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Goodbye PINs - U.S. wireless carriers are making the move to direct top-up by: Mark Flanagan - Intele-Card News, December, 2004 Wireless service providers in the United States have been slower to adopt real-time top-up transactions, also known as PIN-less delivery, than European and other international counterparts. But the value proposition for service providers to implement direct top-up solutions is very compelling. The general perception within the industry is that most carriers are moving in this direction, and direct top-up will soon become the industry standard. Market position Prepaid wireless is established as a fast-growing alternative option for consumers today. Both carriers and MVNOs clearly recognize the opportunity to win new customers from various niche markets closely aligned to the prepaid model. At the same time, management within these organizations finds itself under added pressure to reduce costs and increase the efficiencies of their programs to help ensure program success and profitability. Direct top-up will provide a platform to help meet these and other objectives, as prepaid wireless continues to capture more market share in the United States over the next two to three years. Metro PCS is the first and only service provider in the United States to exclusively implement direct electronic top-up transactions as its payment model. Metro is a regionally based wireless carrier that has an established network of authorized payment centers through payment-processing partnerships with two POSA providers, Q Pay and Universal Data Corp. There are several other national wireless carriers that have implemented direct top-up programs and several national carriers looking to launch top-up in the near future. Most, if not all, of these wireless carriers will be running their direct top-up programs parallel to their current hard card and e-PIN programs, but the long-term objective is to use direct top-up. Setting the scene When taking a look at the Tier 2 MVNO players, the current distribution model is quite different than the norm. Today, many Tier 2s, especially regionally based MVNOs, continue to distribute hard card airtime products to dealers, while POSA has remained a secondary method of distribution. This is contrary to the major wireless carrier prepaid programs, which have heavily embraced POSA and e-PIN distribution as the primary means to distributing wireless airtime services. The typical demographics of the dealers serving these markets are geared more to the cash-and-carry distribution model. These dealers typically are small independent operators, often located in inner city urban areas, and they are simply more comfortable with a physical inventory cash-and-carry model. It's clear that the lack of technology infrastructure supporting the electronic distribution of prepaid wireless products in these markets will be a factor in slowing down or impeding any type of transition to direct top-up. But, at some point, these service providers will be forced to transition to direct top-up once it starts becoming the industry standard.

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