Epic Lanka brings next level of e-payments with Epic Mobile Wallet

By Hiyal Biyagamage

The battle among financial institutions to pocket the billions of rupees changing hands in the retail market is never-ending and aggravating, with corporates ascending new systems to win over consumers and business owners. With new players joining the ring, the battle seems to have just started and promises to get bigger.

Cash still remains the most preferred payment mode in executing retail payments in Sri Lanka and account for more than 90% of all retail payments. Payment cards also play a significant role in the local retail industry. According to the Central Bank of Sri Lanka, more than 800,000 credit cards have been issued within the first quarter of 2016 and the total value of transactions amounts to Rs. 65 billion. 

However, many companies in the country have realised that the good old days of using cash and cards to complete transactions are gradually becoming insufficient; it is no longer enough. Sri Lankans are increasingly showing interest over completing transactions electronically.

Overall, the country has not seen an increased activity in this space but the industry foresees a profound shift in Sri Lanka’s electronic payment market over the next few years. During the past few years millions of consumers have been enjoying the services of mobile phone-based payment mechanisms and e-money systems to settle utility bills and execute mobile money transfers. This is just an insignificant percentage of what consumers expect from electronic payment platform providers. Rather than just stopping at transferring money, Sri Lankans want to move forward and enjoy a plethora of services from a solid electronic payment solution.

Epic Mobile Wallet

In such context, Sri Lanka’s premier Fintech solutions provider Epic Lanka has introduced Epic Mobile Wallet, which transforms your mobile phone into a digital and more secure version of your traditional wallet. It is also the world’s first solution that facilitates both payer and payee features in a single application, effectively converting each wallet into a potential merchant.   

Daily FT had the privilege of meeting Group Director and Chief Executive Officer of Epic Lanka, Viraj Mudalige, to discuss the ingenuity behind this product. Viraj is the chief architect of many award winning payment solutions including the wallet concept at Epic Lanka and he explained the strategy behind the Epic Wallet.

“Epic Mobile Wallet is a world’s first which transforms your mobile phone into a wallet to fulfill payer and payee requirements by integrating digitally-enhanced characteristics and world-class security features. As a company, we are passionate about elevating convenience in people’s lives. A traditional wallet is stacked with debit and credit cards, notes and coins and the simple fact that a single user has to remember six to seven different PIN numbers is headache-inducing. Take the bank’s perspective; for each payment card they issue, it involves a string of activities, from printing PIN mailers to delivering the card to a user, which is a cost burden for a financial institution. Looking at these instances, we thought of introducing a single, convenient payment instrument and we figured the best way to introduce it would be to integrate the functions of the said payment instrument into a user’s mobile phone. That is how Epic Mobile Wallet came into being.”

Epic had one burning question to address while developing the mobile wallet. Once all financial data is exported into the payment instrument (to the mobile), what would it be able to do? What would be the key functions? Wallet apps in the market come with limited functions that address a small portion of customer requirements. Epic Lanka had to be smarter in what they offer. 

“The beauty of Epic Mobile Wallet is that it enables users to integrate all payment instruments such as credit cards, debit cards and CASA (current accounts and savings accounts) into a single platform and on existing infrastructure. There is no punching and swiping involved; you only have to download the app, authenticate yourself by connecting to the core banking system, extract necessary financial information without storing them in your mobile. The feel you get with your physical credit card or the passbook will not be there. The customer on-boarding is seamless without any complex registrations.” 

Another interesting feature of Epic Mobile Wallet is that it lets the users predefine their payment methods. Imagine you are at a supermarket. When you reach the cashier to settle your bill, you can use your Epic Mobile Wallet to interact with the cashier’s PoS (Point of Sales) machine and these two will be connected via NFC. The system now knows you are at this particular supermarket and now you can predefine the way you are going to pay the final bill – by using your credit card or your savings/current account.

The app uses secure logins with PIN and biometrics. Viraj said: “A majority of people hate to keep many PIN numbers memorised. Hence, we have introduced the PIN as a traditional mode of authentication and biometrics as an advanced method to verify yourself – thumb, face and voice recognition. The beauty of our app is that a user can predefine the mode of authenticity as well. If you are spending up to Rs. 1,000 at a shop, you can predefine your app in a way where it does not need any authentication to proceed with the payment. If it exceeds the amount, you can implement a PIN number and if it is a transaction with a higher value, you can use biometrics. Based on your requirements, you can predefine the way of authentication, conveniently.”

Multiple modes to initiate transactions

Epic has introduced a ground-breaking tokenisation mechanism with the development of Epic Mobile Wallet. This patent-pending technology ensures that no card/account information gets stored on the phone or any other database but yet allows any enrolled instrument to make merchant payments via NFC (Near Field Communication), mobile number key-in (for non-NFC phones and PoS machines), payment tokens and dynamic and static QR codes.

The Epic Mobile Wallet uses two types of tokens: event-based and time-based. Viraj explained these two types using two examples.

Event-based tokens: For a particular transaction, a user can issue a token. A user sends his driver out to pump petrol with a Rs. 5,000 token. The user however defines a specific cap limit of Rs. 3,000. If the transaction exceeds Rs. 3,000, the user needs to approve the transaction. The final amount has now come up to Rs. 3,500, which is above the cap limit. When that happens, it will be redirected to the Mobile Wallet app of the user in a form of pop-up message. The PoS terminal used at the petrol station is connected to the bank and the bank recognises the cap limit and other details of the user. When the user receives the message, all he has to do is approve the transaction via his Epic Mobile Wallet app

Time-based tokens: Many payment card users have supplementary cards. For example, a user has a principal card and he has given his supplementary card to a family member. The supplementary card has a given flow limit to do transactions and using a time-based token, the user can now limit any unwanted transactions and control the financials of the card.

Usage of personal digital devices is growing exponentially and the mobile connectivity makes people attend to multiple tasks irrespective of where they are. Producers of goods and services around the world are trying to engage with this ever-increasing segment of potential clients resulting in newer business models, emerging brands and some losing their empires. The mobile wallet is an opportunity for bankers to attract and retain this market segment before it is too late.

Connecting existing infrastructure at zero cost

Point of Sales (PoS) terminals were introduced to Sri Lanka in 1994 and at the end of the first quarter of 2016, eight licensed Commercial Banks and one Private Company have been licensed to function as Financial Acquirers of Payment Cards. Central Bank statistics show that nearly 44,000 PoS terminals have been in operation during the first quarter of 2016 and the total transaction value from those terminals sits at Rs. 81.9 billion.

Epic Lanka has the biggest share of these PoS terminals as an organisation in Sri Lanka (nearly 99% market share). At zero cost, they have been able to connect the mobile wallet app with these terminals.

“The entire chunk of PoS machines gets updated in no time; no other organisation in the country could bring them into the electronic payment market in such a quick manner. Not only that, we have integrated our back-end with most of back-end solutions of Sri Lankan banks. Whether it is related to core banking, ATM switch, loyalty systems, leasing schemes, etc. we have integrated a majority of those functions. Therefore, we can initiate transactions in real time and we guarantee that a transaction will be completed within three seconds, irrespective of the location. To facilitate the app, we did not have to build a new product since we have the clear leadership in Sri Lanka’s PoS market,” said Viraj.

Taking electronic payments to grassroots level

Epic Mobile Wallet significantly expands the reach across merchant segments covering socioeconomic layers. Epic Lanka believes that merchants at the bottom level of the pyramid have been constantly missed out and left behind by financial institutions. Viraj is optimistic that their mobile wallet app will narrow down this digital gap and help those merchants to be included in the whole gamut of electronic payments. 

“We have rolled the payer and payee functionality into one platform so that every wallet user can effectively be a merchant. Over the years, we have neglected merchants at the bottom layer of the socioeconomic pyramid and institutions have failed to convert them to use electronic payments. With the Epic Mobile Wallet, grassroots level merchants like taxi drivers, bakers, tailors, vegetable and fruit vendors, milkmen, etc. can benefit greatly, even if they do not have a sophisticated smartphone. All they have to do is register with a bank and the bank will generate a unique, static QR code which includes the merchant ID, bank code and the unit ID. A user who has the mobile wallet needs only to scan this code and enter the transaction amount. The merchant will be notified within seconds and the money will get deposited in his bank account,” Viraj opined. 

“We are addressing professionals such as doctors, tuition masters, designers, copywriters, etc. through our app. They could either use NFC or dynamic QR codes to accept payments from their clients. The versatility it brings is absolutely significant from a merchant perspective.”

Apart from the traditional PIN and biometrics, Epic Mobile Wallet has been further strengthened by Epic’s Terminal Line Encryption (TLE) solution. It ensures the utmost protection for banks, merchants and users of electronic transactions from fraudulent transactions.

“In Sri Lanka, we are handling more than 200,000 transactions throughout our TLE platform. TLE addresses important security malpractices such as eavesdropping, ghost terminal attacks, host spoofing and replay attacks and mitigates them at will. The TLE platform has been stimulated into our mobile wallet app which guarantees optimum security for our customers,” Viraj added. 

Imminent Sri Lankan launch 

The award-winning app was first integrated in the Maldives where the Bank of Maldives introduced it to its customers as BML Mobile Pay. Viraj said that it had an unbelievable acceptance in the Maldives and within the first few days more than 10,000 downloads were recorded. 

“People there loved how the app supports merchant payments using all their payment instruments on existing PoS infrastructure at any merchant outlet and they were quite impressed how an electronic wallet app could utilise all of their stored payment options by simply opening the app on their phone, entering a PIN, password, fingerprint or facial recognition and then selecting the card/account they needed to utilise,” said Viraj.

Viraj confirmed that a newer version of the app will be launched in Sri Lanka very soon, as they are currently discussing the options with a leading private bank.

“The introduction of the mobile wallet app will change the entire Sri Lankan payment ecosystem. We had many feedbacks for the solution after we integrated it in Maldives. With the gained experience and knowledge from that, we have smoothen our product in a broader way for Sri Lankans using new innovations and hope to bring a novel digital user experience for Sri Lankans.,” stated Viraj.

He went on to state: “At a time the banking industry is fiercely threatened by technology convergence allowing other sectors to encroach into banking, our mobile wallet is a never-to-be-missed opportunity for smart banks to stay safe in the market. Needless to say that first movers with our time-tested and world-class solution will be the banks that can face disruptions with confidence because we take them also to the same technology trend but in a more secure and user friendly manner.” 

Globally known airlines, especially in domestic segments, operate most modern aircrafts with no TV screens for each individual seat. Instead, they offer a wide variety of entertainment options which includes movies, interactive games, etc. where passengers use their own devices. BYOD is changing the way expenses are planned and managed across industry segments. Instead of complaining of increasing infrastructure and channel management cost, banks can adopt the wallet app to facilitate BYOD-based banking. 

The benefits include no congestion in bank branches, minimum physical interaction, the ability to maintain consistent quality of service, low CAPEX and OPEX resulting in low breakeven levels. Epic Mobile Wallet is ideal for a quick and stable start for banks that are attempting to devote more time to sales and marketing, shifting routine work to centralised back offices,. 

“We always stay tuned and have the exceptional capability of identifying technology and market trends well in advance. A good example is Epic Terminal Line Encryption which is a classic case study for Sri Lankan bankers where we saw the threat, educated the regulators, designed the architecture, co-created a world-class robust solution which was offered for trial runs to local banks with no commercial obligation resulting in the majority of banks using it for several years since then. And the impact to the economy, banking industry and individuals is substantial. Similarly, digital money from non-banks are around the corner and technologies are creating low-cost platforms to make financial intermediation possible by non-banks as well. There are social media networks which do this elsewhere. Epic mobile wallet is a timely call, maybe a final call, for all prudent bankers to adopt new technologies to facilitate customers and face the challenges of disruptions,” Viraj asserted.

The wallet has been developed for both Android and iOS platforms and supports English, Sinhala and Tamil. It won the gold award in the Financial Applications category and was named the Best Sri Lankan Software Application (overall gold) at the National Best Quality Software Awards 2016 and also clinched the runners-up award at the Asia Pacific ICT Alliance (APICTA) awards ceremony.