A lot can happen in five years but sometimes nothing much happens at all.
In 2003 some mobile voucher companies were suggesting retailers install new equipment simply to accept their new form of currency. Retailers did not want new equipment in their stores and nobody wanted to pay for it. Scanning barcodes displayed on mobile phones required state-of-the art scanners and knowledge of handset type to work properly and still did not address the real issue of checking voucher validity at point-of-purchase. Brands did not want to fund campaigns only to see the data-ownership rights assumed by a third-party who could then use these to promote a competitors product. So overall, not much has changed and despite the predictions of the massed soothsayers of All-Bar-One and other New MediaLand hangouts, the secure digital voucher market has stubbornly refused to take off.
But the last twelve months has seen new signs of life and, by any objective measure, i-movo is the de-facto leader in this now fast growing sector. Measured by the number of campaigns won, the volume of consumers involved and vouchers issued, the footprint of retailers accepting vouchers or the financial values managed on our clients’ behalf, i-movo is a long way ahead of a herd that has thinned somewhat since the Summer of ‘03. Leadership has been achieved principally as we developed a method of using existing credit and debit card payment infrastructure to process digital vouchers. We thought this an interesting and unique way of removing what we saw as the biggest obstacle to retailers accepting digital vouchers as retailers trust card payment technology and most have it. The UK Patent Office thought the method novel as well and granted us a patent on the concept in October 2007.
It comes as no surprise to see a variety of imitators appearing. Some are blatant copies and the market generally sees them for what they are: “me-too” solutions lacking scale or record of accomplishment with a legal question mark hanging over their sustainability.
Others suggest distributing “virtual” credit cards (account numbers, expiry dates, transaction values and so on) by text-message to used as a promotional currency. This both demonstrates that a little knowledge is a dangerous thing while effortlessly proving that clichés exist for a good reason: they are generally true.
Sending these “virtual” credit card numbers by text message might be technically feasible however…
- Although the major schemes and issuers support these virtual schemes, the intent of them is for distance-shopping transactions over the web or by phone. Will the same credit card companies want to go through the expense of opening millions of credit card accounts that will be only used once and will brands want to pick up the significant associated account-opening costs?
- Will any issuing bank allow the random issuing of valid credit card numbers and only hold the brand accountable for redeemed vouchers or will a brand issuing a million vouchers worth a £1 each be expected to stump up £1,000,000 in case they are all redeemed?
- How long before a secondary market opens up with this currency being traded at a discount to face value? After all, a credit card can be used anywhere in the world to buy anything and a £1 to a UK consumer is worth a lot more in terms of real-purchasing power in many other parts of the world where it represents a days pay or more.
- If these “virtual” cards are used again or topped-up with additional value for a different product, does any brand want to come within the ambit of eMoney definitions and potential regulation? Leaving aside legality issues, would any bricks & mortar retailer or their staff know what to do with one of these vouchers if they saw one?
- In the UK, the card payment industry has gone to elaborate lengths to validate ‘cardholder present’ card transactions with Chip & PIN and protect retailers against fraud associated with the mere credit-card numbers themselves. Are retailers now going to re-assume this risk of fraud having invested so much to rid themselves of it?
- Will retailers want to manually key twenty-three digits (card number, transaction value and expiry date) to check the validity of each voucher?
- As these transactions are simple low-value credit card payments, how will the process indicate what the payment is for? Will not any confirmation message sent to a card payment terminal simply indicate the value of the transaction, not the promoted item?
- How will communications with EVERY retailer accepting credit cards backed by the major schemes be handled? Conversely, how would a promotion specific to a closed group of retailers be managed?
- •How will the different prices charged by different retailers for the same product be dealt with? How will promotional rules such as time-of-day and day-of-week validity be enforced? How will purchase of the promoted product be enforced?
- Some or all of these last points have been a feature of all recent activities i-movo has been involved in. The same functionality could only be achieved using “virtual” cards if the retailer’s own card authorisation system support these functions. These are not standard functions to credit/debit card authorisation systems and the bill for modifying these mission-critical systems can often run into tens of millions of pounds.
- These are all valid questions for any company pitching such schemes that I urge anyone contemplating a secure digital voucher campaign to ask. Maybe some or all of them have good answers. While you are waiting, please get in touch with i-movo as we remain the only market-proven secure digital voucher solution in everyday use with 100% availability since launch. Accept no substitutes.