Jul 21 , 2010
VendTek expands international prepaid processing
VANCOUVER--British Columbia-based VendTek Systems is taking its e-Fresh virtual prepaid card processing platform to international markets.
As well as developing and licensing e-Fresh, VendTek owns and operates the NPP (Now Prepay) processing network which connects to 15,000 POS locations in Canada and 800 locations in the U.S.
“Our business is about digitising cash,” says Nurez Khimji, chief financial officer at VendTek. “We take cash and use it for loading prepaid cards and prepaid mobile phones and for paying bills.”
e-Fresh can activate and process stored-value cards, including Visa and MasterCard prepaid cards and gift cards.
In December 2009, VendTek launched 3V Virtual Visa, a product that can be used for issuing Visa card numbers for use on the internet. The company has also just completed its software module for bill payment at the point-of-sale and plans to launch it in Canada and the U.S. this summer, Khimji says.
For the six months ended April 30, 2010, VendTek had prepaid revenues of just over C$60 million and a net loss of C$245,000. The majority of this revenue, C$58 million, was generated in Canada; C$2 million was generated in the U.S.; and C$700,000 was earned from license revenue elsewhere.
It is license revenue from outside North America that VendTek is hoping to grow. This is because the move from ‘hard’ prepaid cards to virtual cards is complete in Canada and growth opportunities are limited, Khimji says.
The market for prepaid mobile cards is 5 million in Canada and 40 million in the U.S., estimates Khimji. This is small compared to Nigeria, Kenya, the Middle East and Latin America where there are hundreds of millions of prepaid mobile users, he says.
To reach these markets, VendTek has been licensing e-Fresh to third-party companies who distribute prepaid cards and are looking for new ways of distributing their products. e-Fresh is now available in Nigeria, Thailand and the U.A.E. with services in Kenya and Swaziland expected to be launched in the next few months. In Nigeria, e-Fresh is being used for prepaid satellite TV services.
In China, VendTek has teamed up with Chinese IT company Nantian Electronics to create additional software for e-Fresh. This software will allow smartphones equipped with RFID (radio frequency identification) chips to communicate with POS terminals. Nantian will hold rights to the software in China, while VendTek will hold international rights.
Khimji says an un-named “significant” Chinese mobile operator intends to use e-Fresh for managing micropayments on POS terminals that will connect to hundreds of thousands of NFC (near field communications) enabled mobile phones.
Going forward, VendTek would like to set up its own operations in order to tap into the potential for the growth of prepaid cards in new markets, Khimji says.