Despite the fact that the shift to mobile payments has become clearer than ever, consumers continue to be concerned about their online security. Michalis Lois, General Manager, NETinfoPAY Ltd, is joining NPF & Regtech Leaders Forum 2017 to address the fears related to mobile security and share his insights on launching a startup in a niche market.

Michalis describes NETinfoPAY’s industry experience and shares his expertise in mobile payments

NEtinfoPAY Ltd is a startup wholly owned by NETinfo Plc, an IT company specializing in the provision of electronic banking and mobile payment solutions to the global banking and financial services industry.

Although NETinfoPAY is a newcomer in the payments market, it leverages on the mother company’s broad experience in serving the Banking sector and more specifically in the provision of mobile financial services. Mobile wallet deployments have already been launched by NETinfo Plc in the CIS region and the experience drawn from these projects is considered invaluable for the Cyprus project.

Adding to that, NETinfoPAY Ltd has been recently granted an Electronic Money Institution license from the Cyprus Central Bank and is in the process of launching electronic payment services in the Cyprus market through a mobile wallet.

There is an increase in consumer adoption of mobile payments/banking. How does NETinfoPAY fit into that and how does it relate to the 4th AML Directive?

The mobile payments and banking sector in general shows continuous growth over the years. The proliferation of mobile smart devices among consumers results in the steady growth in the adoption of mobile banking and mobile payments among the users of financial services. According to market studies this trend will continue over the next few years with millennials and young people being the clear majority of adopters.

The NETinfoPAY mobile wallet (m-wallet) follows this trend and meets the demands of the “tech savvy and millennial” consumer. It allows the user to convert cash to electronic money, store it in their mobile-wallet account and use their mobile phone to perform financial transactions such as: money transfers, retail purchases, transportation tickets, bill and government payments, plus, other social services.

With the 4th AML Directive, the EU is, among other things, implementing the stricter requirements of the FATF and is intensifying its efforts to effectively combat money laundering and terrorism financing.

NETinfoPAY allows for a comprehensive application of customer due diligence, risk-based approach and strong transaction monitoring, essential elements in the landscape of payments. Financial Investigation Units will be very satisfied to find that the NETinfoPAY system leaves no margin for money-laundering or terrorist financing, addressing many of the challenges traditionally found in cash transactions.

NETinfoPAY’s integration with the merchant PoS terminal brings an alternative paying option for over-the-counter transactions. Can you elaborate on this?

Our company has designed and manufactured a special electronic device (Merchant Device) that integrates and communicates securely with the cash registers’ PoS terminal.  

When the bill is issued and the specific payment method is selected at the PoS terminal, the customer simply touches the Merchant Device with his Mobile Phone and the bill information is displayed on the mobile device for confirmation. Upon confirmation, the transaction is sent to the MFS system for execution where the customer's account is debited with the corresponding amount of the payment and the merchant's account is credited.

The PoS terminal is notified by MFS for the successful execution of the payment as well as the customer with a message on his/her cell phone.

Moreover, this payment method does not require the customer's mobile phone to be connected to the cellular network or the Internet. All it takes is the activation of the Bluetooth protocol on their mobile.

As the number of consumers concerned with the safety of mobile financing continues to be high, list the safety features that NETinfoPAY mobile wallet includes

The MFS platform is a complete system for Mobile Financial Services, developed with market leading tools and adapted to international banking practices, providing the MFS users a secure, user-friendly and powerful tool for Mobile Financial Services, using a smartphone in any available mobile network. The main security features are the following:
 

• Secure registration, activation and deployment
• Only registered phone devices can perform transactions
• No personal and financial data stored on the phone. All account information is stored and managed within the central MFS Security server
• Sensitive data protected with PIN
• Transactions are protected with unique username and password
• Maximum authorized amount to be transferred per day and month
• Fraud prevention module based on: usage pattern, limits on transactions numbers and amounts
• GSM standard network ciphering
• No data is stored on the SIM or Mobile device

What are your general projections for the future of regtech and fintech over the next five years?

At NETinfo we believe that the growth of the fintech and regtech sector will continue over the next years. The implementation of the PSD2 (Revised Payment Service Directive) in essence puts a stop to the banks' monopoly on their customers’ account information and payment services. As the PSD2 becomes implemented, consumers and businesses, will be able to use third-party - fintech companies to manage their accounts. This, from my point of view, is a significant disruption in the banking sector since it allows fintech companies to penetrate the banking sector and especially the payments value chain. Likewise, regtech companies will find new ground to expand their services.

Regulatory monitoring, reporting and compliance issues will always be a major aspect in the finance industry. With the competition intensifying, it is only logical that financial institutions will continue to reach out to the regtech sector for automated cost-effective solutions to tackle their regulatory constraints.

Michalis Lois will share his expertise while networking with representatives from the EU Commission, European Payments Council (EPC), ECB, EPA, GRCTC, Mastercard and many others.