Tag Archives: mobile payments

Are Mobile Payments Becoming Commonplace?

When making any kind of payment, consumers look for security and convenience in that order of priority. Cash and checks are the most secure forms of payment, but they are slowly on the way out due to the convenience of card transactions and the convenience of not carrying jingling change in your pockets or worrying about losing your cash to pickpockets. Credit and debit card transactions are on the rise, with close to 66%of all in-person transactions last year being completed with plastic cards, according to Javelin Strategy & Research market report on retail point of sale.

Add to this the smartphone proliferation into our day-to-day lives as we manage our communications, socialize with friends and watch or listen to entertainment on the go. The logical result of these trends would be the convenience of using a mobile or smartphone as a form of payment instead of cards or cash. There are many experiments, field trails and actual transactions already happening this way.

Let’s look at Google Wallet as an example. Google Wallet enables…..

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Mobile payments study kicks off 2013 research series on consumer payment, banking trends

Mercator Advisory Group has released the first of eight studies in its CustomerMonitor Survey Series 2013 Insight reports — “Mobile Payments 2013: Young Adults and Minorities Take the Lead.” Findings are based on primary research gauging consumer behavior and preferences in regard to various payment methods and banking channels.

The survey included 3,003 consumers in a representative sampling of the U.S. census demographic profile of American adults. Surveys were conducted online between May 28 and June 6.

The inaugural report analyzes the changing demographics of Web-enabled mobile users, and looks at aspects of use, interest and satisfaction with mobile devices in terms of both payment acceptance and payment transactions in-store and online.

As suggested by its title, the study revealed that young adults and minorities are at the forefront of mobile payments in terms of both use and interest.

They are also the most likely of all segments to be mobile-enabled: 75 percent of young adults; 73 percent of Asians; 70 percent of Hispanics; and 64 percent of Blacks own smartphones. This compares with an average of 55 percent smartphone penetration within U.S. adult households overall.  Continue reading

Banks intent on becoming pioneers of mobile payment systems

Some day, Canadians will have the option to wave their smartphones over a cash register and be on their merry way, instead of swiping and punching into a credit or debit card terminal or fumbling for wayward coins and cash.

When that happens, it won’t likely be the pioneers of Internet payments such as PayPal providing consumers with mobile payment options, analysts say, but rather a group of old-timers — the country’s biggest banks and telecom companies.

The struggle to corner the so-called “digital wallet” market is pitting the Big Six against foreign-run alternatives like PayPal and Square in their quest to offer the best technology to transact contactless payments using smartphones and tablets.

In July, Royal Bank of Canada became the second bank in the last 12 months to launch a mobile payment solution — an application that enables clients to pay for goods and services by tapping their smartphone against a terminal.

The launch by Canada’s largest bank followed Canadian Imperial Bank of Commerce (CIBC) and Rogers Communications Inc.’s joint venture to replace credit cards with smartphones last November. RBC’s digital wallet prototype will debut on devices from Rogers’ rival BCE Inc. Toronto-Dominion Bank is also testing different mobile payment options, while Scotiabank is developing its own version called My Mobile Wallet. Continue reading

Camera-to-Credit Card the Next Mobile Trend?

—Point, click and get paid?

That could be the next step in the evolution of mobile payments, as a new trend is allowing businesses to process payments by capturing a credit and debit card’s information with a phone camera. While this technology eliminates the need for awkward dongles or additional credit card-swiping hardware, it also may bring up a fundamental consumer security question: is it safe to let someone take a picture of your credit card?

“Our process just allows for it to read the card,” said Greg Goldfarb, co-founder and chief executive of Flint Mobile, a Bay Area startup developing such payment technology. “The information is uploaded through the phone and sent to the cloud. It is never stored in the phone.”

Flint’s mobile app — which uses the camera on an iPhone to “scan” credit or debit cards — launched in November of last year. Since then it has more than 100,000 downloads and business has increased tenfold since January, according to Goldfarb. In March, the company — which has nearly $3 million in funding — announced a partnership with NXGEN’s subsidiary Fidano.

“People have to be more and more self-sufficient in this world, and with this you just need a phone in your pocket,” Goldfarb said.

Flint is not the only player when it comes to no-swipe technology. Less than a year ago, PayPal bought one-year-old Card.io, which had developed a mobile payment process initiated by a smartphone capturing an image of a card and requiring no additional attachments. PayPal integrated the technology in its PayPal Here offering. Palo Alto-based Jumio also offers camera-to-card payment technology for businesses.

“My concern is consumer perception of someone using a camera phone to take a picture of their credit card,” said David Kaminsky, a senior analyst with Mercator Advisory Group. “I’m not saying it’s not secure, but rather what are people’s perceptions? That’s what’s going to matter.”

Rick Oglesby, senior analyst with Aite Group, said he agrees providers of such payment technology will have to eliminate consumer concern in order to find a niche.

“There is consumer sensitivity to this type of mobile transaction,” Oglesby said. “While the technology itself is secure, consumers don’t necessarily know that, so they get concerned about having their card numbers used in inappropriate ways.”

Goldfarb said while he understands the concerns, security is one of Flint’s top concerns. He said he knows continued growth in the industry will rely on consumers and service providers feeling it is safe to use.

“We’re in a pretty exciting stage,” Goldfarb said.

Goldfarb said Flint’s targeting non-countertop businesses — those run by the likes of accountants or photographers who normally go to their customers and are unlikely to have the technology handy to swipe cards.

“We are all about driving and enabling small business,” he added.

Still, not everyone sees a long life for such technology even beyond security concerns.

“I’m just not sure there is a market out there for it now,” said Kaminsky, adding the company’s hardware-free mobile payment technology doesn’t provide a huge benefit to businesses since merchants typically do not have to pay for such add-ons.

“While the technology does have some advantages, it does have some downside,” Oglesby said. “Transactions processed in this way are more expensive than transactions that are swiped, which makes it a deal breaker for larger merchants and large transaction merchants who will feel the pain from higher fees.”

Oglesby said such technology has proved better suited for smaller merchants, but that also provides a problem.

“It’s been very difficult to make any money in this micro merchant segment — not enough transaction volume to bring much revenue,” said Oglesby.

Camera-to-Credit Card the next mobile trend? Written by Chris Metinko. 2013, July 8. Retrieved from http://finance.yahoo.com/news/camera-credit-card-next-mobile-095500564.html.

CES 2012: Ebay, PayPal Investing Heavily In Mobile Transactions

The mobile payment industry is booming and the eBay company is at the center of it. EBay was involved in two industry panels during CES that discussed the future of digital and mobile payment industries. The company was able to announce record mobile payment volume.

The Ebay Ink Blog was kind of enough to recap the panels that Ebay was involved with. The first panel was PayPal at “Mobile Payment Basics: How the Technology Works.” The title sounds like a boring introductory course, but it turned into a discussion on the pros and cons of the “wallet in the cloud” versus NFC solutions for mobile payments.

“We see the wallet in the cloud as the best way to bridge the gap between the online and offline world,” said David Marcus, VP/GM of Mobile for PayPal.

Andrew Paradise, CEO of Aislebuyer, agreed saying, “If I lose my iPhone, I don’t want to have to cancel all my credit cards. It would be no different than losing my wallet.”

Bill Gadja, Head of Mobile for Visa, was more in favor for NFC solutions, but said that “whatever technology we end up using, it’s all going to come down to the widespread education and adoption by the individual merchants.”

All at the panel agreed that 2012 may very well be the year of the digital wallet. Paypal used this to announce that their mobile payment volume had reached $4 billion, a huge increase from the original prediction of $1.5 billion.

The second panel, aptly named “Planet of the Apps,” included the eBay company proper with Steve Yankovich, VP of Ebay Mobile, speaking on the panel.

The panelists discussed trends in mobile apps in 2011, but Yankovich stressed the importance of QR codes in 2011. He predicts that the next big trend will be apps that utilize the camera on mobile devices.

Chris Hercik, Creative Director at Sports Illustrated, said that organizations need to adapt and react to shifts in consumer behavior. He presented the example of readers using the Sports Illustrated mobile app are asking for interactive ads instead of having to reject or be put off by them.

Yankovich went on to equate eBay to plumbing in that they only exist to connect the buyer to the seller.

eBay, like PayPal, did well in mobile in 2011 as well. The company’s global mobile gross merchandise volume reached $5 billion in 2011.

CES 2012: ebay, Paypal Investing Heavily In Mobile Transactions. (2012, January 11). By Zack Walton. Retrieved from http://www.webpronews.com/ces-ebay-paypal-2012-01.

4 Payment Industry Predictions For 2012

With all the innovation in technology and business as well as new consumer behaviors, it’s sometimes difficult to separate what will shape the future of payments from what is just hype. By closely examining “innovation clusters” — that intersection of new technology and consumer simplicity that signals that a payment innovation is ready for prime time, the picture can become a bit more clear.

We see hundreds of great ideas, but only a few have the right combination to get traction and scale right now. With that in mind, here are a few predictions for the payments industry in 2012.

Mobile payments continue to skyrocket

We got a taste of mobile payments growth in 2011, and this growth will continue. The mobile industry is shifting into “third gear,” with smartphone penetration reaching global scale and well on the way to becoming the dominant connected device for 2 billion+ people over the next few years. Add mobile innovations like the iPad, which has already become the fastest adopted electronic device in history, and mobile is really hitting its stride.  The future of computing is happening now, and quickly reaching a level of scale to enable global innovation.

Although scale is impressive, the true power of the connected mobile device lies in how dramatically it is changing consumer behavior and disrupting existing franchises. Use an app like Uber to get a town car, and you never do it the old way again. The new Nordstrom iPad App replaces a salesperson with a whole new in-store experience. Living Social can fill a restaurant in hours with a mobile offer, allowing local restaurants to skip the process of building a website. Payment helps accelerate these models through convenience and accessibility and, in turn, is forced to innovate itself to keep up.

Don’t think that mobile devices will be your future identity? Try spending an hour walking around without your phone, wallet, or keys. I barely made it to the end of the block before the panic set in. That was not the case just two years ago.

 A fuller integration of the online and offline commerce worlds

When we talk about the blend of online/offline in terms of commerce, we tend to focus on the ability to find local inventory or scanning a product in store. In truth there is much more happening here than that. In 2012 we will see a rise in virtual currencies and the ability to use them to pay for “real” goods. Imagine paying for groceries at Safeway with Facebook Credits or using extra frequent flyer miles for that cup of coffee at Starbucks. If you are 15 years old with no credit card or bank account, this future needs to be here yesterday, and retailers looking to attract the young digerati, who already switch seamlessly between their online and offline lives, will welcome virtual currencies with open arms.

Social commerce has seen some exciting developments recently that show more ways that the online and offline worlds are becoming more closely integrated. We just watched Louis C.K. disrupt the media industry by profitably producing and selling a comedy special directly to his audience through his website, clearing more than $1 million in 12 days. Zynga justwent public at a multi-billion dollar valuation, thanks to its ability to sell digital tractors and barns to its ever-expanding user base. It’s not hard to imagine more social commerce innovation, such as person-to-person payments of non-cash currencies (“Help me fly to visit my mom by lending me your miles”) or creating massive fundraising movements (“Take a photo of my charity road race number so you can donate directly to my cause”). The possibilities seem endless — and are incredibly powerful if you think about it.

As our online and offline worlds continue to merge, the war of commerce will land right on the doorstep of small merchants. In early December, Amazon offered to give consumers a store credit of up to $5 if they used the Amazon Price Check app to scan in the price of a product in a physical store. And that’s only the beginning. Small merchants will need to adapt, while at the same time making sure the online world doesn’t drown them in fraud. Louis C.K. isn’t crazy to go direct to his fans — those who don’t know their customers and communicate with them regularly will take a beating from competing on margins in this connected economy.

Birth of alternate commerce devices

I’m a big believer that a key driver of payment innovation is going to be the enabling of alternate commerce devices. We’re seeing requests for payment capabilities on everything from gas pumps to Laundromats. As all devices become “smart and connected,” it provides more consumer choice and enables the digital wallet in the cloud to show its true value.  I know we all can’t wait for the day that we don’t have to clip coupons and remember loyalty card numbers, and our wallet intelligently figures out how you should pay for things. 2012 will see this come to life in many forms, and the “a-ha” moment around digital wallets will make sense to many. As payments move to the cloud, essentially anything with an “on” switch and an IP address can become a payment device. Think about Samsung’s Wi-Fi enabled refrigerator or cars from manufacturers like Cadillac and Audi. It’s a small jump to turn them from Internet enabled to Internet-payment enabled.  And, this experience is already making its way into our living rooms with t-commerce (commerce from your television).

I think 2012 is also going to be the year where t-commerce will happen. Yes, it’s been talked about a lot, but the pieces and players are beginning to fall into place more so than ever before. eBay’s recently updated mobile app for the iPad includes the ability to “Watch with eBay,” so I can watch my favorite sports team on TV and buy the latest jersey, all from my couch. (Note that PayPal, my company, is part of eBay.) By this time next year, you should be able to buy from your TV as easily as changing the channel. Scary to imagine, but you would do it, wouldn’t you? If a signed Jimi Hendrix guitar popped up for auction while I was watching his biography, I’m not sure if I could control myself.

These are exciting times for consumers, and it’s bringing a ferocious level of change to a payment industry that quite frankly could use it. 2012 will provide enough innovation clusters to give this industry a good shake. It’s exciting to have a front row seat!

4 Payment Industry Predictions For 2012. (2012, January 7). By Scott Dunlap. Retreieved from http://gigaom.com/2012/01/07/dunlap-paypal-payment-predictions/