The Initial DiscoveryIn April of 2004, I became aware of a company called iKobo as the result of a posting on Web Design Forums (http://www.webdesignforums.net), a website design discussion board. An individual who was new to the discussion board posted a series of comments regarding iKobo and its presence as a possible serious competitor to PayPal. Upon further research on the company, a series of other forum discussion board posts were discovered. Forum link examples can be found below:
The supporters of iKobo in these forums, as is seemingly the recurring trend, are new posters to the boards who elect to join and repeat various elements of the iKobo website (http://www.ikobo.com) ad nauseam. Said posts also contained affiliate hyperlinks and often made mention of iKobo's ten-tier affiliate program. For those of you who may not be familiar with discussion forums online, this is often considered to be a spam technique and may result in the poster being banned (as is the case in the Web Design Forums hyperlink above).In some cases, customers claimed to be able to develop anti-fraud mechanisms using iKobo's Instant Payment Notification (IPN) system. An IPN system is merely intended to notify the customer of a payment having been made by one of their customers and, as such, cannot be used to determine fraud.Ikobo BackgroundFrom the iKobo website (http://www.ikobo.com):"Our goal is to make people's lives easier." - Founding vision of iKoboTwo immigrants who understood the difficulties involved in sending and receiving money internationally founded iKobo in January 2001. Two successful years later, iKobo Money Transfer is now the fastest growing money transfer company in the world - experiencing an exponential growth rate. From the beginning the founding principles of the company have been: Cost - Providing a valuable service at a fair price to the consumer. Convenience - Allowing the customer to quickly and easily send money, while instantly receiving cash the moment it is sent. Customer Service - Commitment to educating the consumer, providing live telephone support, and dedicating all available resources to ensure piece of mind when sending and receiving money. Our customer service philosophy is catering to one customer at a time. The iKobo Money Transfer platform is designed to be the most secure platform in the world in order to prevent fraud and ensure that every customer transaction is protected. You can feel confident that your money is safe with iKobo. The iKobo TeamNot much information is revealed, other than a feel-good description that can be best characterized as "glittering generality". The lack of information is a recurring theme across the iKobo website; in many cases, two seemingly different aspects of the site, such as "What is iKobo and How Does it Work?" and "FAQs", are identical.The concept of iKobo's service appears to be very similar to that of PayPal, its closest targeted competitor. iKobo's system differs from PayPal in that the receiver is sent an I-Kard. The I-Kard is a VISA Electron/Interac card, which the recipient of funds may then take to a bank machine and make an ATM withdrawal. Because this is a VISA Electron card, it may also be used to purchase goods and service online; the recipient may alternatively elect to send money via his/her own I-Kard to other iKobo users. The fees for iKobo services are very similar to PayPal's; 4% ($2.00 minimum) is deducted for each person-to-person transaction, and 2.9% + $0.29/transaction is charged to merchants. Unlike PayPal, there is an additional $1.50 deducted for each ATM withdrawal and no mention of a sliding scale based on volume for merchants.Delivery options for the I-Kard vary in price; for many countries in Europe, the I-Kard may be shipped free of charge via express delivery. However, countries such as the United States and Canada, an express delivery charge of $9.95 applies.IKobo accepts VISA and MasterCard, but not debit card or banking information.iKobo caps customer sending and receiving at $200 USD per month; however, these limits may be raised at the request of the iKobo user if said user sends copies of various documents to iKobo (such as a driver's licence, utility bill, or note from a chartered bank indicating the customer's account is in good standing.) No explanation is given as to the usage of this additional information and why it is required.Hypothesis and Experimental PlanBased on the lack of information provided by both the iKobo website and its supporters, I was suspicious that iKobo was a disreputable service and that, as a sender, my money would not reach the intended recipient.Therefore, I devised, with the help of one of my staff, a controlled experiment in which I would send the staff member $10 USD ($10 USD being the required minimum for the first iKobo transaction) through the iKobo system. The staff member would in turn, sign up as an iKobo member and attempt to determine if he received the I-Kard and was able to cash it. In addition to the testing of the system, I would attempt to contact iKobo via the email address I obtained from a WHOIS lookup on the iKobo.net domain name (http://www.adamwebdesign.ca for more information on ADAM Web Design products and services.
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