and again you still have limited coverage and penetration issue.

The wallet solution,

Each mobile wallet system has its own processes, interfaces and APIs. While account number is mandatory for a certain wallet system to process a new payment order, it might be unnecessary or even not considered at all in another solution from a different vendor. It means that a mobile APP for solution A will not transmit the same information submitted from another mobile APP developed for solution B.

Back to the POS,

With respect to the previous point you may think how a single POS may support multiple wallet vendors, and you have to consider that mobile payment must be a cross-border service, where you should not limit your design to only the local vendors in your country, you still need to consider other international wallet roamers that will appear on your system from time to time trying to submit payment orders using your platform.


In a final conclusion, NFC is a channel of communication with a proven security and maturity specifications. But still it needs more support and push from vendors and mobile manufacturers to boom.

Worth mentioning that NFC as a contact-less payment features is not limited or restricted to mobile operators or mobile wallet vendors. The exiting card players are also investing in this track trying to upgrade their payment systems to be more interactive and enrich it with extra digital and fancy options.

Is NFC the real future or a dead technology? As you may noticed its very hard to answer this question with a sharp and clear answer. We still need to wait and see what the future is holding for this long debate and I’m sure we will be surprised at the end!

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Mobile Payment; NFC, Why? and Why not?! [1 of 2]

NFC is one of the hottest topics in payment, you will notice this hot topic wherever there is a discussion related to mobile payment and you will many arguments about NFC as the future while others confirms that NFC is a dead technology.

Mobile payment NFCIn this article we will go through NFC and its related challenges, at the end of this article the same question will remain unanswered, Is NFC coming or passing away? There is no final answer and the debates will carry on.

What is NFC?

Apart from the technical definition you may check here, I will try to simplify it with a direct need example so you will have an idea about the NFC benefits and why there is a lot of debates around it.

In my own pocket wallet I have many cards Credit Card, Debit Card, Medical care Card, Kids zone Card and Club access Card. All cards has the same width, height, thickness and the most important is the magnetic strip bar. This magnetic bar exists with the same measures and the same exact location regardless the card manufacturer or purpose, which make it easy to a typical POS machine to read it and transfer the stored information which might differ from a card to another (Account number, Balance, Last access, Name … etc.).

It is just a matter of which information the manufacturer previously saved, and the POS software is developed to read to transfer it to the back end system for final processing and handling, before displaying the friendly message ‘Transaction Completed’.

Why NFC?

Now let’s try to relate the above traditional card payment process to the mobile payment industry, how do you imagine the mobile payment POS? Should it fit the iPhone size? iPhone 3, 4, 5 or 6.

How about Samsung devices? How it could fit Galaxy or Note devices at the same time? Should we think about other Samsung brands like Mega, Ace and Y … and how may we ensure it will fit HTC, Black berry or Nokia devices?!


Ok let’s forget about designing a POS based on shape or size and think about other technology like Bluetooth as example. Bluetooth is a good option but there are some draw backs too.

  • iPhone does not support all Bluetooth functionality like android or Nokia
  • On other side Bluetooth has a wide coverage range and could be spammed, you must passed through this horrible experience with an unknown device trying to send you files forcing you to set your Bluetooth off
  • It takes a time to setup
  • And some more … [Click here for extra information]

The need,

There is real need to find a way to transfer the payment data from mobile to the merchant awaiting device. Vendors and payment processors are trying to look for a standard way to transfer the payment data from the mobile device to the POS machine.

The need behind this is to support the retails and stores daily payments without the need to use multiple POS machines and with a unified payment experience. A typical user must follow the same steps regardless his mobile type or wallet issuer.

In Part2 we will explore the NFC opportunities and challenges so please stay tuned!

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Mobile Payment, Cash-In the passion fruit! [Last-Part 3]

In our previous articles “Cash-In the passion fruit [Part1] and [Part2]” we went through the Cash-In process and its impact on the mobile payment system.

Mobile payment Cash InAlso explored the different and possible scenarios and solutions you might follow to enhance your Cash-In process and drive your business to success and expand your customer base.

In conclusion, I can see that connecting your wallet solution to continued fund sources like linking your wallet to the customer bank or payroll account, your customer will suffer to refill his wallet each time. Customer will focus more on exploring your services and use it as the primary payment option. Please visit part one and two for more details “Cash-In the passion fruit [Part1] and [Part2]”.

Below should be a guideline to help you building your payment solution.


  • Ensure to offer rich and convenient interface, mobile APP, web site, USSD, SMS, IVR, WAP site and so on
  • Selecting channels should differ from a region to another, many factors should be taken in consideration starting from the connectivity, the handset level, smart phone penetrations, population and many more
  • In general you may use two or three channels not more so you will have less confusion in your upgrades
  • Maintain the same experience if you will launch with more than one channel, and in your planned upgrades, it is a must to deliver the same upgrades across all channels all at a time
  • DO NOT allow full service functionality through Web or WAP interfaces. Enabling the internet solutions with all options will distract your customers, double your security and fraud risks and waive you from your main focus which is the mobile itself

Balances and silent customers,

  • Your main target is to increase the money flow. Resident balances or silent accounts should be your biggest nightmare
  • Never think about offering interests to your customers, this will not help you a step. Please refer to previous point
  • Your potential revenue and profit needs thousands transactions per day, therefore you have to focus on the money movement process and acquire new service regularly
  • Having a customer with 1M USD balance should not be a good sign at all, having a customer with 1M transaction is much more profitable for you
  • Adapt your wallet recycling policy for silent accounts to match the average customer behavior, it should not be so long to allow you doing the data cleansing and archiving process and not too short to a level frustrating your customers


  • Lower your fees to the lowest possible limits and keep some roam for promotions from time to time to increase the traffic
  • always look for new services to offer your customer, and always work on enhancing your service flows. An ideal service request should not take more than 5 seconds in average
  • You need to run multiple customer surveys and track the Cash-Out process to find out which service is missing in your service portfolio to be added to lower the Cash-Out transaction up to Zero if possible


  • History, analysis, reports and graphs. Think about offering 1+ years of historical data per user and setup top saving, top spending and other useful analysis to help your customers to control their spending and also tie them to your service
  • Customers likes to keep track of their spending, and they always prefer to have a social and rich reports will convenience the customer to pass all his financial transactions through your system to see all spending in a single report
  • Setup reminder for recurrent payments like Gas or Electricity bill and allow one step payment for such services
  • Allow manual entry to the financial report, where customer may enter extra spending to be accumulated in his monthly reports (i.e 10$ for Fancy book) this will be very welcomed from the customers and will allow you to see what should be your next integrated service

Finally, you have to pay attention to the Cash-In process and consider the process your customers will go through each time they need to refill their wallets and make sure that it s easy, fast and convenient.

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Mobile Payment, Cash-In the passion fruit! [Part 2]

In the previous part , we went through the Cash-In process and it’s big impact on the mobile money service.


Mobile payment Cash InAlso discussed The payment logical filter, and proposed the first alternative to enhance your Cash-In process by offering a unique service that can’t be purchased using Credit cards or Cash, now I will carry on directly and proceed with the other possible alternatives.

 2- Promotions, Promotions and More Promotions!

One of the possible tricks to convenience the customer to use mobile wallet as payment method rather than traditional Credit Card or Cash, is to offer them a promotion, may be a certain discount or extra loyalty points. also the possibility to enter withdrawals and win some physical gifts or maybe they will be rewarded with some extra wallet balance to enforce them loop in the loop again, which should be considered as the optimum promotion style, as you will be trying to tie customer to your wallet more.

However this should work but it will not last, the sooner your promotion ends customers will slowly revert back to their traditional payment option, as Cash-In pain will come up again and the Logical filter test will miserably fail.

going with this option only works if you are really desperate concerning acquiring or attracting customers, but still you can go with this critical solution if you have professional sales and marketing teams, with communication and hot deals you may convenience your connected merchants to sponsor those promotions. This should attract customers and waive the added-on fees to the merchants side and grant you a good profit margin.

3- Pay it later!

Another approach is to allow customers to purchase via wallet with on credit option, this will generate you more traffic especially if your KYC bar is low. On the other hand this approach will dramatically increase the project risk factor.

You will be a victim for unlimited frauds, you will lose the main concept of online payment service, and you will find out that the solution has turned into a traditional bank system one by one. You will not need – and it won’t even make sense- to implement extra fancy or online solutions since your are not running in the online mode anymore.

However this approach is one of the possible scenarios to solve the Cash-In issue but I would vote for this as the worst approach, in the next approach and the upcoming” Do and Don’t article” I will explain why this methodology is not on my favorite list.

Still you can tweak it with a link with insurance companies, but as told before. Please avoid this way!

4- Back-end you wallet!

Personally I will always vote for this approach since it capitalize on the online concept, and it doesn’t force you to run endless promotions and shouldn’t change the risk level either in positive or negative way.

Back-end your wallet by linking it to a credit card number, bank account or any other saving account. And the ultimate is to back end your wallet to a payroll account. This will ensure a smooth and continued funding source of money to feed your wallet.

Once your fund source is granted, you have to focus on offering services to your customers, you will need to support your customer needs and try to lower the Cash-Out to the lowest possible count and put Zero Cash-Out as your major target.

And to make it work better you will need to follow the following rules,

  • Ensure to offer rich and convenient interface, mobile APP, web site, USSD, SMS, IVR, WAP site and so on, less is more and eventually 2 channels is always a good start to be increased later
  • Maintain the same experience if you will launch your wallet service with more than one channel, and in your planned upgrades, it’s a must to deliver the same upgrades across all channels all at a time
  • You main target is force the money flow and resident balances or else silent accounts would be your biggest nightmare
  • Your potential revenue and profit needs thousands transactions per day, therefore you have to focus on the money movement process and acquire new service regularly
  • … to be continued

In the next article,

We will focus on the fourth option and highlight more “Do and Don’t rules” to ensure a successful and continued payment service.

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Mobile Payment, Cash-In the passion fruit! [Part 1]

Whenever a company start thinking to implement mobile payment solution or product, sales team starts to communicate and set deals with merchants and banks, marketing team start to work on how to make it sexier, should we start with NFC, digital codes or with cam recognition!

Mobile payment Cash InIt happens that technical, security and fraud team is also busy securing and tuning the service to make it extremely secure, fraud-less and fast as flash.

Afterwards when it comes to production, everybody is waiting and dreaming of the amazing traffic and the number of customers, who will love this service and become loyal to it, slowly it becomes clear that we have missed something for sure. Amazingly we have missed the passion fruit Cash-In!

mPesa, why and why not?

If you started in Kenya or any similar rural areas with no banking or wire transfer infrastructure, internet is a dream, and even if you are lucky and have a bank in your neighborhood, the possibility that “A” and “B” parties own a bank account is almost 0 percent.

It makes a sense that customer “A” will visit the next mobile station, which is almost every where, Cash-In and transfer to “B”, “B” is 100% a mobile owner – he maybe owns 2 or 3 lines even- and “B” will simply pass by the nearest mobile agent and Cash-Out.

But when it comes to payment, its really different and even harder than money transfer!

The payment logical filter!

Whenever your start your payment business you have to pass your product on the payment logical filter.

Imagine “Adam”, who owns Credit and ATM cards, and let\s assume that he will walk to the nearest ATM or bank branch, withdraw 100$, move to the nearest payment agent and Cash-In, back to the shop and asks the merchant to pay with his new digital mobile service and finally when he will realize that his total grocery bill is 120$. Now Adam is handing over his Credit card and with a quick swipe he is done!

How many patient Adam’s out there waiting for you and your digital product! I believe you should not be surprised by the results and just give it a try. Its painful, isn’t it?

Its not an easy task to compete with the long standing Credit card industry, and without an extreme effort from your side you will never make it.

Also it looks hard but there are possibilities to pass a product over the payment logical filter and it works!

In this series a different techniques and solutions will be discussed and it should help you to pass the test – the logical payment test!

1- Uniqueness is a key!

The first methodology to help your customers to forget the Cash-In pain is to offer a real unique service. It must be unique, and can’t be purchased via Credit card or Cash. It should be attractive and stands for a real customer’s need and would be great if it solves a real problem for them. This technique will make the paradigm shift and transfer the customer pain from Cash-In process to a different spot.

In some areas and due to some political or financial issues which may last for few weeks or even a month, people are suffering to refuel their cars, Gas station queue is so long and it takes few hours to get your turn at the bump.

Can you imagine if you finalized a deal with a Gas satiation and announced your Gas refill product, where customers will request the Gas and it will be delivered in 24 hours at the customer door. In this case the complicated Cash-In process will be like a peace of cake, and slowly the Gas queue will be waived to be a Cash-In queue. and with a reasonable fees you will start your next step where you have loyal customers now that still using your digital Gas product even-though the political or financial issue is over.

This should be an example of a unique product which also touches a real customer need!


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Mobile Payment, MNO VS Banks an endless dilemma

One of the most repeated questions when a mobile payment discussion starts, who will won at the end in this newly invented war Banks VS MNO -Mobile Network Operator-?

MNO VS BanksOn a very personal thoughts, I can’t see a link or even a symptom of war, both players are enriching the game and their targets are totally different.

There is a clear line that distinguish bank users from MNO users, I’ll call it the 5K line. In most countries, if you tried to open a new bank account you will be requested to deposit a sum of 5K -in average-of your local currency, while with only few cents you can get your self a new SIM card and start transacting immediately.

The 5K theory explains why normal or even advanced users may easily transfer 1,2 or 5K using their mobile phone to a relative or a friend. But we can’t imagine a user transferring 100K from his mobile, users are likely prefer to do this via bank branch or at least online banking interface.

I do imagine that MNO will attract low-mid income users and encourage them to use the banking concepts and functionalists and slowly advance them to be a real banking users. On the below selected units we will try to spot the difference and potentials for each one of the two big players.

Customer Base:

As MNO will not attract low-mid users which is more than 70% of any community, MNO will be the winner with the biggest customer base. On the other hand banks will have the elite and high value customer base with total of 30% of the population.

Transaction Volume and Count:

MNO targeted revenue is the transaction fees, and to expand their revenue MNO will keep pushing and inventing new services to push the money circulation to the maximum maximizing their revenue in reverse. MNO clear target should be minimum fees and small-mid amounts transferred in an insane and flashlight speed.

Banks will come in the second place from the transaction count, and ranked as number one in the transaction volume ,where Bank concept is to encourage users to leave their savings for as long a possible allowing the Bank to do a numerous projects and investment to generate its revenue.

Cash Flow and Circulation:

While Bank is capitalizing on the savings, MNO will circulate the money like thousand times more than Banks do, and the flow will always be at the MNO side.

Resident Balance:

Banks resident balances and saving amounts will be more than MNO, specially that MNO will keep pushing for fast money circulation and the network will keep cashing in/out rapidly.

User View:

From a user prospective MNO will offer me fast and convenient way to get a certain service and I will sacrifice with small portion as my convenience fees. As a Bank user I will expect some profit -interest- on monthly or annual bases against my savings.


As mobile payment era just started, its still too early to answer this point and nominate the winner, we will need to wait and see how it will go but I think we will some how end with an equal situation.

Finally, mobile payment will grow specially, when we are sure that both players will adopt the mobile as an official and convenient gateway for their financial requests and we will see an unlimited options and innovative solutions that is built and based on mobile handsets.

Khaled Sayed


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