Forget cash; just send SMS to make a purchase!

DQW Bureau
New Update


Move out cash and plastic cards, SMS and smart card based transactions would

soon become the in thing in India. In fact, if Vadodara-based E Cube India

Solutions is to be believed, cellphone commerce or mobile commerce is just round

the corner and one can now buy chocolates, pizza or for that matter even a candy

using the cellphone.

While E Cube’s technology promises to enable not just payments for bigger

amounts–something that credit cards are already taking care of, it can also

handle micro payments through SMS, using mobile handset as the interface device.

No cash, no credit card, no debit card is what it promises.

The company claims that it has already rolled out the SMS-based services and

is tying up with the likes of BPL Mobile, Cadbury, Idea Cellular that would make

the cellphone commerce and smart cash dream a reality, albeit only in bigger

cities and select entities as of now.


Talking about the imperative for such a service, Ashesh Shah, MD, E Cube

India, said that micro payments through smart cards or a mobile handset is not

only a more convenient option, it is also a more secure than credit card.

"SMS-based transaction does away with the problems asso-ciated with

credit cards, where each transaction has to be routed to the main server through

a host of local servers before it is authenticated," he said adding that

"irrespective of whether it’s a remote location connected through a local

hub or through VSAT, such transactions involve huge transmission cost."

"This is where a more secure, convenient, wireless and efficient use of

technology comes into the picture," he reiterated.


According to Shah, the company is aiming at promoting the smart card

technology on the back of its vending equip-ment supply business throughout the

country. "Being the only company in India capable of supplying indigenously

manufactured, large-sized automated vending machines that can interact with

smart cards or mobile phones, we are focusing on m-commerce applications–both

GSM and CDMA– in a big way," he said.

The new age tool

The company’s first product, which enables the propagation of subsequent

tools, is the wireless reader, a versatile tool that can be integrated with

various products–from copier machines to petrol pumps–for complete

automation and unmanned operations.

The readers are compatible with both GSM and CDMA technology

and can also read credit card transactions as well. "Once the readers are

in place, an exercise which has already commenced, plastic money will flood the

market," says an up-beat Shah. "We have our infrastructure in place

and we are now in the process of introducing our other products," he added.


According to him, one of the main products is Smartcash or

cash in electronic form. This comes in the form of plastic card available in

various denominations. What’s more, one does not need to fill any forms or

present any proof to avail of this facility. However, the company plans to stay

away from either manufacturing or selling the cards. "This will be done by

banks with which will tie up," informed Shah.

The smart cards have embedded chips that are compatible with

the readers that have already been floated in the market and each transaction

takes the form of an SMS message, which works on sec-ured authentication modules

(SAM). The Smartcash card also acts as an intelligent card, which reduces the

amount spent on each transaction.

"Smartcash is a secure protocol for electronic cash,

embedded in a microchip with the capability of multiple usages. Its open

architecture enables seamless integration and secures transactions through 3DES

algorithms. For organizations that have a large number of employees, the

Smartcash card doubles up as an ID card as well as a cash withdrawal

authenticator. The card is also being integrated into vending machines,

manufactured indigenously by us, which can dispense packaged snacks, cold drinks

and hot beverages," explained Shah.


The infrastructure involved in these transactions consists of

a multi transaction processing server (MTPS), which has already been set up by

the company. The MTPS recognizes each transaction and supplies information to

the concerned banks in the format that the banks specify. The company has also

set up a mobile commerce hub (McHub), which is expected to transform mobile

commerce in the country.

Buying through SMS

To complete a transaction, one just needs to do two things–give the

shopkeeper ones mobile number and authenticate the purchase through SMS. On the

technology end, once the shopkeeper enters the customer’s mobile number into

the wireless reader, the device sends the message to the McHub, which in turn is

directed to MTPS and an SMS is sent to the buyer for confirmation. On receiving

the message, customers just need enter their secret code to authenticate the

transaction. Once the code is entered, the buyer can also choose to pay the bill

using either credit card or bank or the service provider. The entire transaction

is completed within seconds and is completely foolproof.

Apart from Smartcash, E Cube is banking heavily upon

Smartcell as another killer application. "This is a turnkey solution which,

enables cell operators to provide menu driven services like mobile banking,

account balance, bill payment, fund transfer, cheque clearance, railway timings

and much more. The underlying platform is the ever-popular SMS," explained



"We have already tied up with a cooperative bank and a

nationalized bank and once, one bank realizes the potential, others will also

jump into the fray," said a confident Shah adding that each bank has a

potential of generating business worth

Rs 8-9 crore.

According to him, while Smartcash involves active tie-ups

with banks, Smartcell bypasses banks at this juncture and operates directly

between E Cube and the partner vendors. While E Cube has already taken RBI

approval for the same, it has also tied up with BPL Mobile and Cadbury India to

soon launch India’s first SMS-enabled chocolate vending machine in Mumbai.

E Cube is also tying up with Idea Cellular to expand the

market for such services. Besides, talks are on with JK Ansal to set up a condom

vending machine and with UB Breweries in Delhi to set up a similar beer vending



Waiting for the take off

Going by the existing market dynamics, E Cube is attempting to achieve

something, which has not made much headway in the country so far –

popularizing smart card usage through optimal technology. However, if the

company gets it right, it will not only expand the market for smart cards with

more players being drawn to this sector, it also stands to reap rich.

No wonder then, Shah prefers to term it as the take-off stage

for E Cube, which has so far been busy putting infrastructure in place.

"This is a crucial year for us and we expect to double our turnover from

the existing Rs 1.20 crore to Rs 3 crore in 2004-05 and double it again the next

year," he said.

Hope Shah and E Cube prove it right. Binu Alex (CyberMedia