BitDepth 751 - October 05

The Telecommunication Authority's open forum on electronic payments sparked some heated comments.
TATT triggers transaction tiff

Carl Rosenquist explains a mobile payment implementation, dubbed Mobicash for the presentation at the 6th ICT Open Forum. Photography by Mark Lyndersay.

The recent Telecommunications Authority of Trinidad and Tobago ICT Open Forum on electronic payments systems in this country started sedately enough. Joan John, Deputy Governor, Operations at the Central Bank offered some useful explanations of how the commercial banks and the Central Bank are tied together using the Real Time Gross Settlement (RTGS) system and the Automated Clearing House, quite useful information for anyone who was curious about what happens after data and envelopes get ingested into ATMs and when tellers are tapping away on their screens.

The function of one critical organisation, the Payment Systems Council, no doubt familiar to professionals in the financial sector, was explained to the audience and the Central Bank’s roles as both regulator and stress tester of this IT based financial infrastructure were outlined. Surprising, but logical facts were shared, such as the revelation that the Government is the largest single issuer of checks in the local financial system.

“A robust ICT infrastructure is as important as the financial infrastructure in the development of a modern payments system,” Ms John summarised.
That talk would provide a solid grounding for the presentation of Carl Rosenquist, Managing Principal of SynerCom, about his implementations of cellphone based payment systems.
Rosenquist’s system proved a hit in the Phillipines, where access to phones is widespread and micropayments via SMS messages proved to be an excellent solution to a significant need for money transfer. SynerCom moved from 500,000 users to three million since the system was introduced in 2001.

Some of the measures that the SynerCom bossman described can, technically, be linked to the system which exists today for electronic transactions in Trinidad and Tobago. There would need to be an electronic tie-in to the RTGS system, a way to ensure that transfers are covered (Rosenquist suggested one that would make surviving financial institutions liable for the debts of any failed partner that brought a titter from the crowd) and regulations to manage the medium of exchange to ensure that other systems of barter, such as airtime, didn’t overtake the system.
Rosenquist formally described the end user front end to the electronic transaction system as an Additive Branchless Banking channel, but for the sake of a more intriguing talk, he dubbed it Mobicash.

To ensure the integrity of the system, existing incarnations of Mobicash-style systems use three tiers of security, depending on the sums to be transferred.
On the lowest tier, micropayment transfers, usually less than $20 or so, are done using direct SMS confirmation. The next tier up of financial transfer requires a SIM card (or, one imagines, smartphone based) browser and for high value items, transfers would be verified by a SIM card based browser capable of reading a digital certificate.

Implementing adequate security for the Mobicash system Rosenquist envisions would require a public key verification system as well as a radical revamp of the national identification card, which would include more anti-counterfeiting measures, a machine readable SIM card with electronic verification data and biometric verification using the iris of the eye.

It is unclear whether such measures are part of the Exchecquer and Audit Act which is meant to be the lever point in changing the landscape of electronic transactions in Trinidad and Tobago, but it seems clear that the legislation should follow the plans for enabling broader electronic commerce and not the other way around.
Irritation and impatience with the perceived slow pace of electronic transaction expansion turned out to be the hallmark of the evening’s discussion.

One banker’s outlining of the industry’s formal position and the reasons for it was all but shouted down by an audience outraged by the explanation.
A representative of the Payment Systems Council patiently explained that the domestic market was not keen on adopting electronic transactions, and merchants were particularly resistant, but where the good lady was saying “we are taking our time,” the more vocal elements of the crowd seemed to be hearing “you are dragging your feet.” 

Much of the vociferous argument against the banking sector’s resistance to driving the adoption of electronic transactions, inclusive of foreign credit card payments came from merchants keen to build virtual extensions of their existing businesses who find themselves stymied by the hurdles placed in their path by existing systems.

The responses from the banking sector argued that caution regarding fraud was merited, and the local resistance to card based transactions appeared to limit market appeal. Somewhere between the two positions there seemed to be an opportunity to engage the limiting factors facing businesses keen to work in virtual marketspace and to design systems that will address the concerns of the traditional banking sector.
As Carl Rosenquist put it in the summary moments of the event, “there’s clearly need for a payment gateway.”
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