Is there an easy way to add money to a key fob, wristband or jewellery? Yes, there is. It’s called CCP, and its makers believe it can tackle the security and convenience issues people have about cards and mobile money wallets…
Proponents of digital money have lots of good reasons to dismiss cash. Here are three.
1. It’s dirty
2. It’s expensive (commissions on cash transactions can be more pricey than electronic exchanges)
3. It invites embezzlement and kickbacks
But the truth is there are some equally strong counter-arguments such as…
1. It’s low risk (you can only lose what you possess – with digital money, you can have your account emptied)
2. It’s democratic – kids and the unbanked can use it freely
3. It doesn’t need a network connection
Fintech firms and experts have thought hard about these wrinkles. Is there a way to combine the best of both worlds?
Well, a consortium led by Samsung Semiconductor and Smartlink thinks so. It’s created the Contactless Companion Platform (CCP), which lets users add digital money to a variety of ‘dumb’ devices from a key fob to a ring to a wristband. The tech could even work with smart clothing. Users can then make contactless payments with these devices and review all their activity from a smartphone app.
Here’s how CCP works. The user downloads an app and registers his or her account details by photographing a bank card. They then register themselves with a selfie and a photo of their ID.
Once set up, they can find compatible devices and add them to their list. They can then select an individual peripheral and load it up with funds. Thanks to tokenisation technology, they can decide to limit these funds by time (for the next 24 hours only, say) or by retailer or merchandise category.
This ability to restrict how and where the money can be spent is great for security. And it has obvious use cases. Parents and children, for example.
Thomas Arenz, director of marcom at Samsung Semiconductor Europe, says: “You can imagine a parent giving money for their child to see a movie, but being able to make sure they can only spend the money in the cinema. It’s really a way to provide money that’s not cash, and which gives everyone transparency and control.”
Of course, the above use case requires at least one party to have a bank account and a smartphone. What about those with neither?
Arenz says the platform can accommodate them. Users could manage payments with a feature phone using USSD menus, and they could pay in and out using a scratch card and sms activation code or via retailers who hook into the system.
Indeed, he believes retailers could benefit hugely from the process. “They will suddenly have more information about transactions and customers, and I believe the opportunity to promote will open up new revenue streams,” he says.
But ultimately, whoever the user, Arenz argues that convenience will be the key. He says: “People will use this in the gym, on holiday, at festivals and so on. You don’t need a network connection, there are no battery life issues and you know that, if you lose your device, the most you can lose is the balance on there. And even then you can quickly withdraw the funds from your app.”
Certainly, there is evidence to suggest people will choose contactless when it’s made easy. Famously, contactless has transformed the way people pay for travel in London. NFC payments are accepted on all bus and train journeys, and 1.8 million journeys are made this way every day.
And CCP is not alone. Visa has experimented with wearables. It trialled an experiment with athletes at the Rio Olympics. Meanwhile payments MasterCard has launched a similar platform. Startups like Ringly are also pursuing the concept.
CCP is not live just yet. Samsung is launching a pilot in Eastern Europe in April, and will roll out more later in the year.
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