Building a retail electronic
payments system from scratch is no easy task, even more so when it
is in Iraq, a country still recovering from the ravages of war. It
was a challenge Net1 UEPS Technologies took on in February
The US company was appointed by Iraq’s
government to provide a solution for state payments, including
grants to war victims and pensions and salaries for employees of
the two state banks.
Launched in August 2008, Net1’s smart
card-based solution has made remarkable progress, with the
millionth card issued at the end of 2009. Simultaneously, Net1
announced it had received an order for an additional 800,000
smartcards and 1,500 POS merchant store devices, in a step towards
creating a national payment system.
Net1 founder, chairman and CEO Serge Belamant
said: “We are in the early stages of creating a broad-based
electronic transaction processing platform. This will allow the
citizens of Iraq to receive benefits in a secure, cost-efficient
manner and also create broader access to additional, formal
At the heart of Net1’s solution is its
Universal Electronic Payment System (UEPS), which Belamant
developed and patented in 1989. It was, effectively, the world’s
first electronic purse.
UEPS uses smartcards that operate in real-time
but offline, unlike traditional payment systems that require
immediate access through a communications network to a centralised
This offline capability means that users of
Net1’s system can enter into transactions at any time with other
cardholders in even the most remote areas provided a portable
offline smart card reader is available.
UEPS found its first application in
the distribution of government welfare grants and pensions payments
in South Africa, where the company was originally domiciled and
still retains a major technology development presence.
The UEPS solution has enjoyed significant
success, and now boasts 3.8 million cardholders in South Africa as
well as deployments in some 19 other developing countries.
Outside South Africa, Net1’s first major
breakthrough came in 2001 when it was contracted by the Reserve
Bank of Malawi to implement Malswitch, a national ATM and POS
switching and smartcard payment system on the UEPS platform.
Among Net1’s recent successes was its
deployment in 2008 of e-zwich, a national smart card settlement and
switching system in Ghana. E-zwich is now the de facto payment
standard and provides inter-operability with, and to, all the other
payment systems, such as Visa and MasterCard.
In Russia, Net1 has deployed over 7 million
UEPS cards to customers of Sberbank, the country’s largest bank.
Called Duet, the UEPS system is also present in many former Soviet
Net1’s technological credentials were clearly
a major selling point in Iraq, a country in which fewer than 1
million people out of a total population of 24 million have a bank
The American Forces Press Service reported in
January that the ATM has finally arrived in the country with the
installation of 20 machines in the capital, Baghdad, a city with 7
The US Army has put its weight behind the
development of electronic funds transfers, which it estimates will
save US taxpayers
$20 million a year by reducing the heavy dependence on cash to pay