Cardis to Launch Low-Value Payments Platform in U.S.

February 11, 2014

Cardis International is planning an April launch in the U.S. for its technology, which enables merchants to accept low-value contactless or mobile payments without incurring high processing charges. Cardis is able to bring down the processing cost of low-value payments, the company said, by aggregating multiple transactions into a single payment.

Amsterdam, Netherlands-based Cardis has been piloting its technology in Europe with Raiffeisen Bank in Austria and Sberbank in Russia. “We’re now focused on the U.S., as this is the fastest growing mobile payments market in the world, and there’s a huge opportunity here,” said Nebo Djurdjevic, Cardis’ CEO, who is based in Toronto. “We have integrated our technology with a large U.S. processor and with a major U.S. retail brand, which will be launching a mobile site and mobile app using our solution in April.”

The problem

Djurdjevic said contactless card and NFC-based mobile payments are typically for low amounts, and yet still use a card processing infrastructure that was designed 40 years ago when the average credit card transaction was $100.

Traditional card processing systems require each transaction to be individually processed through the payment system, including authorization, clearing and settlement. “The resulting variable costs of processing each transaction are independent of the transaction amount and too high for low-value payments, particularly in low-margin industries such as quick-service restaurants,” Djurdjevic said. “QSR restaurants often have a 3 percent profit margin, yet, for low-value contactless payments, the processing cost could be as high as 6-7 percent of the transaction value.”

Mobile and contactless cards offer consumers a convenient form factor. But they don’t solve the problem that low-value card payments are very expensive for merchants, Djurdjevic added.

 

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