Aimtech said, old clients can also settle their outstanding with the system. Both new and old orders will be activated instantly unlike before when you had to wait for hours.

This move is further showing how e-commerce is beginning to take shape in Nigeria and in couple of year, we’ll see many ways startups will take advantage of e-payment and innovate.

I and a couple of others have really been asking; when shall we have a roll out of Mobile money in Nigeria? You could recall that CBN issue provisional licenses to mobile money operators earlier in the year. I expected that having been working on the solution before the licenses were issued, at least one should be out there in the market. Well, to my dismay, they have not really been given a go ahead, even as solutions of some are ready. I have tested a couple of the solutions and I think they are set to dive into the market.

In my quest to know what really is the cause of the delay? I have heard that CBN will explicitly utter to the world… on your mark, get set… Go, before they can start offering the service!  Yea, the utterance is simple but the clog is there is no timeline as to when it will go public. None of the providers can launch until CBN wants them to. So the biggest question is, when shall we here this from CBN?

Why the politics?

Politics? Is it connected to 2011 elections? No, no, no! It’s not! Really you need to understand that they are many interests holding the service from launch, most of whom have stakes in the banking sector who fears been overtaken by the service. Most Nigerian banks are still “Start-ups” as they are in search of business model after the burst. Well, they are really very influential as you could see their impact on the restriction on the license; No telecom operator can provide mobile money service. Safaricom which is the first success story in mobile money currently moves about 20% of Kenya’s GDP, that’s huge for a company that’s not a licensed bank.

So, I am currently keeping my fingers cross until the day CBN will blow the whistle, I think they could be pressured to start early as huge investments are currently being made in anticipation of the boom.

I am just confirming right now that before you can receive money through Western Union you MUST have an account with any of the participating banks.

CBN was set to have issued the directive recently. While GTbank and UBA have confirmed this, I want to know if other banks have done same. The issue now is, how will CBN monitor compliance to this policy?

Do you think this directive will further reduce Cybercrime? Will it ease customers? Will banks (staffs) comply with this directive?

Q-What structure do you currently have on ground to effectively reach mainstream in the country?

Answer: There are 7 main actors in mobile payment service:  below are the roles of 5 of them (excluding the users and settlement banks).

VTN

The mobile payment licensed operator, the provider of and manager of the mobile payment platform.  VTN is responsible for ensuring platform availability and 99%+ uptime, marketing and branding, ongoing provision of the platform, ultimate funding and regulatory compliance.

Benefits: per transaction commission.

Superagents

A business that oversees the Master agent activities, purchases e-money (reload cards) and then resells them in bulk to Master agents, who in turn sell it at their shops to end users or sub agents.  Superagents are ultimately responsible for ensuring that Master agents adhere to our branding standards.

Benefit: per transaction commission/ Reload card commission split

Aggregator (Superagent employees)

A person or business responsible for recruiting and training new mobile money agents (and ongoing training of existing agents).  Aggregators are also responsible for executing agent point branding.  Superagents delegate the role of ongoing training to Aggregators.  Aggregators can be a unit of Superagents but with autonomy over their respective roles.

Benefit:  Aggregators are remunerated by Superagents. Per their agreement

Master Agent

A person or business contracted to facilitate transactions for users.  The most important of these transactions are cash-in and cash-out (i.e. loading value into the mobile money system, and then converting it back out again).  In many instances, Master agents register new customers at their shops on VTN’s platform through the Master agent’s interface.   They also often provide front-line customer service-such as teaching new users how to install the mobile app and initiate transactions on their phone.

Benefits: per transaction commission/ reload card commission split and monetary Incentives for enrolling new users.

Sub Agents

A person or business who buys VTN reload cards from Master Agents at a discount and sells them in store or on the street.  Sub Agents are recruited by Master Agents at their discretion.

Benefit:  reload card commission split

Your question, though, is about what we have on the ground today and what we have is a working payment platform, with interfaces for the players listed above and a full suite of working mobile apps.  We also have existing users of our ecommerce platform and an increasing numbers of agent applicants.  We have pre-identified some of the businesses and individuals who will fill these roles and we are awaiting regulatory approval for market introduction of the mobile payment.
Question: Is it possible to download straight without having to receive the download link via sms

Answer: Yes, if you have browsing capability on your mobile phone, then you can download the app directly online.  It’s the same as following the url sent via sms, but without the cost of sending sms.  It is also possible to download on your computer and install via a cable.  This is especially beneficial to those who don’t have internet access or agents who may be installing for hundreds of users per day.

Question: What are the criteria and benefits of becoming a beta tester?

Answer: There are no criteria. We select testers at random and incrementally until we make it available to all.   The idea is to be able to manage the level of enquiries before making it available to all of VTN members

Testers will be the first to gain insight into what VTN Mobile Pro is about and what lies ahead.  They will be the first to move money from their VTN account to another account anywhere from their mobile phones.

Question: How do you think this new system will transform the market?

Answer- This is a prelude to the Mobile Payment services soon to commence in Nigeria.  The ability to send money from your mobile phone to another person in Nigeria or outside Nigeria without compromising your bank account (if you have one) has many benefits: security, freedom, cost savings, time management, etc.

If I can stay at home or in my office and send money to pay a bill without going to the Bank, that is huge!  If I can punch a few buttons on my phone and send money to  a friend or family without leaving my seat, that is  a phenomenon in Nigeria!  What this means is that,  instead of waiting or postponing sending a few naira to somebody because of the efforts involved, all of a sudden that wouldn’t matter because you can send money on your mobile phone!

Mobile payment is a sure way for the economy to move forward rapidly because it allows decisions about commerce transactions to occur faster.

If there are no impediments and no excuses  not to send that money right away, say “oh the bank is closed” , or excuses about traffic or the fact that the recipient does not have a bank account or banks with another bank, then the recipient will have the money right away and then use it right away. You see, it’s all about how fast the money can move securely in the economy.

Question: How robust and secure is your new mobile payment system?

Answer: VTN Mobile Pro is very secure.  Customer information is not stored on the handset.  Each transaction requires a PIN, which is encrypted during transport to VTNs  gateway.  Also, there is a 1-1 relationship between the VTN account and the phone number used.  Even if your PIN is compromised, another party cannot initiate a transaction from  their phone; the system will reject such request.  On the VTN gateway online, and as we’ve demonstrated in the past, customers can add an additional layer of security to their account. This form of security can stop any form of potential intrusion even if your password or PIN is compromised.  You can even be monitoring all the futile efforts by the intruder live on your phone!
This has never been done before in Nigeria.

The VTN Mobile Pro, a product of 7 years of combined work, is designed to be very light, so what we have done is focus on the core areas that matter to the user.   A typical user wants to send money, check their balance, top up their mobile and interact with VTN support in real-time.

VTN Mobile Pro is a suite of apps, one of which will work on any mobile phone in Nigeria.  We are committed to a continual development process, keeping current with new handset models as they are introduced to the market.

What these apps do is allow access to our payment platform, which we have operated in Nigeria for the past two and a half years.  A payment platform, to us, is like a computer hardware manufacturing plant. The mobile application, to us, is like a gate to enter the plant, and there are different possible gates:

-Internet via IP protocol
-POS
-mobile phones

What we have been building for years is the manufacturing plant itself and we have shown over and over again that we have a working factory.  Now is the time to open another gate for VTN users to interact with their accounts via their phones.  We believe this mobile component will be extremely important, however,  for the present and foreseeable future it will not be as robust if you compare to online access.

Internet access is wide, broad and can allow unbelievable amounts of different services to be leveraged on it.  For example we have merchants who have thousands of subscribers who pay for services on a monthly basis.  The customers don’t run around worrying about how to make payments monthly.  The system handles recurring billing by debiting their account monthly and crediting the account of the merchant.  You can’t do that efficiently on your mobile phone especially when membership is suspended for non payment and you have to renew.  It’s just not friendly on mobile phones, so therefore  internet access is a key part of the whole process.

We await public availability of the application.

Jide Akindele the CEO Said:

<break/>

MMIT will be doing a Live RESEARCH demo mobile money transfer at Unilag tomorrow in conjunction with Mobile Money Africa. MMIT will be giving out cash vouchers to students who now can be able to make payments, and transfer money to their accounts.

Participants will get cards in different denominations N500, N1000, N2000, with this cards they can transfer payments to other users on the platform.

If you are in Lagos, find your way to Unilag by 1pm to demo this product. It can be implemented on your e-commerce platform when launched.

<p> You can call 01-8815733, or 08051780338 or mail: info@mmitonline.com for further details.

The fund is said “… will be used for the expansion of the company’s network, enhance its working capital and increase its operational capacity.”

The placement comprises of 1,520,000,000 ordinary shares of N1.00 each at N1.05 per share. This means that with about N55,000 you can participate.

Remember, this is a private place and not IPO. It’s usually opened to institutional investors and not the general public. If you are one, why not request for info here.

The annual event  will hold on the 13th of May 2010 at Old Mutual Business school Mutual park, Jan Smuts Drive, Pinelands, 7405, Cape Town, South Africa.

Speakers;

Earlier in the year, in our annual tracking of top website in Nigeria. I did mentioned that e-payment is one of the biggest opportunity yet unexplored in Nigeria. In a series of exploring e-payment service providers, we caught with the CEO of Virtual TerminaL Network, to take us through their world and how they plan to drive ecommerce in Nigeria. Enjoy the interview.

<break/>

WTN: So, in a nutshell what is VTN all about?

Peter: VTN allows buyers to pay for goods and services online and via their GSM phone anywhere world-wide.  A merchant could be in Abuja, Sokoto, Australia, Japan or China, while a buyer could be in Lagos or Kaduna.  VTN’s technology is a Web/Mobile payment network often described as a cash-funded PayPal type of payment platform.   By “cash-funded” I mean not credit – VTN is not a credit product, but it has many of the attributes and conveniences people associate with credit cards.  And location is not a factor unlike most other payment solutions.

That is a quick description of VTN, but there is much more.  To a GSM operator, VTN allows for real-time Mobile/Online air uptake. To a revenue collector, VTN is the ideal solution for revenue collections from the unbanked.  To a stock brokerage firm, VTN allows small players to participate in online real-time retail stock trading.  Depending on how you want to look at it, VTN has features unrivaled by any platform in the history of ePayments.

VTN is positioned to eliminate the payment problems faced by internet users in the emerging markets of Africa, with first rollout in Nigeria.

WTN: As a consumer, how flexible is your platform compare to others?

Peter: There is no comparison.   We have built a system that is very straightforward.  If you text your email address from any GSM phone in Nigeria to this number:[45609910286  ], (local number coming soon) you are registered on VTN!  You can receive funds on VTN even if you don’t have an account as a sender only needs your email and GSM phone number to establish a temporary account with the received funds in place. For those already registered, all you need is the email of recipient for them to receive funds.

You will then simply need to complete your profile to meet the KYC in order to access funds.  It takes 5 minutes to fully register on VTN’s web site.

There are various ways to fund your VTN account. The most popular at the moment are funding at the Bank and funding using electronic pins or scratch cards.   We have integrated with one of the switching companies to allow funding with bank-issued debit cards and this service will roll out in the near future.

Our ultimate goal is to bring a good percentage of the 80% unbanked in Nigeria into the modern day world of financial services.  We have an agreement with Bank PHB that allows any person – including any unbanked person – to enter a Bank PHB branch and fund their VTN account.  We believe this is a significant first step toward exposing unbanked individuals to the banking system as it gives everyone a valid reason for entering a bank.  Our approach is to encourage all funding methods that do not discriminate against the unbanked in Nigeria.

WTN: Talking about merchants, how can VTN help me collect money from customers?

Peter: Once you register as a merchant on VTN web site , you have various options to process payments.

1-Virtual terminal on your PC – Customer walks in to pay, you turn the VTN virtual terminal on, customers enters their pin and pays.

2-Buyer can pay into your VTN account, all they need is your email address.

3-Real-time online integration. Buyer can pay through your web site and they don’t have to leave your web site to consummate the transaction

4-Recurring billing. VTN debits the account of your customers monthly . This is good in the sense that you don’t have to remind your subscribers to pay their monthly bills, VTN does that for you and notify both parties if a transaction fails for non-sufficient funds. The system keeps retrying and notifying both parties so merchants can take appropriate actions.

As at today, there are over 3400 merchants on VTN.  This achievement did not happen overnight and you can be sure that merchants have put VTN through a more stringent comparative evaluations before signing up.  Next time you check the number of merchants I’m sure will have increased. Merchants are finding out that VTN is the best alternative solution for their online payment needs.

WTN: I understand there are KYC measure on the merchant side, what’s the implication of this?

Peter: KYC is a very important aspect of our business and one we take very seriously.  These are measures to ensure that we are dealing with legitimate businesses and not scams or money-laundering operations.

All merchants must upload two forms of ID’s in order to start processing payments on VTN.   This is part of our KYC.  Once a merchant or personal account holder has funds in their VTN account they can transfer them to any Bank in Nigeria in which they have an account.  Of course to have set up an account at a bank the merchant will have had to meet the KYC’s of the banks.

WTN: You platform has many services embedded into it, can you take us through it briefly?

Peter: That is true. It would have been easier to just focus on payment and nothing else. You can’t do that in the emerging market like Nigeria and succeed.  VTN tries to make up for the lost time in our ability to participate in ecommerce by integrating many services from the start.

We know many global merchants will drag their feet initially so we partnered with seasoned providers to embed services such as online virtual card, email marketing, Free SMS, etc.

WTN: Security-wise, how safe is your platform to protect our data from unauthorized access?

Peter: Our security has to be years ahead of what is the norm in order to gain the trust of our users and global merchants. This involves working with the best talent possible in all facets of our operations.

Here is how we address security on VTN:

–All sensitive transactions pass over a SSL, not just ordinary SSL but EV SSL with extended encryption that is common among financial institutions and banks ;

-Sensitive data submitted by customers are encrypted;

-Customers have the ability to lock their account to a particular IP address. What that means is that if you have a static IP address, you can lock your VTN account to that IP only. Which is essentially one computer in the world;

-VTN servers are securely hosted at our data center in the US with several backups, thereby ensuring optimal security and industry standard protection of hardware and data;

-Customers have the ability to lock access to their account to their mobile phone: This is handled by myaccountguard.com.

The importance of this is that an intruder cannot gain access to your VTN account unless they have your login details and your mobile phone. That is a very difficult combination of security to brake. The way it works is that during the logon process, a 4 digit pin is generated and displayed on your cell phone. The life span of this pin is about few seconds and may never be issued to you again for the next 50 years.

WTN: How save and accessible is money transferred on your platform?

Peter: VTN has processed millions of transactions pre- launch without any major issue.  We are confident that our platform is at the tip and pinnacle of any secured platform.

Without divulging too much information, I would like to let you in on a particular case. A customer allowed another individual to open a VTN account for him. This is against our rule by the way, but it happened, and this customer was asked to fund his account. Shortly after the account was funded, the person with bad intent used the victim’s password to move the money to different accounts on VTN.

Ordinarily very few payment platforms could detect this as an irregularity because the scammer had all the details to access the account of the victim. In fact he owns the account legally, but VTN was able to prevent this fraud because our intelligent platform was able to detect this anomaly earlier on by simply using the logic that the likelihood of a customer moving money from same account to different account and incurring fees along the way is abnormal. VTN security department received a real-time report by the system to check that particular account further. It turned out that this is was an attempted fraud and the account was blocked. We recovered all the money and returned same to the rightful owner while the accounts of the scammer was cancelled. The scammer is now prevented from owning a VTN account again.

WTN: Looking at –payment in Nigeria, what is your view about it?

Peter: Nigerians need to wake up and fast. The situation since the advent of e-commerce has been that Nigerians have been knocking on doors of payment providers to allow them to pay online, essentially begging to spend their money. The response has been “we don’t want you”.  I’m not referring to the occasional ability to pay for one thing or the other using your bank-issued MasterCard or so.  These occasional trial and error successes are not sustainable for buyers in the long run and if you are a merchant in Nigeria, the odds are against you.  Something different is needed, and this is what prompted VTN’s development.

An analogy:  You have a jewelry store somewhere in Ikeja, Lagos and you accept debit cards issues by Banks in Nigeria.  It’s in the news for several years that the incident rate of debit card fraud in Oshogbo is very high and then shortly a man from Oshogbo shows up at the checkout counter to pay for expensive jewelry using a debit card.  What would your reactions be?  If you are an open-minded merchant you’d probably ask for more and more verifications and delay the transaction until you were satisfied.

If you were a less open-minded merchant unwilling to take the risk, you would probably cancel the transaction and say sorry, knowing that if it turns out that the cards was in fact a stolen one you will lose your jewelry and the processor will take the money back from your bank account plus the possibility of losing your hard-earned merchant account if there are more than usual fraud from your store.

Now relate this to an online merchants. The story is the same. Online merchants know your country by monitoring your IP address. Once the IP address says Nigeria. It’s an automatic decline on many merchants websites.  It does not matter if the card was approved by the issuer.  Why?  The risk is not worth it to the online merchant.

WTN: Our web industry, how/where do you see it in the next five years?

Peter: The web industry in Nigeria is at the level the ecommerce was in the West in the early 90′s globally. Those who want to get in now should not look back.  The Amazon, EBay and Yahoo business models worked very well because they were unique at the time and because the businesses had staying power.  It would be very difficult to start and gain tractions today because there are thousands of merchants providing similar service globally.

I believe that by 2015 there will be very significant growth from Africa and, within Africa, Nigeria and Egypt are roughly tied for the greatest numbers of internet users, the highest levels of penetration.  For Nigeria, user growth between 2000-2009 was 5,400%.  That is very significant and usage can only go up with the new fiber optic lines being laid now.  People should worry less about other components that make ecommerce work, once epayment is working, the market principles will take care of other components like fulfillment and shipping.

WTN: At the current pace we are moving, how do you think we can move faster?

Peter: We Nigerians must understand the dynamics of e-commerce and the merchant-buyer relationship discussed earlier.   We must work to standardize e-payment, make internet connection faster by lowering the cost of obtaining broadband.   Merchants and would be merchants should focus on local market, leveraging first mover advantages. The Nigeria market is too large to ignore.  When EBay started, many investors thought this was the worst business model ever. Think about it, why would any sane person buy and pay for the shipping of an item on eBay when you can go to a local store and buy same thing and pay later if you chose to. Well, ecommerce is not about ordinary common sense as has been proven now.

WTN: What should we expect from your company?

Peter: Expect a world class payment solution aiming at bringing out the best in those entrepreneurs who have been struggling for years to participate in global ecommerce.

A little story: I was having dinner with a friend 2 years ago in Abuja and discussing VTN model. He could not see beyond the problems of shipping and fraud.  Right there an SMS message came on his GSM phone, so I asked him, if he ever thought about how a GSM phone was invented. I reminded him that the phone in his hand was invented out of materials from rocks, rubber from trees, water plus some human brains who believed that combining all these free natural resources could aid communications and advance the human race. I also told him that if some people could do that how hard would it be to make the existing postal service work better, or prevent fraud.

He stopped eating and sign on VTN from his GSM phone. He was a convert there and then.

VTN is positioned to revolutionize how business is conducted in Nigeria.  There are many Pierre Omidyar’s, Jerry Yang’s and Jeff Bezos’s roaming the street of Lagos waiting to be discovered in Nigeria.  VTN will help them reach their potentials.