A few weeks ago we reported on the success of the Raiffeisen Bank’s NFC experiment in Austria. Raiffeisen launched an NFC payment service combining Visa’s V Pay debit card and technology developed by Cardis and tested it among its employees in the Austrian city of Linz. Now the Bank is claiming that their CardMobile service could reduce merchant transactions fees by 70%.
Aggregating low value transactions, thus eliminating the need for individual authorization for each transaction, would contribute to the reduction in transaction fees, the Austrian bank says. The application is topped-up – the single payment authorization – and then the customer uses up his credit without the need to authorize each small transaction. Customers would nonetheless still have access to each individual transaction through the transaction history on their CardMobile app.
For merchants low value Cardis payments remain in their system until the end of the day when the funds are transferred in one single payment – reducing transaction costs for them too. Raiffeisen Bank’s business model is very interesting for merchants, particularly small retailers, who will be able to benefit from contactless payment at a low price, provided CardMobile becomes popular enough to reduce costs. “The scale of the cost saving depends on the distribution of CardMobile,” Raiffeisen told NFC World “It is a matter of the economies of scale. We estimate that Cardis technology can allow a cost reduction up to 70% for small transactions”.
