DeviceFidelity is relaunching its Moneto mobile wallet, and this time around it lets users transfer funds to other Moneto users' prepaid accounts.

The fee structure also has changed, with reduced prices and the potential for free use with sufficient spending.

The changes reflect feedback the company received during a market test earlier this year, Amitaabh Malhotra, DeviceFidelity's chief operating officer, said in an interview.

DeviceFidelity in January worked with Spring Card Systems to create the Moneto mobile wallet, which supports MasterCard PayPass contactless payments at the point of sale. 

In the relaunch, which commenced Aug. 28, Spring Card Systems is out, and DeviceFidelity is the program manager.

"We own the entire Moneto program," Malhotra says. "It just made sense for us to own the entire program end to end to support all of the features that we're planning."

First among those is the person-to-person payment feature, where one Moneto user can send funds to another's Moneto account for free by entering the recipient's administration number. After the user verifies the recipient's name and enters a passcode, funds show up in the recipient’s account in a matter of seconds, Malhotra says.

Parents may use the free transfer feature to manage their kids' spending, and companies may use it to reward employees, he says. Employers can send funds simultaneously to multiple employees after securing their admin numbers.

"It's any scenario one might think of where they want to send money from one place to another," Malhotra says.

In the next few weeks, DeviceFidelity will roll out an enhanced person-to-person funds-transfer feature that works outside the Moneto program. It also will add a rewards program, and more functions are in the pipeline, Malhotra says. He declined to go into specifics.

"Our goal is to make this a full mobile-commerce platform that allows users to do whatever they would do with a payment, mobile banking and wallet function," he says.

Moneto users receive a prepaid MasterCard magnetic-stripe card tied to the same prepaid account as the wallet. Hometown Bank in Kent, Ohio, issues the card, and TransCard LLC of Chattanooga, Tenn., processes the prepaid transactions, Malhotra says.

Under the new fee structure, Moneto users pay no monthly fees if they spend $300 or more per month. Otherwise, they pay $2.95, down from $4.95 previously, Malhotra. The first three months are free.

"It's a little bit more in tune with the feedback we were getting from the market," Malhotra says. "And it's similar to other prepaid card programs."

Prepaid card companies have been under growing pressure to reduce their pricing

ATM withdrawals with the card cost $1.50 domestically and $2 outside the U.S. ATM balance inquiries are free, as are signature- and PIN-based purchases. Electronic bill payments cost $1.50

Other changes within the app include some adjustments in the sign-up process. Also, each time the user makes a contactless transaction, an icon in the transaction history notes it as such, Malhotra says.

DeviceFidelity also upgraded the microSD chip its payment system uses. It now provides four gigabytes of memory, up from one gigabyte previously, to support more user storage of pictures, music and other items.

New customers now pay $29.95 for the microSD chip. iPhone users, who previously paid $79.95 for an iCaisse4, now pay $59.95. A version of the case that also has a battery backup, the iCaisse4X, costs $79.95.

With each purchase, DeviceFidelity deposits $10 in the prepaid account.

DeviceFidelity is providing existing Moneto customers free upgrades and new microSD cards. Nothing changes in the iPhone cases, but users will need to change the microSD card.

Though the contactless chip now just emulates the prepaid card, an upcoming chip for the iPhone case will support Near Field Communication functionality so it may upload data from other NFC chips, Malhotra says. Merchants, for example, would be able to send coupons or other offers to customers' wallet chips.

The company is launching a promotional campaign in cities where PayPass acceptance is relatively strong, including New York, San Francisco, Los Angeles and Chicago. The promotions will include a mix of online, print radio spots, Malhotra says.

Todd Ablowitz, president of Centennial, Colo.-based Double Diamond Group LLC, notes that the mobile-wallet market is very competitive, and DeviceFidelity is reacting to the competition.

"The key is to see what it is consumers find of value, and then grow that," he says. "If DeviceFidelity has found something that consumers are excited about, then that will become clear as they grow the product," he says.

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