ProPay Social-Media Payment Tool Keeps Card Data Out Of Phones

Zumogo, ProPay Inc.’s new social-media payment tool for mobile phones, leaves out vital information that ProPay says some competitors leave in.

By not storing payment card numbers in the Zumogo app loaded into Apple Inc. iPhones, the independent sales organization eliminates the potential risk of exposing the information if phones are lost or stolen, says Chris Mark, ProPay executive vice president of data security and compliance.

“If it’s not on the phone, it can’t be stolen,” Mark tells PaymentsSource.

Lehi, Utah-based ProPay released Zumogo on Feb. 3 (see story). The app also is available for phones using phones using Google Inc.’s Android operating system, and ProPay says it will release a version for phones using Microsoft Corp.’s Windows 7 by March 31.

Zumogo customers enter their payment card information during the enrollment process using the app, but a secure ProPay server stores the number, not the phone, Mark says. The app generates a unique token that is used to complete a transaction, but not before the consumer has authenticated each transaction from within Zumogo, he says.

“There are a number of [product offerings] where the data is stored on the phone, secured by an app,” Mark says. “We feel removing the data is the best advice.”

Consumers control their interaction with Zumogo merchants, he says. “The consumer initiates the discussion with merchants,” Mark says. “The consumer has the opt-in, opt-out control.”

Once launched, the Zumogo app searches for participating merchants in a radius chosen by the consumer. Area merchants then can send in-app messages about coupons and other incentives to entice participants to shop at their stores, Mark says.

The value for merchants is the ability to communicate with prospective customers, advertise specials and, in the case of restaurants, potentially increase the rate of turnover at tables, he says.

The app is designed to help merchants increase their revenue potential, Mark says. ProPay chose restaurants as the first merchant type because choosing a place to eat is a social experience for many consumers, who also tend to respond to dining incentives, he says.

ProPay also can make money from consumer use of the Zumogo app and is evaluating several pricing models, Mark says.

One is to charge merchants a small monthly fee for the ability to advertise Zumogo acceptance and a processing fee, he says, declining to divulge additional details.

Merchants do not have to switch to ProPay for their payment processing to accept Zumogo transactions, Mark says.

ProPay also is evaluating distribution models and is open to talking with other companies to sell the service, Mark says. “We’re evaluating all options,” he says.

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