1. Client : PayPal Country : Singapore
Publication : The Business Times
Date : 5 November 2012
Topic : Local mobile payments firm goes up against the big boys
URL : http://www.businesstimes.com.sg/specials/bizit/others/local-mobile-payments-
firm-goes-against-big-boys-20121105
Visitorship : 65,401
SCCP sees tie-up with banks as ace in the sleeve trumping PayPal and Square
BY
VICTORIA HO
SINGAPORE-BASED mobile payments company SCCP Payment Services is up against strong
competition in the form of PayPal and Square.
All three offer smartphone attachments that read credit cards to enable mobile payment. But the
homegrown SCCP is going with a different strategy: it is pairing up with banks to go to market -
instead of pitting itself against them - in the hopes of winning more merchants over.
For the past two years, there have been increased sightings of personal credit card readers plugged
into phones. The little dongles typically go in the earphone jack and transmit card data through an
app, and allow people to make credit card payments on the go, or with small merchants that don't
have credit card terminals.
The technology is fairly simple. It was introduced just over two years ago by Twitter co-founder Jack
Dorsey. His company Square launched a little white attachment for iPhones that would process
credit cards.
It's been particularly popular with taxis in the US, allowing cabbies to swipe customers' cards with
their phones so nobody has to fumble with change.
Square reported that it is on track to process US$6 billion in transaction volumes by this year, but it's
still early days for the dongle. Square's service is limited to North America.
That's set to change. Web payment giant PayPal jumped on the bandwagon in March, rolling out a
similar dongle to North America and in the Asia-Pacific region - Japan, Hong Kong and Australia. It
was due to be introduced in Singapore this year, but the company is mum on exactly when.
With the market still open for an agile player, SCCP started moving quickly this year with its own
mobile dongle. It launched its Swiff service as a pilot with HSBC Bank here in March, but SCCP's
projects in the country hit the brakes while the banking industry hurried to comply with the MAS's
(Monetary Authority of Singapore) 2014 deadline for all cards to have secure smart chips installed,
said Etienne Van den Bogaert, co-founder and chief technology of SCCP.

2. He said the company was working to get its own equipment compliant as well. "Now we have the
chip reader and EMV level 2 certification. We are ready to work with banks in Singapore again."
It signed two banks in Thailand in July, the Bank of Ayudhya and Kasikornbank, rolling out the service
in September.
Mr Van den Bogaert said 250 readers were launched in Thailand, but the company has since
received orders for 20,000 more. In addition, SCCP has banks signed in the US, Russia, and the
Philippines.
He would not provide more details about banks here, but said Swiff will go live with at least one
bank in 2013, and it isn't HSBC.
SCCP's entry to the market will also ride on one difference in strategy compared with the big players.
"Companies like Square and PayPal compete with the banks, but we're working with them," he said.
While the big two market their services directly to small merchants and users, SCCP is tying up with
banks to unveil its service in the hopes of riding on their ties with businesses to get more to sign up.
"Rather than deal with a third-party account, you can go straight to your bank," he said.
Square and PayPal have no monthly fees and fixed levies per transactions. PayPal's is 2.7 per cent,
and Square charges 2.75 per cent.
Mr Van den Bogaert was reticent about Swiff's fee, hinting that it would be competitive. "If you go
with a third party, they will have to work bank fees and an additional margin for themselves in. So if
you go with only the bank, merchants will receive better fees."
In spite of the ruckus surrounding contactless payments, Mr Van den Bogaert sees a long runway left
for credit card swiping.
The recent crop of smartphones in the market have increased attention for tap- to-pay services by
coming with NFC (near-field communications) technology, which allows the phones to act as credit
cards.
According to Juniper Research, NFC will be present on one in five smartphones by 2014.
Google is certainly pushing this trend strongly. The Google Wallet app was released in September
last year, and works with MasterCard's PayPass and Visa's PayWave contactless payment methods. It
is in the midst of being slowly rolled out across different Android devices.
The latest iPhone 5 has NFC conspicuously missing, but third-party makers are already capitalising on
that. Miami-based start-up Flomio is working on its FloJack NFC dongle for iPhones and the iPad.
Singapore, has been a little faster than the curve, thanks to the government's nudging. The
Infocomm Development Authority of Singapore (IDA) has managed to assemble a consortium made
up of Gemalto, the country's three telcos, two banks (Citibank and DBS) and payment vendor EZ-Link
to get tap-to-pay moving.

3. The service went live in August, after years of halts and waiting, and users here can use compatible
devices to pay charges on public transport and at retailers with NFC readers.
But the card-swiping companies don't seem too threatened by the developments on this front.
Square has been clear on its wait-and-see stance on NFC. COO Keith Rabois told Gigaom.com late
late year that "I've never met a single merchant in the US who says I want this NFC thing", and added
that the company would consider NFC later if it turns out to be popular.
SCCP appears to be adopting a similar attitude. Mr Van den Bogaert said the company is focused on
getting its infrastructure working with banks, so they can accept mobile payments in the first place.
Once users are paying with their phones, it's a matter of swopping out readers and hardware to
accept new technologies like NFC, he said.
The company is also keen to show banks how to use user behaviour on mobiles to their advantage.
"Today, we segment consumers based on the cards they use. On the mobile, you can go deeper to
offer unique deals to each person, based on profiles built on the phone," Mr Van den Bogaert said.