2013-01-04, Nerijus Celkonas

Mobile Payments - back to the future

Mobile Payments - back to the future

Give yourself a question – why payment sector services aren’t influenced by the quickly developing technology? We’ve been using cash for around 1000 years (first banknote issued by Song Dynasty, China in XI century). We’ve been using plastic cards for 50 years now. But more than 20% of transactions in U.S. are still done using cheques. Can you image today’s teenager using a tape recorder?

I’ve been trying to answer this question for several years. Technologies are here, money (that is, numbers) is accounted by computers in real time and delivered to the customer through all possible channels (paper, online and mobile). But essentially new services haven’t been introduced to the market for several decades. Why?

Do technologies allow me not to own a wallet (in its basic sense)? Yes, but it‘s not done.

Do technologies allow me to buy a song online for 0.10 cents only? Yes, but it‘s not done.

Do technologies allow me to see my cash balance anytime and anywhere (for example, on my card :-)? Yes, but it‘s not done.

I had to understand the whole worldwide payment ecosystem to find the answer to these questions. And it didn‘t cheer me up at all.

Here are the main reasons why payment sector is in a stalemate (no way out) situation:

  1. Credits and payments are processed by banks. Credit system is naturally conservative and this influences payment systems.
  2. Card systems organizational principle (issuer, acquirer, processor) is „drugs“ for banks, as they can‘t bite the hand that feeds them. But technologies give freedom for us to innovate as cards are only one of the sales channels and intended for C2B sector only.
  3. PULL (cards, direct debit) system and its security faults and expenses associated with them impede the development of electronic and micro payments.
  4. The absence of global PUSH ACH doesn‘t allow to speed up and lower the costs of international payments.
  5. The absence of global ID (as the IBAN in Europe) blocks the creation of new payment ecosystem‘s foundation.
  6. The division of the global market by the banks according to their homelands doesn‘t prompt cooperation and creation of new products.

Even such technology giants as Google and Apple with huge capital support could only think of own card „collections“ (Google Wallet or Apple ID).

Looking at this stalemate situation, I understand that a win-win solution is required in order to set it in motion. As for any other cooperation, global government (that‘s basically non-existent and U.S. drags behind Europe in this area) or the understanding of the „Prisoner‘s Dilemma“ principles is essential in this situation. It‘s practically proven that the best result for both parties is achieved when they cooperate.

This way from this complicated web an idea of a new payment ecosystem was born. (patent pending).

I‘m not going to waste your time and explain the principle in detail, but this system will allow:

  1. To see and manage your beloved bank‘s account or few accounts/cards (balance, history, payments) on any device (or even without it).
  2. To make online transfers anywhere in the world for a minimum charge. Share your account with your friends or relatives (B2B, B2C, C2B, P2P).
  3. To request money from anyone in real time (virtual mini POS).
  4. To pay using your bank account at any POS (point of sales), e-shop or TV.
  5. To pay your restaurant or gas station bill without the help of a shop-assistant.
  6. To add any existent loyalty system.
  7. To make remote payments – pay for goods at Tesco in London while being in New York‘s Central Park.


And all of this operates as an open ecosystem – banks, point of sales manufacturers, telecommunication companies can join it. Of course, this also creates great conditions for average user and seller.

This system uses PUSH money transfer methodic which decreases the risk of fraud and costs to a minimum. It’s an additional service channel for banks and payment organizations where only the bank that has the client’s account is participating in the transaction (the client can use his/hers mobile bank application for payments), this means that fewer parties share the commission, thus, this means lower prices for users and larger incomes for banks. Merchants don’t need payment (card) terminals anymore which speeds up login and decreases prices. It’s a come-back to the XXI century for the users.

Of course, the main target of the new and comfortable ecosystem is cash payments. After all, you can’t give your child lunch money any other way even though the technology is there to do so. (or cash) An integrated and safe cashless tendency is the main awaited goal of all three parties (banks, governments and users).

We’re intensely working with all of our partners so this service reaches its first Lithuanian customers this spring. Follow our news at www.balticforge.com and be among the first ones to try out this service. Pre-registration for closed beta starts at mid-January, follow us.

 P.S. Tickets to Lithuania can be ordered at your local travel agent :)


Author: Nerijus Celkonas, Founder of WoraPay Inc


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