Airtel Africa, Standard Chartered Bank and Mastercard have come together to launch World's first virtual card that functions off a wallet residing on a mobile handset. This new innovative payment method is called as Airtel 1time Shopping card. You can think about this as a Virtual credit card of OTP system that you have seen with online banking. In Virtual credit card system, you can generate a single use credit card with specified amount of money and which is valid only for 2-3 days. After that, the card expires. Airtel 1time Shopping card is exactly similar to this concept.
Airtel would be rolling this out soon in Kenya. They will gradually expand into other parts of Africa. How exactly Airtel 1time shopping card works. Every time an airtel customer is shopping online he or she will be able to request on-the-fly a virtual shopping card. Airtel would then generate a special 16 digit number that enables the completion of transaction. I assume they also will generate a CVV number. Once the customer uses this card number and completes the transaction, he/she will get an confirmation SMS on his handset.
Airtel has not released any more details than this. We will have to wait to receive more details. But we can very well guess that Airtel is building a mobile payment system here. Recently, we read about Mobile wallet system announced by Airtel. In Airtel mobile wallet, you can preload certain amount of money by depositing equivalent cash in airtel relationship centers. This pre-paid credit can then be used to pay your bills at merchant outlets that accepts airtel money services. So, it looks like airtel is taking this system one step further with the launch of 1time shopping card. This virtual shopping card enables people with no bank accounts or credit cards to transact online.
As on today, The global unbanked population with mobile phones is expected to grow 70% over the next year to 1.7 billion people by 2012. That's a huge number of people. Even in India, there are more than 600,000 villages that do not have any proper banking system. Airtel with its deep customer reach is building some financial system for this unbanked people to use.
Overall, Airtel 1time shopping card fuels mobile commerce and extends the reach of payment system to unbanked people of the world. Brilliant initiative. Great going Airtel!