Entrepreneur wants to bring payment solutions to the masses with a simple new system promising both speed and security
Lars Olof Kanngard has a history of making technological breakthroughs. The Swedish entrepreneur claims to have introduced voicemail to the telecoms industry and devised the first public e-mail system way back in 1983 – years before the Internet came to prominence. But his latest boast does seem a little far fetched. Can he really turn his fledgling firm ViA into a transaction facilitator that will rival household names like MasterCard and Visa?
“Everything I have done in my life has always been in touch with the future. And I have brought it out from ideas to reality,” Kanngard tells 7DAYS. “But having done all this, I always had a problem with two things – transaction security and payments.”
Kanngard wants to bring card transactions to the masses, using the Internet and mobile phone networks as his infrastructure, and – following the recent cases of ATM fraud to hit the UAE – secure transactions at that.
His figures back up his logic when it comes to talk of competing-with the big boys. Banks and credit cards today handle 20 per cent of the world’s consumers, he says, while another 20 per cent are so poor so they will never handle significant values. Kanngard’s target is the emerging markets making up the remaining untapped 60 per cent – people who currently don’t have cards but could benefit from them, since they are a safer alternative to cash.
He is starting out right here in the UAE next month, initially focusing solely on payroll cards, having captured the interest of local employers. “We have a few hundred thousand workers in our contracts whom we will start to give cards to in December,” Kanngard explains, adding that he expects over half a million to be signed up by the middle of next year.
Each employee will be given a VIA-branded card, and their salaries will be paid by their employer into Via’s pool account held at a bank. Workers can use the system to send money home to a pre-defined person – probably specified when they joined the company. Kanngard dismisses the threat of mobile, phone remittances, claiming they are “not secure so they will stop them quite quickly.
“I haven’t seen a secure solution yet,” he adds.
But besides workplaces, VIA is also distributing its own point-of-sale (POS) terminals at local merchants where low-income workers do their shopping – outlets which do not have card payment facilities. “Since ours is not a credit card, it is Shariah compliant and the shop will get the money the same second you are there – not a few days later, hence the name Virtual Instant Access (ViA).”
A recent survey showed massive interest from merchants in the concept. And while it is the merchant who pays a small percentage of every transaction – not the consumer – the main advantage, Kanngard claims, is the added security with his patented Secured Transaction String (STS) solution, where data is separated into three blocks, encrypted, and unlocked on a need-to-see basis.
Kanngard thinks other firms have not given due thought to how to secure a transaction. “Today when you swipe your card in any POS terminal around the world, all your card data is distributed as one record,” he says. “Even on a protected line between your computer and my computer, when it reaches my computer I can see the data. My simple idea was to divide the information into blocks.
“Why the heck do all these people involved in the transaction need to see your credit card number? ” The only thing they need to see is the first six digits, which tell you which bank has issued the card. The only one who needs to see the full number is the bank.” The sensitive information is sent in the third block, but ViA has gone to several levels of encryption to secure it.
“What we have now done – what nobody else in the world has done – is use a special processor for encryption on our smart-chip. So when you insert a ViA card into a terminal, the terminal will not even know your card number. We are creating all the protection at the card level. We don’t share information with the terminal that we shouldn’t share. If you don’t give out the information, it can’t be compromised.” He describes the system as like leaving your wallet at the door.
And ViA may yet make it to the ATM level. Kanngard has pitched his idea to the country’s central bank. “If they like it… they could impose it as a mandatory thing for the whole UAE,” he says. For further information visitwww.via.ae