Anar, please tell us how you came up with the idea of the Cash by Code project, whether it was difficult to implement, and what the essence of this scheme of instant cash transfers is.
At the moment, development of self-service channels has the highest priority for AzeriCard. We actively search for promising ideas, follow the news of the world’s payment industry, take interest in our partners’ experience. I learnt about instant cash transfers using the WAY4 Cash by Code technology at the conference held by OpenWay, the vendor supplying our processing system WAY4. The success of this technology in other regions and the usable and secure transfer scheme inspired AzeriCard to launch our own project.
Thanks to the well-coordinated work of all parties involved, it only took four months to implement this idea. OpenWay’s specialists expeditiously carried out necessary tests and made sure the service was up and running and failure-proof. Diebold, NCR and Wincor Nixdorf installed the updates necessary to support the new functions on our ATMs.
Now, the Cash by Code service is available in the menu folder of the same name in ATMs of AzeriCard’s partner banks. When making a cash transfer from a card, the user specifies the transfer recipient’s mobile phone number. WAY4 generates a special code, splits it into two halves and sends one half to the specified number in a text message. The other half is printed on the ATM receipt so that the sender himself could give it to the recipient.
The recipient joins the two halves and using the code (but no card) withdraws cash in an ATM. The network of AzeriCard’s partners consists of over a thousand terminals throughout the country. This way, one can initiate a transfer or make a withdrawal virtually anytime anywhere.
In addition to being user-friendly, Cash by Code is a very secure service as well. We limit the expiration period of the code to 24 hours. When making a cash withdrawal, one must specify the exact amount and currency of the transfer. The multiple security levels decrease the risk of fraud to a minimum.
What banks participate in the project, how quickly are Cash by Code transfers gaining popularity among end users? Does AzeriCard plan to further develop this service?
For Cash by Code processing, we use our standard scheme of clearing and settlement of cash withdrawals. This is why it is extremely easy for new participants to join this system. All AzeriCard’s partners use their terminals to serve Cash by Code recipients, and this makes 29 banks and about 1,300 ATMs. Initiating transfers is available to customers of 9 banks: International Bank of Azerbaijan, Bank Standard, Bank Respublika, AtaBank, AGBank, PARABANK, Bank Avrasiya, Bank Silk Way, and NIKOIL. It is obvious by now that the clients have appreciated the new service and are actively using it, and the turnover is constantly growing.
The Cash by Code project has immense potential, and we have already planned its further development. First, there is a perspective of geographical expansion. Transfers can only be made within this country at the moment, but International Bank of Azerbaijan is looking into the legal possibility of providing the service in the ATMs of its Moscow branch. In case of a positive answer, it will be possible to make Cash by Code transfers from Moscow to Azerbaijan and vice versa. It is probable that later on we will include other CIS countries in the service.
Second, the service is going to be available on other self-service channels. The top priority for AzeriCard is integrating Cash by Code transfers into our mobile banking system. Combining the two technologies will turn a mobile phone into a “cardless wallet” of sorts. This may be relevant when you need to withdraw cash but do not have a card on you. A client will be able to make a Cash by Code transfer where he is both the sender and the recipient. In less than five minutes, he will be able to withdraw the necessary amount in the nearest ATM.
Taking into account the ubiquitous ever-growing interest in mobile technologies, the idea of a mobile “cardless wallet” has every chance of gaining popularity. If AzeriCard plans to implement other innovations for advanced mobile phone users, we would love to know more.
This year, our mobile banking is starting, so to speak, a new life. Since September, clients have access to a completely new service. AzeriCard has replaced the “applet” mobile banking with the innovative “midlet” option and special applications for smartphones.
The old system, which used a mobile applet, called in for many a criticism. Over the three years it existed, only 900 users had enrolled. Our partner banks complained that clients were put off by the complicated enrolment procedure: first, visiting the mobile operator to replace a SIM card, then, going to the bank to link the phone to a bankcard. Many were not happy about being dependent on a single mobile operator. As we found out, there also comes a moment when the memory of a SIM card no longer suffices for adequate service. All of the above reasons prompted AzeriCard to turn away from the outdated technology. Instead, we have chosen OpenWay’s WAY4 Mobile Banking solution.
AzeriCard’s new system, based on a java midlet, is devoid of the above drawbacks. Clients simply download a mobile application via the Internet (from AzeriCard’s site, or from the site of their bank, or from a smartphone app store) and install it on their mobile phones. The phone is linked to a card using a code that can be obtained in an ATM. As a result, a usable mobile banking menu appears on the phone. And there are no memory limitations, since all data is stored on AzeriCard’s host.
An essential criterion we used to select a new mobile banking system was the support of smartphones. This is the “gadget of choice” for AzeriCard’s most active and technologically advances users: the business sector and users under 30 years old. We are happy that our partner in the project, OpenWay, keeps up with the requirements of the market. WAY4 Mobile Banking already works on iPhone and BlackBerry, and a solution for Android smartphones will be released by the end of the year.
According to the expectations of AzeriCard and its partner banks, how many users will you be able to attract to the new mobile banking channel? What services are now available on the channel?
On the whole, one can say that our end users are quite interested in mobile services. For example, in 2010, when AzeriCard implemented card balance text notifications, 32,000 clients enrolled for the service over the first six months only, and this number is still growing. The growth of the new mobile banking’s client base will probably be slightly less sweeping, since specific technological skills are required to install an application on a phone. We predict that about 20,000 thousand users will enrol during the first year of its existence.
The new mobile banking supports such popular services as viewing the list of cards and their balances, a list of recent transactions, statements, card transfers, Internet and mobile phone payments... The new technology has allowed our system to connect to service providers in real time mode and check each and every transaction detail before the transaction takes place. At the moment, we accept payments to 18 organisations on the mobile banking channel, and the number of recipients is gradually growing.
I would like to emphasize the instant card blocking feature. It is a great tool against card fraud and, consequently, a strong incentive for clients to enrol for mobile banking. The old “applet” system did not allow us to implement this service, since it operated via the SMS channel, which is not a secure way to deliver messages to the host. The new system uses modern and secure communication channels: GPRS, 3G, EDGE, and WiFi. A blocking confirmation is immediately sent to the phone, and the updated status is specified in the list of cards.
The features I have named are already available to users at the moment. Meanwhile, our company has started the next stage of the project. As I mentioned before, we are going to add Cash by Code transfers on the mobile banking channel and implement the mobile cardless wallet. Also, the “OTP calculator” is going to appear in the mobile banking menu. In their phones, users will be able to generate one-time passwords used to access the Web banking system, confirm the most important financial transactions, and make Internet payments under the 3-D Secure security standard. Those who do not use mobile banking with an OTP calculator will be able to receive one-time passwords in text messages.
Depending on how quickly mobile banking spreads, will the contents of the service in other self-service channels change in any way? What other plans does AzeriCard have for years 2011 and 2012?
Our ultimate goal is “unload” the ATM network so that it is only used for cash withdrawal and cash-in, while other services – statements, payments, transfers – are provided through mobile and Web banking and in kiosks. But since cash payments make up such a large percentage of all transactions in our country, clients still consider an ATM the most common “point of interaction” with their bank. This is where we usually start introducing new services to the market and then mirror them on other channels.
We plan to launch VISA Money Transfer by the end of 2011. At the same time, AzeriCard is negotiating the launch of the same service for MasterCard cards. The cash-in service will be taken to a whole new level: it will be possible to top up not only the card entered in the ATM, but any other card issued by our processing centre as well. AzeriCard is also very interested in the sphere of public transport. Our partners and we are now exploring various options for providing people of Baku with a quick and usable way to pay their subway fare.
To conclude, I’d like to remind that the international contest Eurovision 2012 is taking place in Baku next May. From the viewpoint of payment infrastructure, AzeriCard plans to give our guests from around the world and their bankcards a red carpet treatment.
AzeriCard is the first processing centre in Azerbaijan that has been fully certified by international payment schemes MasterCard, Visa, and American Express. At the moment, AzeriCard processes transactions for 29 banks both in Azerbaijan and abroad. 26 of them are members of international payment schemes. AzeriCard actively implements top-notch high-tech projects, such as fare payment by contactless smart card, phone payments, utility payments, custom fee and tax payments, mobile and Web banking, card-to-card transfers, insurance fee payment via ATM, deposits, various loyalty programmes, multicurrency cards, etc. Today, AzeriCard’s system services about 2,000,000 bank cards, 1,300 ATMs and 6,000 POS terminals.