Global USSD Blog

Why Apple Pay Won’t Change Mobile Payment Industry Part 3

by Nikita Tekutiev on January 15, 2015

Let’s look at Apple Pay from a point of view of all players involved in the process of payments:

  • The merchant installs a NFC payment terminal.
  • For each transaction, the merchant has to pay a fee to the credit card company.
  • The bank makes sure that the merchant gets his money.
  • Apple provides an easy and secure way for iPhone 6 users to pay and takes a cut from the cut the credit card company takes.

Apple gets a cut from each transaction while having no investment hardware wise. While there are a small number of users now, there is certainly a room for growth, both in increasing adoption and increasing install base (replacing old iPhones). This growth will drive the revenue, but not the cost, as Apple don’t have to scale any infrastructure. There are no servers from Apple involved, the merchants and credit card companies pay for the terminals and their own servers.

This is looking good for Apple financially wise, but what about other parties involved?

  1. Apple Pay is a proprietary payment system. To use it you have to buy a new iPhone.
  2. Apple Pay works only on NFC terminals. To use it you need to buy such terminals to every checking line.
  3. Apple Pay takes a part of a fee that merchant pays for each transaction.

There is a certain limit on the number of iPhones that can use Apple Pay. After all, the phone costs approximately $1000 unsubsidized. If this quarter Apple sells 50-60 million of iPhones 6 worldwide, that will be the number of potential clients for merchants. Again, this is a worldwide sales, and from the point of view of merchants in the US, or any merchants in the world, to invest into NFC terminals, just so they can accept Apple Pay is a bit unrational. Let’s not forget that even in the US the number of smartphone owners is at 66.8%. That leaves a large number of people not involved in the Apple payment system even in the country with developed economy.

Apple Pay is not and won’t be a worldwide mobile payment technology. There are a lot of limitations on availability and affordability of the technology for it to be the one. What technology can be available for 100% of mobile phone users and used in any country in the world? We’ll talk about it in the next posts. Stay tuned.

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Nikita TekutievWhy Apple Pay Won’t Change Mobile Payment Industry Part 3

Why Apple Pay Won’t Change Mobile Payment Industry Part 2

by Nikita Tekutiev on January 5, 2015

Following the theme of the previous post, let’s talk about another part of the puzzle that Apple needs to solve – merchants. It is clear that the first part (end users) is still lacking due to a limited number of people that can use the technology. What about retail?

Let’s keep in mind that Apple Pay is currently available only in the US. Apple says it supports about 200,000 merchants, including Macy’s, Bloomingdale’s and McDonalds. That may seem like a large number, but about nine million merchants in the US accept debit and credit cards. Why adopting Apple Pay is a challenge for Apple?

Apple Pay uses a technology known as near-field communication, or NFC, that has had trouble winning acceptance from merchants. Merchants needs to install special equipment at their checkout lines, which costs about $500 per device. Additionally, merchant fees for NFC if higher for debit and credit cards. For example, Best Buy Co installed NFC in their stores but switched them off in 2011 because the cost of supporting the platform was too high. For small merchants installing NFC doesn’t make sense because only few people can use it.

Besides additional costs that merchants need to carry to accept Apple Pay, Apple also has a challenge of direct competition with other payment systems. Best Buy and Wal-Mart won’t be accepting Apple Pay and instead backing a retailer-owned mobile technology group called Merchant Customer Exchange, which also counts Target Corp. among its members. CVS and Rite Aid also officially disabled Apple Pay support at their stores nationwide. CVS and Rite Aid belong to a consortium of retailers (Wallmart, Best Buy, Kmart and 7 Eleven), working on their own mobile payment system called CurrentC. It works like this: application on the user’s device is started before the payment order and shows a QR-code, which is read by a seller.

One of the reasons for such rejection by CVS and Rite Aid is the inability to store and process the personal data of each client when using Apple Pay. Apple’s technology does not transmit any personal buyer’s data to seller – only the absolute minimum necessary for the successful processing of payment. At the same time CurrentC obliges users to enter their personal data, which will be transmitted to merchants when making the payment. This is the most valuable information from a business perspective that allows you to build the most complex and effective programs to increase demand and loyalty.

Apple is entering a new ground, probably facing the toughest competition ever, as nobody willing to abandon commission fees (the whole purpose of payment business) and give it all to Apple. There is no second Steve Jobs to persuade merchants to operate at a loss.

We will continue talking about mobile payments in next posts. Stay tuned.

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Nikita TekutievWhy Apple Pay Won’t Change Mobile Payment Industry Part 2

Why Apple Pay Won’t Change Mobile Payment Industry Part 1

by Nikita Tekutiev on December 29, 2014

Mobile payment industry has been blossoming in developing countries for quite some time. The market has so much potential that finally Apple decided to step in and announced Apple Pay. As with everything Apple, the technology promises that “it will change how you pay” and some tech writers already jumped on the bandwagon, claiming that Apple Pay will finally get us to mobile payments and revolutionize the whole industry. This is to be expected from a company who promises a “better life” if you use its products.

You’ve already know how Apple Pay works, so let’s focus on other aspects of the technology. As Eddy Cue said: “We’re trying to do something that I think is a game changer and it requires a lot of people to play together. There’s a lot to do here and we have a lot of work to do, but it should be huge.“ It surely requires a lot of people: banks, merchants, and people who pay using the technology.

Let’s digress a little. In 2011, Google launched Google Wallet, in which it was possible to upload your debit or credit card info and pay for purchases, putting the phone to NFC terminal. However, Google Wallet is still not so popular. In the USA, Google Wallet was supported by a large number of companies, and already in 2011 there were more than 300 thousand outlets in which you could pay by waving your smartphone. However, at that time there was only one smartphone that supported Google Wallet – Samsung Nexus S.

What phones are supporting Apple Pay now when it is launched? iPhone 6 and iPhone 6 Plus. That’s two models out of the whole smartphone market, not mention other simple feature phones. “Apple’s starting with a very different base” because it has access to the stored credit card information of some 800 million people in the form of iTunes account holders, said Denée Carrington, a senior analyst with expertise in mobile payments at global research firm Forrester.

The fact is, you don’t need to have an iPhone to get an iTunes account, so 300 million of those people are not participating in Apple Pay, as there are approximately 500 million iPhones sold worldwide. That’s total numbers of all iPhones sold combined. Let’s not forget that only the last two models support Apple Pay. Is Apple expecting 500 million people to buy iPhone 6? Well, maybe in five years.

To revolutionize mobile payments one thing to consider is availability of a technology to end users. End user is just one side, besides financial institutions and merchants. As it stands, Apple Pay is available only for iPhone 6 users, and only if they are in the US. That’s a relatively small number of people if we are talking about a major push in mobile payments worldwide.

We’ll talk more about Apple Pay and mobile payments in future posts. Stay tuned.

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Nikita TekutievWhy Apple Pay Won’t Change Mobile Payment Industry Part 1

How To Collect And Transfer Money Using Any Mobile Phone

by Nikita Tekutiev on December 25, 2014

Imagine for a second that your customers can pay using any mobile device. It doesn’t matter what business you operate, it may be a chain of convenience stores, or an internet service for the settlement of bills and subscription services. Whatever it is, any person can transfer you money through his/her phone. It may be the latest smartphone, or 2001 Nokia dumbphone. There is no need in a special SIM card, applications and configuration. The technology for it has been existing for a long time and it is called USSD.

USSD is a standard protocol used in GSM network allowing organization of interactive communication between the subscriber and the network service application in the mode of transmission of short messages. USSD works on all existing mobile phones of GSM standard. What may sound like a simple text messaging service, is in fact a powerful technology for mobile payment services, when couple with modern financial platforms for service creation, management, and delivery. There are certain points that makes USSD unrivaled when it comes to true widespread mobile payment system:

  • Can be deployed expeditiously into existing business infrastructure
  • A business don’t need to get a banking license to collect payments with USSD
  • Supported by 99% of mobile phones worldwide, i.e. widespread reachability
  • No need in additional hardware
  • The technology is simple to learn, any person who uses a basic phone feature like dialing a number can grasp how to use USSD

The technology in itself doesn’t imply working with payment systems or creating sophisticated services. That’s why we created Global USSD platform that has all necessary tools that allows turning USSD into any application on any mobile phone. Global USSD is ideal for companies who are thinking of how to converge traditional electronic money transfer methods with mobile technologies and make the mobile phone a handy tool for people to control virtual cash. The fact that any person is not limited by a specific phone manufacturer, operator, or software, makes this payment solution truly ubiquitous.

Global USSD platform can be integrated with any payment systems. Integration with your existing infrastructure is also non-intrusive. We provide our API and integration is done in back end. Global USSD platform is used by top mobile operators and banks in Europe and other businesses in different parts of the world. In future posts we’ll take a look at different scenarios of using Global USSD. If you have questions contact us here. Stay tuned.

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Nikita TekutievHow To Collect And Transfer Money Using Any Mobile Phone

Global USSD Platform For Mobile Financial Services

by Nikita Tekutiev on December 19, 2014

The Gates Foundation, of which Bill Gates is co-chairman, has invested an undisclosed amount in a company, bKash, that lets customers in Bangladesh pay bills or transfer money using their cellphones. As in many other low- and middle-income countries, only about 15% of the south Asian nation’s population has access to formal financial services. However, nearly 70% of Bangladeshis have mobile phones.

“Calling it a “wild adoption of technology” in his keynote, Mr. Gates said 13 million customers are, getting financial services, transferring money, paying in shops” because bKash exploited the ubiquity of cell phones to deliver a needed service.” – states The Wall Street Journal article.

While there is no description of how the service operates, and how it is possible to reach 13 million of customers, the further inspection of bKash website shows that bKash uses USSD technology. The service provides an easy ways to make payments and money transfer services via mobile phones to both the unbanked and the banked people of Bangladesh. Through partnerships with all major mobile operators of Bangladesh, bKash’s technology allows 98% of the country’s mobile users to access its service via very basic handsets.

As a company, which has 15 years of experience dealing with USSD technology, we have a complete platform solution that allows provision of USSD services similar to bKash case. WATAGO is a daughter company of Eyeline Communications, a USSD provider of the biggest operator in Central and Eastern Europe, with more than 100 million subscribers – MTS (Mobile TeleSystems).

One of our products is Global USSD platform, which allows effective provisions and management of financial and other type of USSD services through a single API. By setting up and connecting our platform to operators in your country, you get a universal platform for creation, deployment, marketing and charging of mobile services.

Global USSD Platform is used by mobile operators, top banks and other businesses around the world. The platform perfectly suits the needs for provision of financial services and allows connection of a multitude of merchants. A number of merchants can be assigned to a single service provider (also a single merchant can be served by several service providers). That being so, the service provider can aggregate mobile payment transactions of different origins, thereby extending its business.

The platform provides an easy integration of financial services with the help of Eyeline Mobilizer, a part of the platform. It provides an interface based on HTTP protocol so that the service is created as XML based web pages with additional functionality programmed in any convenient server side programming language.

By using Global USSD platform as a complete solution, you can become an aggregator of services in your country. For more information please contact us here.

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Nikita TekutievGlobal USSD Platform For Mobile Financial Services

Online Delivery Test Form – A New Way To Check Delivery To Your Country

by Nikita Tekutiev on December 3, 2014

Link of the test form –

Using our new online form, it is possible to find out supported operators in your country without contacting us. Why such testing is required? Why there is not already a complete list of supported countries? There are several reasons for that. Let’s look at them more closely.

USSD traffic is not regulated among operators the same way as SMS traffic is. There are no agreements between members of GSM Associations in regards to USSD traffic. That means that mobile operator can block traffic at any time if it doesn’t meet their commercial interest or make reconfigurations that can temporarily or permanently influence delivery of USSD traffic. This can occur when inbound services are competing directly with carrier’s own services or when traffic amount is so significant that it becomes noticed. Or simply because an operator is making technical works inside its network.

While the above mentioned scenarios happen very rarely, our online test form is an opportunity for you to be sure that operators you want to deliver services to, are supported by our platform. Your results are saved to our server, where we can analyze it and have constantly updating information on delivery worldwide.

To perform testing you need to have SIM cards of operators that you are interested in and any mobile phone. Once you have your phone ready, enter delivery test form and choose your country from the list. Then enter your mobile operator’s name and phone number in international format without “+” sign. Please enter correct actual name of operator, this way we can collect relevant statistics.

The testing consists of ten pages. There are ten different channels, and each of them needs to be tested separately. On each test you are supposed to receive either a flash USSD message or USSD menu. Phone screen needs to be unlocked and a flash/menu message needs to be dismissed before proceeding to the next test.

Once you press “Send message”, you are offered to confirm that delivery is in fact happened or not. At this stage please choose correct answer, so we can collect relevant information. If during testing you received at least one message or menu, it means that you can safely start developing your service and be sure that delivery is working.

If you have questions and suggestions contact us at through our contact form here. Stay tuned.

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Nikita TekutievOnline Delivery Test Form – A New Way To Check Delivery To Your Country