Dialing your dollars

According to Bryan Brennan, it’s not a butler, it will soon be your cell phone.
Cell phones, sometimes irritating and at other times life-savers, may become even more essential to daily life than they are already, says Brennan, a talkative 43-year-old Irish American who is a director of Ciphercom, a New York-based company that creates wireless payment systems for banks and companies around the world.
Crucial to wireless financial transactions are cell phones — they will become the handy electronic wallets, or e-wallets, that will allow the user to pay bills by phone, simply by pressing a series of buttons.
This is not new technology: the cell phone’s adaptation in this direction has been around since the mid-1990s. But it is only in recent years that its potential as personal financial organizer has been realized.
“Third World countries, not the U.S., is where this is taking off,” said Brennan, who runs the company with a colleague, J.R. Galang. “The big kick is in Eastern Europe and Asia.”
Poorer countries such as Vietnam or Poland often had poor or non-existent land telephone lines. Vietnam in particularly went from almost no telephone coverage to almost complete cell phone saturation in the last decade.
“Most of what you might call the poorer countries don’t have land lines, they just have cell phone networks,” Brennan said.
And that is where his company comes in.
“In Vietnam, there’s only cash,” Brennan said. “There are no ATM machines. So people have to line up for hours to pay their utility bills.”
M-Vietnam, the largest telecommunications company in the country, hired Ciphercom to install a payment network that will allow Vietnamese consumers to pay bills using their cell phones at their leisure.
Already, a similar system is working in the Philippines with about 1.4 million cell phone transactions per day.
More than 30 banks are involved with the Vietnam project, and the benefits to the customer are already clear, said Brennan.
“What we’re finding in the Philippines is that it’s really being used for bill payment, utility type bills,” he said.
A cell phone payment is nearly instantaneous, unlike credit card payments, which may take up to two days to clear, he added.
“The speed of the settlement is dramatically faster,” Brennan said. “It’s a real-time transaction.”
The cost is tiny, a fraction of the cost of a wire transfer. A text message costs a penny or two to send, and charging a fraction of that amount on the vast number of transactions that is expected in Vietnam, is where Ciphercom will make a profit.
“You’re bypassing the sales tax that goes to transfer companies,” Brennan said gleefully. “And it’s a data transmission, it’s SMS, it’s what people have been texting with for quite some time.”
What about security? Brennan, whose work background was in credit card payments, noted that any transaction by cell phone will require the user to enter a PIN number for approval.
“There is very little room for fraud,” Brennan said, grinning.
And, he mused, the technology could be soon applied to almost any type of transaction: airline tickets or dinner reservations, for example.
Less appealing is the concept outlined recently by high-tech commentators that one’s cell phone would one day ring with advertisements and special offers ever time one passed a chain store such as Starbucks or Barnes and Noble.
The U.S. will catch up with Vietnam one day, said Brennan, but “our payment infrastructure is so much stodgier here.”
Brennan and Galang hope to have their network installed in Vietnam and operational within a couple of weeks. Soon Vietnamese consumers will be paying bills, buying Coca Cola and even placing bets or playing the lottery, using only their cell phones.