Forgetting your wallet on a trip to the shops used to mean howls of frustration at the till.
But soon, you will be able to shop with little more than your mobile phone number.
Abu Dhabi Commercial Bank (ADCB) has launched a new payment system that allows customers to make payments using their mobile phone number.
The payments system, called Mobi, does not require a customer to have cash, a card or even a mobile phone in their possession to be used – unlike other new payments methods such as Visa payWave or BarclayCard’s Quick Tap mobile wallet.
Instead, payments are made using a memorised mobile phone number, without the need for a phone at all.
The bank hopes the system will provide a faster and more efficient method of making payments for small purchases.
“Our number one competition is against cash,” said Ala’a Eraiqat, the bank’s chief executive.
“We believe that 70 to 80 per cent-plus of all customer transactions in the UAE are still cash. But payments are on the verge of a huge shift in technology,” he added.
The patented system works using a virtual card number, which is the same as your mobile number and linked to an account that can be topped up online or at a merchant’s terminal with cash or plastic.
The system allows for payments of up to Dh300 (US$81.67), and allows users to store a maximum of Dh1,000 in an account linked to the mobile number.
To ensure security of the transaction, a customer must enter a six-digit pin number to make purchases, which are verified by text message within a few minutes.
The bank is not expected to charge any fees to customers for using the service, instead passing the cost of a transaction on to merchants.
ADCB is seeking to convince about 300,000 customers to use the service by the end of the year. Currently, the service is limited to existing customers, but the bank hopes to expand availability of the product.
“It’s the young-at-mind we’re looking for,” said Arup Mukhopadhyay, ADCB’s head of consumer banking. “The Generation Y customer will take it up first.”
But the bank will also have to convince retailers to sign up to the service. ADCB is in talks to supply Mobi-enabled handsets to merchants throughout the UAE, with Coffee Planet the first retailer to sign up.
The system means ADCB is better able to track cash payments for small purchases at retailers, giving the bank a better picture of retail purchases in the UAE.
The bank also hopes to provide incentives to retailers by helping them identify customers to offer discounts and coupons.
“We’re putting in mini-loyalty programmes with the merchants with help from ADCB,” said Samir Kamaleddine, ADCB’s manager of alternate channels.
The bank is also said to be seeking agreements with petrol stations.
The system is the result of a partnership between ADCB and Mobibucks, a mobile payments company based in California that patented the design.
Banks and payments providers have been keen to tap a vast market for new payments technology in emerging markets and other parts of the world considered “underbanked” and have been chasing an effective mobile payments mechanism for some time.
A similar service was launched earlier this year in Kenya by Airtel Africa, MasterCard and Standard Chartered, which sent the user a text message containing a randomly generated payment number for one-time use each time a payment was made.
ADCB hopes the use of an already-memorised phone number will be less fiddly and result in a quick, efficient sale.
Mobi is not tied to a mobile network or phone, unlike other technological advances in mobile payments, such as the Quick Tap system launched by Orange and Barclays Bank in the UK, or Google Wallet, a collaboration between Google, Citigroup and Sprint in the US.
Crucially for the bank’s top line, this means ADCB does not share its revenue with telecommunications companies.
"This is basically displacing the mobile phone itself [as a means of banking]” said Ali Abbas, a regional consultant for Euromonitor International. “We’re moving a step forward here."
ghunter@thenational.ae
