JN subsidiary, MC Systems, to roll out mobile payment device
Management Control Systems has launched a new electronic payment device, MPAY2, which will be distributed through local banks to small merchants.
The full roll-out will be prefaced by a six-week pilot.
The device is attachable to smartphones and tablets to allow payments by debit and credit card, but is currently only compatible with the Android operating system. That will change later, said MC Systems, the information technology subsidiary of Jamaica National Building Society.
MPAY2 effectively turns a mobile device into a point of sale terminal, allowing merchants and service providers to process card payments without having to acquire the card-processing terminals distributed by commercial banks.
Merchants typically pay rental and sales commission charges to their banks for point of sale transactions. MC Systems Deputy General Manager Dwane Russell did not disclose the fees associated with his company's device, which can process payments from both local and international cards, but said merchants would pay around 50 per cent less.
"The pilot is expected to involve 50 vendors over six weeks. We want to make sure that the technology is easily accepted by both consumer and merchants. It will be something new for consumers to hand over their cards to someone with a device attached to their smartphone," said Russell.
"The pilot is just for us to get more market information in terms of the feedback from consumers," he said.
MC Systems says its e-payment device is a first for the Caribbean. It was developed in collaboration with VeriFone Inc, a global provider of technology for electronic payment transactions.
Verifone built MPAY2's security sleeve, and provided MC Systems with a software development toolkit, "which we used to develop the application", said Russell. The Jamaican company, which represents Verifone in all English-speaking Caribbean countries, is also planning to roll out the product to those markets.
In Jamaica, MC Systems aims to tap into a market that recorded 6.2 million point of sale transactions in 2014, which were valued at $32.5 billion, as reported by the Bank of Jamaica.
In talks with banks
Russell said the company is in talks with two banks for deployment of MPAY2, but that more banks will be brought on board later.
The names of the two banks were not disclosed.
MC Systems cannot sell the product directly, but has to distribute it through the banking system because of current e-payment laws.
"Until there have been some changes in the regulations, the banks are the only ones allowed. The merchants will have to sign up with the banks to accept both debit and credit card - that process remains the same. The only difference is that instead of you as the merchant getting a point of sale terminal, you will be given the sleeve and you can use your own cell phone or tablet," he said.
MC Systems plans to pitch MPAY2 mainly to small businesses as a cheaper and faster solution than the fixed-location card machines now present in supermarkets and other retail locations. Russell adds that groups such as craft vendors and market vendors are also in the company's cross hairs.
The device is described as "chip card-ready" with two slots to process chip and magnetic strip debit and credit cards, and may be accompanied by a small bluetooth printer for receipting.
"Most retail locations use a specialised point of sale terminal to accept those cards. Now the solution allows those cards to be accepted via cell phone just as securely as those terminals," he said.
Information on how to utilise MPAY2 will be provided to merchants by MC Systems.
However: "Merchants will have to sign up with banks as per usual which will provide them with the name of the application which they can download from Google store. Once that is downloaded, the merchant will also be provided with a device, which we call a sleeve. The bank will configure their accounts and then they can process the cards," said the deputy GM.
The sleeve is a security device to be attached to the mobile phone or tablet. The application that the merchant downloads communicates with that device.
"Everything is encrypted, so it is just as secure as a regular point-of-sale terminal," Russell said.
MC Systems is itself a primary supplier of the fixed terminals owned and distributed by the banks - accounting, it said, for around 90 per cent of the machines distributed nationwide to merchants.
For its planned Caribbean roll-out, MPAY2 will also be distributed through the banking system.
Otherwise, MC Systems is now spearheading a chip programme for point of sale terminals, resulting in the upgrading of 3,000 sales terminals at merchant locations across the Caribbean to accept chip cards.