iKaaz, a Bangalore-based mobile payments solution provider, founded by ex-Nokia Money team, has launched a Tap & Pay reader that works on Near Field Communication (NFC) technology to enable cashless transactions.
Interestingly, with iKaaz’ technology both, merchants and consumers, need not have NFC enabled devices. Note that only couple of high end smartphone come with the NFC technology, and India is majorly a feature phone market. iKaaz has tried to bypass the requirement of NFC technology on consumer’s or merchant’s device.
Instead of requiring users to have an NFC capable phone, it provides consumers with NFC stickers to make their phone NFC enabled. These NFC Stickers are priced between Rs 40 and Rs 70, depending on the model. iKaaz has informed MediaNama that these stickers come in the form of college or corporate id cards, which are available for Rs 40. If the card needs to be inserted inside a mobile phone, then it’s priced at Rs 70. The NFC stickers can then connected to Mobile Wallet for payment.
The iKaaz NFC Reader can be connected to any mobile phone to convert it into a mobile Point Of Sale (POS) device. The device is available for Rs 1000.
In October 2012, iKaaz had launched its NFC based Tap & Pay solution for merchants. It appears that the company may have realized that NFC did not quite take off in the country as feature phone handsets still do not come with NFC capability.
NFC technology did not take off in the country is due to the high cost of NFC terminals and NFC-enabled phones. While iKaaz has smartly bypassed that barrier, it’s not clear who bears the cost for NFC stickers — the consumer or the merchants. For consumers it wouldn’t make sense to invest in NFC Stickers as initially this technology won’t really be that widely used. Besides, why would any consumer attach a sticker to their mobile with no visible benefit?
iKaaz has informed MediaNama that they currently operate on a B2B model to sell NFC Stickers, which indicates that it expects merchants to bear the cost of stickers and reader. Note that with the technology, merchants would have to distribute the stickers to every consumer who wants to make a payment via iKaaz Tap & Pay. We are skeptical about how financially viable this option would be for merchants.
Contactless Payment Solutions
In 2009, Belgium based payment solution company Tikitag had launched its do-it-yourself RFID kit in India, however, the company seems to have shut down. In December 2010, Ojas Venture Partners funded mobile payments solutions company Tyfone had partnered with First Data to enable mobile contactless payments on mobile handsets using MicroSD cards.
In February 2011, telecom operator Tata Docomo had announced that it will trial Near Field Communications based mobile payments in Hyderabad, in partnership with XIUS. Initially it had planned to offer operator based services like mobile phone top-up (expectedly), as well as content like ringtones and wallpapers. We haven’t heard any progress from Tata Docomo after the NFC trials.
Other recent mPOS solutions
Sistema Shyam TeleServices Limited that operates voice and data services, under the MTS brand, had launched MTS mPOS, a mobile point of sale device that can be attached to MTS mobiles for point of sales transactions.
PayMate, the mobile payments company, had launched a PayPOS mobile application, which also enabled credit and debit cards payments and electronic transactions on mobile phones at the point of sale (POS). However, unlike MTS’ mPOS service, PayMate is an application based payment application and is available on all Android/iOS devices.
Ezetap is an mPoS service incubated by by AngelPrime, startup incubator founded by Bala Parthasarathy, Shripati Acharya and Sanjay Swamy. There’s also MobiSwipe Technologies, another mPoS company, has raised money from One97 Mobility Fund, and MSwipe that recently raised an undisclosed amount of money from Venture Capital firm Matrix Partners.