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Posts Tagged ‘Isis’

Battle at the POS Heats Up

November 13, 2012 in Uncategorized | Comments (0)

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In September of this year, mobile payments provider Square announced that it had raised $200 million. Investors included, among others, Starbucks Coffee Company—a surprise for many in the mobile payments industry, as Starbucks has been so successful with its own app.

The press release about the funding includes some impressive numbers. Last fall (2011), Square had about 150 employees and processed about $1 billion in payments (annualized). This fall, it has over 400 employees and processes over $8 billion in payments (again, annualized). Talk about explosive growth.

Square pioneered a new point of sale (POS) by allowing small businesses and consumers to accept credit card payments via their mobile devices. Several Square-like equivalents have popped up lately, including PayPay Here, iZettle in Europe and Tortuga in Asia.

Now it’s clear that Square is onto something new. Its Pay With Square app allows consumers to pay for purchases by simply telling the cashier their name. GPS and a few apps cooperate behind the scenes to take care of the rest—no credit card swipe required. (See my earlier post for details.)

Square’s success is certainly helping to fuel the battle at the POS not only in terms of where the payment is taken, but also in the method of payment. Back in May, Visa and MasterCard both entered the ring in an effort to defend their long-established market dominance. Each launched its own “digital” wallet service—not “mobile” wallet, mind you. Yet.

Visa’s solution, called V.me, is made for online transactions. It stores your credit card, billing and shipping details, allowing you to pay for online purchases by providing only your V.me email address and password to the merchant. It’s not tap-and-pay, but it’s a start. And the company says it plans to introduce the mobile aspect soon via NFC, QR codes or other technology that would allow tap-and-pay, scan-and-pay or something similar.

MasterCard’s answer is PayPass Wallet, which expands on the PayPass brand that does currently offer tap-and-go NFC payments (i.e. Google Wallet). The new addition, PayPass Wallet, is also geared toward online purchases, storing the necessary card, shipping and billing details and allowing you to check out faster, though via a special button on the websites of participating merchants (or in their mobile apps). And like Visa, MasterCard says it has plans to roll out to points of sale at some point in the future, but offers no specifics regarding timeframe or technology.

POS rookie Google Wallet continues to march on, working out the kinks, adding more credit cards, and steadily signing up merchants and users. One stumbling block continues to be the small range of compatible consumer devices. Isis, the NFC mobile payment joint venture between AT&T, Verizon and T-Mobile, just launched its pilots in Salt Lake City and Austin in October.

It’s an interesting battle to watch, and not only because of the different companies vying for control. Technology is developing so fast that NFC may already be yesterday’s news. We’re clearly still in the learning phase, with each solution providing valuable lessons for the next. Offerings are also moving from payment only to payment + additional value. And I think that “additional value” is the key to making mobile payments work. Check back soon for my follow-up post about how QR codes are entering the fray and may give NFC a run for it’s money.

Mobile Payments: Marching On

May 23, 2012 in Uncategorized | Comments (0)

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Leading up to the CTIA Wireless Event in New Orleans earlier this month, there was some anticipation around a potential update on the timing for widespread availability of a NFC mobile payment deployment from Isis, the mobile payments joint venture between Verizon, AT&T and T-Mobile. Not surprisingly, it looks like we will have to wait a little bit longer to hear news about when we may actually start to see real progress in the availability of NFC. But as we march ahead on the mobile payments battlefield, we need to look beyond NFC and ask ourselves who are the key industry players in the mobile commerce war? And are they doing enough to educate consumers about the service’s security features and their benefits? The answer: probably not.

There’s been a lot of chatter in the media about whether NFC could be the missing link the mobile payments industry needs to achieve widespread adoption, but we’re not addressing the fact that mobile payments do exist without NFC, and are widely adopted all over the world. Americans tend to have a limited view of the world, so let’s take a look at our own market. Here, in the U.S., the mobile payments ecosystem is disjointed. In fact, it’s a bit of a mess.
This year we polled attendees at both Mobile World Congress in February and last week at CTIA to try and uncover what industry experts believe is holding mobile payments back. And in both cases, the overwhelming majority (76% and 71% respectively) of respondents cited that perceived security threats and lack of coordination among key industry stakeholders are the main obstacles to widespread adoption of mobile payments.

Security isn’t a threat to mobile payments adoption; it’s the perception that mobile payments are less secure than traditional payments. To date, the industry has failed to establish clear standards and ensure that everyone plays by the same rules.

Which players in the mobile payments industry are likely to succeed in facilitating widespread adoption of mobile payments? Almost half of our respondents at CTIA (47%) believe that financial service providers such as the banks and credit card companies are most likely to succeed in driving adoption rates.
There’s a clear disconnect between the service that mobile payment players are trying to deliver, and what consumers understand to be the value or benefit. Part of the problem with mobile payments in the U.S. today is that the credit card system works. There’s no flaw with plastic payments as they are, but in order to entice consumers to engage in a new way of doing things, there must be an added benefit.

This year’s CTIA survey results reveal that there’s still an unwillingness amongst consumers to pursue mobile payment options, and right now they’re not very optimistic the industry will be able to come together in the next year or so to deliver enough incentive to make mobile payments attractive enough.
NFC could very well become a universal standard, but it’s far from a sure thing. 84% of those polled at CTIA believe it’s still at least two to five years away. With all of the different providers looking to compete in the mobile payments space, they will need to find a way to come together, interoperate and make life easier for the consumer.

Plastic payments won’t be eliminated, but the industry will need to facilitate an extension of payments beyond the credit card, giving consumers more options. And consumers won’t consider the mobile option until the industry works together to develop standards and they understand the benefits. Until then, we’ll keep marching on.