DigiMo Cracks The Code: Mobile Payments With No Point Of Sale Changes

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DigiMo, is a mobile payments platform that actually makes sense to me. When I sat down with CEO Yossi Yarkoni and VP of Marketing Nir Shimony at the Mobile World Congress to hear about their concept, which is piloting in Israel right now, the first thing I thought was “wow, why didn’t somebody think of this before”. It’s a pretty good idea and solves many of the problems that plague mobile, face-to-face payments.

It actually works with existing infrastructure and requires no Point Of Sale hardware changes by merchants. Really. No NFC terminals to buy. No new card readers needed. This is a major sticking point for merchant adoption of new mobile payments platforms.

How does DigiMo’s patented non-NFC reliant payments method work?

First, customers upload their payment credentials and account info to their secure DigiMo account in the cloud.

Next, DigiMo issues bank cards to merchants (instead of individual consumers like regular issuers). This special DigiMo card has a specific bin range. Participating merchants receive a DigiMo card and unique barcode/number for each of their Point Of Sale terminals.

Finally, at the time of a purchase, a customer uses the DigiMo mobile app to scan the barcode at the cash register. They then authenticate the app with pin or other security credentials which connects to their DigiMo account in the cloud. This info is sent to the cloud and lets DigiMo know at which unique cash register the transaction is taking place. The merchant closes the transaction loop by swiping the DigiMo card into the existing POS reader which rides the rest of the transaction on the regular card network and authenticates at DigiMo’s server and debits the customer’s account.

Boom. You’re done!

So that is the description of their face-to-face mobile payments solution but they also have scenarios for remote commerce, peer-to-peer money transfer and coupon/offers. These are all described in the video below.

They are currently trying to raise venture capital to bring their pilot to the U.S.A. I will be curious to see if this is a payments scenario that consumers could latch onto. My guess is that with digital natives this kind of thing will be all the rage.