Bottom line savings with electronic top-up
Operators can add between 10% and 15% to the bottom line figures associated with pre-pay customers, simply by deploying a system that allows customers to top-up their pre-pay accounts automatically using their credit cards or bank accounts, according to Upaid's ceo, Ashley Ward.
Upaid's HIPAAS service provides a secure payment method which can be plugged into by operators on one side and by banks and credit card companies on the other. As such it is capable of a whole range of m-payment services. However, as Ward explains, pre-pay top-up is a necessary and highly valuable starting point. "Operators need an instant payback; customers need educating on using mobile phones for things other than person-to-person communication. Therefore you need a stepped approach and pre-pay is the obvious starting point as the benefits to all are clear."
For customers that benefit comes in the form of an easy, convenient and secure top-up method. The system send an SMS to alert the user that their account is down to a level set during registration, and all the customer has to do is reply to the text with their PIN and the amount. This is then authenticated by cross-referencing the phone's MSISDN number and the PIN with credit card details given during the one-off registration process.
For the operator, the benefit is a massive reduction in the cost of the operation. Ward explained that, on average, the production, distribution, commission, fraud and leakage associated with scratch cards worldwide accounts for 10-12% of pre-paid turnover. However, he puts that cost at 25% for Europe due to the higher costs of raw materials and labour. Ward therefore stated that by switching to the Upaid service operators can put 10--15% straight to their bottom lines.
Ward further explained that Upaid, which has been in the m-payment market for some time, has changed its own business model. Ward said, "It was pretty much impossible to sell systems into operators and banks but they are interested in accessing a third party service. We no longer sell technology but are now selling a service." The change in strategy has so far been well received and Upaid is currently trialling its top-up service with VISA.
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