Tag Archives: mobile payments

Discover Teams Up with PayPal [2023 Update]

The Official Merchant Services Blog continues to shine its spotlight of educational information directly on the Mobile Payments Industry. This bristling business sector keeps creating buzz among payment processing persons as well as overall economic assortments. One minute people are predicting hundreds of billions of dollars in revenue will get generated by consumers embracing the cashless society model and conveniently swiping their phones to pay for every little thing that catches their eye. The next minute people are predicting U.S. consumers are too wary and cautious and not ready to expose their information to the cloud and the criminals trying to crack their way into that cloud.

This titanic tug-of-war between “the next big thing” that economic analysts desperately desire M-Payments to become and the “hold your horses hombre” caution that those same analysts caveat the slow acceptance in U.S. markets has been defining the media coverage of the Mobile Wallet Madness for more than a year. But the potential for prodigious profits has pushed the possibilities of mobile payment processing through the morass of misgivings.

Merchants United!

As we purposely pointed out to our peerless readers just mere days ago, the Merchant Customer Exchange was formed. This epic assemblage of retail industry giants teams Wal-Mart Stores Inc., Best Buy Co. and Target Corp, 7-Eleven Inc., Alon Brands Inc., CVS Caremark Corp., Darden Restaurants Inc., Lowes Co., Sunoco Inc., Sears Holding Corp. and the Publix Supermarket chains into a mega-group of retail merchant might on a mobile wallet mission.

Coming on the heels of Visa’s saturation of the 2012 London Olympics with all things Mobile and all things Visa, the mighty mingling of the MCX merchants applied unforeseen amounts of pressure on the mobile payment marketplace.

Mobile Payment Paring: Discover and PayPal

On August 22 PayPal, owned by eBay, announced a deal with Discover Financial Services to bring PayPal access to the 7 million merchants in Discover’s network. This deal will begin in the second quarter of 2013 and the announcement was made a mere two weeks after Square partnered up with Starbucks to let customers pay with Square’s app at the 7,000 U.S. Starbucks locations.

Excelsior! Retail titans are teaming up with mobile gadgeteers in one mass scramble to make it to market before the U.S. consumer becomes firmly affixed on the easiest and most widespread brand — as is wont to happen with U.S. shopper market behavior.

The PayPal deal is a particular point of note because PayPal itself is pushing from the online marketplace back into the physical realm of brick and mortar. This may indeed help bridge the gap from e-commerce to old fashioned commerce, and that bifrost of payment processing could very well buttress mobile payment processing in a brave new world of cashles-sness and contactless transactions.

The super-powered pairing of Discover and PayPal drove stock prices for each company, with Discover gaining 3.9% and eBay gaining 2.5% on the market the day the announcement was made. This arrangement will greatly accelerate PayPal’s in-store payment efforts. By riding on Discover’s network, PayPal can get into more locations and get there quickly. Best of all this movement doesn’t requiring any significant integration work by merchants. That potentially puts PayPal at a big advantage against rival mobile payment systems such as Google Wallet, Isis, and Square.

Discover is integrating PayPal’s payment system into its software, which will be uploaded to millions of point-of-sale terminals that support Discover Card payments. PayPal’s branding and rules will be presented to consumers who choose to pay in store with PayPal. PayPal currently has more than 50 million U.S. customers who will be able to take advantage of in-store payments.

Mega Retailers Jump into Mobile Wallets [2023 Update]

Today the Official Merchant Services Blog will continue with our Mobile Commerce theme. A group of 14 Major U.S. Retailers recently announced that they have decided to join forces and create their own mobile wallet application. The group, which includes Wal-Mart Stores Inc., Best Buy Co. and Target Corp., will call itself Merchant Customer Exchange, or MCX.

MCX has no official launch date as of today, but the merchants are determined to jump head first into the expanding mobile payments market. The network of merchants also includes 7-Eleven Inc., Alon Brands Inc., CVS Caremark Corp., Darden Restaurants Inc., Lowes Co., Sunoco Inc., Sears Holding Corp. and the Publix Supermarket chains.

Merchant Customer Exchange

MCX seeks to corner a piece of the mobile payments market, expected to balloon from $172 billion this year to $600 billion by 2016. The new merchant super group plans on offering a mobile-commerce solution capable of seamlessly integrating a wide range of consumer offers, promotions and retail programs. The application will be available through virtually any smart phone.

This move comes about a week after Starbucks announced partnering with Square, a mobile processing start-up that uses smart phone attachments to accept credit cards. Now MCX will not only compete with Square, it has taken away 14 potential partners from the processor. MCX is also bad news for Google, which has been expanding its own mobile wallet platform, called Google Wallet over the past year. Google Wallet uses NFC, or near field communication to transmit payment data from a customers smart phone to an NFC-enabled payment terminal.

Mega-Merchants

With these mega retailers coming together, a new perspective can be used to develop mobile wallet apps. The retailers want to focus on ease of use and security for the consumer.

“As merchants, no one understands our customers’ shopping and payment experience better than we do, and we’re confident that together we can develop a technology solution that makes that experience more engaging, convenient and efficient,” said Mark Williams, president of financial services at Best Buy.

Mike Cook, corporate vice president and assistant treasurer of Wal-Mart said, “the MCX platform will employ secure technology to deliver an efficiency-enhancing mobile solution available to all merchant categories, including retail stores, casual dining, petroleum and e-commerce.”

Now with many more contenders in the mobile commerce arena, the only thing consumers can do is wait for the dust to settle. The great race to mobile wallet supremacy has begun!Host Merchant Services will keep you up to date on all new technology developments and potential partnerships relating to the mobile payments world.

What Brand is Your Wallet? [2023 Update]

Today The Official Merchant Services Blog keeps examining the rapidly growing payment processing sector of Mobile Payments. With an never ending stream of deals being made by startups and established companies developing the latest gimmicks and technology to bring mobile payments and mobile wallets to the average everyday U.S. consumer driving the marketplace, it’s easy to get lost in a sea of mobile payment processing media hype.

In our blog yesterday we were able to see how some of that disconnect works. Visa pushed mobile payment technology aggressively at the London games. Their plans were almost scuttled by a malfunction with the processing terminals during a men’s soccer match between Great Britain and United Arab Emirates. The crowd was cranky as they were unable to pay for concessions using a mobile phone or a credit card. They had to resort to cash, and many patrons were unprepared for the anachronism.

This wrinkle in Visa’s mobile plans underscores how fragile mobile payment technology still is; and it also highlights how close we’ve come to a cashless society — the kind of society where mobile payments promise to be a thriving and convenient way to pay for goods and services.

The Knock on Mobile Wallets

The continued skepticism U.S. consumers have with mobile payments can be found summarized well in this L.A. Times article by David Lazarus. The main theme is something we’ve covered extensively in the past year: Mobile Payments are the future, but people are worried that the payment processing is not secure. It seems that for almost every story published about how mobile wallets are going to revolutionize e-commerce and make billions and billions of dollars in profit, there’s a story like this one that says consumers are worried about security, fraud and identity theft.

These are valid concerns. Much like regular old online shopping — which has become ingratiated into the average U.S. consumer’s shopping habits — the threat of tech savvy criminals stealing pertinent payment information is an ongoing issue. Everything from phising scams to data breaches affect e-commerce. But none of it has stopped the juggernaut from steam rolling consumer buying habits. Everyone shops online because of the ease and convenience. This is powered by how easy it is for people to be online, click some buttons and buy something. The power of convenience trumps security concerns.

This will happen for mobile wallets as well. Once the technology gets out in front of people they will flock to it because it is easy to use and available where they shop.

Convenience is the Key

So what I believe is the current obstacle holding Mobile Payments back from making a huge splash with U.S. consumers is the fractured marketplace. They’re not readily available at the store when you go there. There’s too many variations on the theme. And too many different companies trying to inject a new technological advance into the sector before it gets traction with consumers. We covered the top types of Mobile Payment technologies recently, and even keeping our analysis to just a few contenders we’re stuck noticing a competition between Near Field Communication driven “Swipe Phone” technology and QR-Code driven “Scan” technology.

iPhone 4S Drives Mobile Commerce

Recent reports by Monetate show it gets even simpler than that — Smartphones themselves. Gone will be the advertising slogan of Captial One, “What’s in your wallet?” that questions what plastic card you use. Instead it will be “What brand is your wallet?” Or rather, which smartphone are you using to pay for things with — iPhone or Android?

According to the data from Monetate, the answer used to be in doubt as late as Q4 2011; and is now a resounding iPhone by Q2 2012. Monetate released its E-Commerce Quarterly Report for the second quarter of 2012, and the figures showed some dramatic changes in smartphone usage driving e-commerce traffic.

According to the report, “Leading e-commerce websites receive 3.31% of their total visits from smartphones running Android, up from 1.76% last year and an increase of 85% in total shopping sessions. These same websites receive 5.41% of their traffic from iPhones compared to 2.45% a year earlier, an increase of 117% in total shopping sessions over the same time period.”

The data showed that in Q4 of 2011 websites received 1.99% of their total visits from Androids and just 2.25% of their visits from iPhones, suggesting the two competing smartphone systems were about dead even. The iPhone 4S was released that quarter however, and iPhones spiked way ahead of the Android.

Despite that spike in iPhone usage, the report indicated that shoppers on Android-powered smartphones converted better than iPhone users — Android converting at a 1.26% clip and iPhone at a 1.00% clip.

What Does This All Mean?

Well even with iPhone getting a bigger spike than Android, both phones grew their e-commerce usage in 2012. That means the goal of realizing those heady revenue predictions from companies like Juniper and Gartner Research are on course. The security concerns may make good copy for the media, but the real obstacle remains saturation in the actual physical marketplace. Give people more opportunities to pay with their phones and they will readily begin to pay with their phone. It will start off as some new gimmick people want to try. And then it will become second nature.

Olympic Payments: Cash Takes Gold

Today the Official Merchant Services Blog will take a look at the role Mobile Payments played in the 2012 London Olympic Games.

Visa, the official Payment Payment provider of the Olympics pushed for Mobile Payment Technology as a safe and convenient payment option for consumers throughout the London games. Jim McCarthy, Head of Products at Visa Inc., said “This summer we will be demonstrating the future of payments in London – a future where most consumers will rely on mobile devices, tablets and PCs to manage their daily financial lives.”

As a part of Visa’s Olympics marketing push for the future of Mobile, a limited edition Samsung Galaxy S III was provided to some Visa sponsored athletes and trialists. The device featured an Olympic-branded version of Visa’s mobile payment application, Visa payWave which uses Near Field Communication technology, or NFC. To make purchases, consumers simply needed to select the Visa icon on the Samsung device and hold the phone to a contactless payment terminal to pay.

It seemed as though Visa had all the pieces in place to make this Olympics a Mobile Payments success; a dominant payment network, including Visa only ATMs positioned throughout the games, NFC-enabled vendors able to take the mobile payments, and spectators with smart phones who could pay via mobile. The only problem was competing against an Olympic veteran of every games, cash.

During Great Britain’s Men’s Soccer match versus the United Arab Emirates, spectators were unable to pay for food and drinks at Wembley Stadium by credit card or mobile payment after terminals went down. Many ticket holders described the lines that subsequently built up as ridiculous and said a lack of cash machines at the west London ground added to the problem.

A spokesman for Visa was quick to point the finger at Wembley officials, placing the blame firmly on the stadium’s network infrastructure saying, “We understand that Wembley’s systems failed and therefore they were only accepting cash at the food and beverage kiosks.”

Twitter was bombarded with thousands of angry posts from people who found it completely unacceptable that they couldn’t feed themselves. This was due to the fact that the only available way to pay was with old-fashioned cash and coins, a means of payments Visa wanted to push away from with its mobile payment implementation.

In these games, mobile payments did not expand as much as Visa had anticipated. Add that to the complete network failure at Wembley Stadium and it would seem that mobile payments were a flop at this year’s Olympic Games. The silver lining however, is that mobile payments did have a huge presence at the games. And the uproar caused by the network failure seems to prove that we are moving away from cash as a society. Just a few years ago, credit card terminals going down at the Olympics might not have been such a big story, let alone a trending topic on Twitter. It seems for the London Olympic Games, cash took the gold medal yet again in payments, but with the doubling of Mobile users here in the U.S. and the increase globally; cash may soon be unseated by mobile payments.

E-Commerce: Robust and Full of Life

Today The Official Merchant Services Blog keeps on rolling along with the topic of E-Commerce. We’ve recently been looking at some of the interesting individual aspects of the sector, such as our blog about E-Commerce and Video Games the other day and our blog about Social Media Commerce yesterday. We’ve consistently reported how pervasive and commonplace online shopping has become over the past decade. Gone is the shiny newness of using a mouse to do all of your Christmas shopping. It’s now something mundane that we see most consumers in U.S. households doing when they need either the convenience of going online, or the power they have to find exactly what they want when local brick and mortar venues may not have the service or product desired.

A huge fuss has been made repeatedly over the past two years that Mobile Payment Processing, or M-Payments, are going to reap billions of dollars of profit worldwide and online shopping will shift and embrace shopping anywhere with one’s smartphone.

The King is Dead

This article from Jasper Bell at Econsultancy goes so far as to suggest that E-Commerce is dead and that a new hybrid concept, called Distributed Commerce. Bell calls it a “shift from this direct model, to an indirect, more agile way of selling.”

Bell cites the growth of social media and mobile phone usage. Bell discusses the power of what he calls “peer-influenced content” — essentially word of mouth advertising on social networks, or more simply put, you get turned on to a good or service because your Facebook friends tell you it’s cool or your twitter feed blows up — as a key factor in the paradigm shift.

He also demonstrates that the fluid ability to move from the virtual space on your mobile device to the physical realm of the area you are in and then back into the virtual realm of another device or a channel makes marketing and eventually commerce much more flexible and agile, keeping up with the consumer no matter where they go or how they get there. The International Data Corporation backs up that assertion with its findings that indicated 45% to 60% of smartphone users conducted due diligence on store prices and inventory from their devices. IDC also falls into line with companies like Garnter and Juniper about the healthy future of m-payments, predicting that by 2014 more than $50 billon will be spent on merchandise globally by consumers using their smartphones.

This agility for consumers to shop wherever using their phones as both assistants and payment option is something we have delved into with our look at the variety of Mobile Payments options. And Bell makes a really compelling point that people flip quickly between a product search on their phone’s internet access to a purchase ready state in mere clicks. Distributed Commerce is what Bell calls the evolution of E-Commerce. And it is probably the strongest reason why all of our coverage of mobile payments is still listed under the category flag of E-Commerce. We at The Official Merchant Services Blog already acknowledged this natural connection and kept them together in the larger picture of E-Commerce.

As Bell says in his article, “Commerce today is less about ‘selling in’ a channel but selling ‘through’ a channel, reaching out to consumers wherever they are and selling in that context.”

Merchant Services E-Commerce Blog Image

The Other Shoe

Bell’s compelling evidence for the rise of M-Payments sets his article on a course to then predict a downfall in E-Commerce. We think this is mainly due to his definition of E-Commerce referring primarily to shopping online through a PC or Mac desktop computer — ye old visit to amazon.com from your home computer. We of course lump M-Payments into the overall umbrella of E-Commerce. We also don’t feel the juggernaut that is E-Commerce is so easily deconstructed by the baby steps of M-Payments just yet.

Twenty Five Percenters

Juggernaut is too timid a term to describe E-Commerce. This infographic from Big Commerce asks the question “Will M-Commerce Overtake E-Commerce?” If you skip right down to the bottom of the graphic, the sub section titled “Brace Yourself” you find this stunning and overpowering fact: E-Commerce is expected to generate $1 trillion in revenue by 2014. The graphic also states that 54% of all retail purchases will be made online by 2014. Comparatively, M-Commerce is predicted to hit $119 billion worldwide by 2015. Mobile Payments are not going to be the death of E-Commerce just yet.

And this article by Media Post News says pretty much just that — estimating that even by 2017 m-commerce will match about 24.4% of the overall e-commerce pie. All of these projections point to staggering growth for mobile payments, but moving right along with that is the firmly established e-commerce sector that will continue to take more and more of the standard retail pie as it nom-nom-noms its way to massive revenue generation.

Big Time Processing Opportunities

What this means in terms of the payment processing industry and all the companies like Host Merchant Services that facilitate credit card transactions for merchants is simple: Our economy is going cashless. We are driving full steam ahead into a realm where we buy things with phones that will function like credit cards, or we just hop on a device/tablet/computer and click-touch-click our way to purchases. This means more and more of the purchases people make will carry the processing fees that credit card processors make their margin of profit from. As the economy becomes completely tied in to credit transactions through E-Commerce, payment processing becomes a standard. It’s something Merchants need to know about and that’s why The Official Merchant Services Blog exists.

Social Media Commerce: Tweet, Like, Buy

Today’s installment of the Official Merchant Services Blog is on the rise of E-commerce in social media. Last week, we covered the E-commerce offerings of the video game industry in detail. Today, I’d like to take a look at the role E-commerce is beginning to play in the realm of Facebook, Twitter and other social media websites.

Social Media User Base

Social media sites have expanded rapidly over the last few years. For those who don’t remember, Facebook started out as a place strictly for college level students to network. Now all-inclusive, Facebook is the world’s most populated social gaming and media platform with 955 million users worldwide.

Twitter is second with over 500 million users worldwide, LinkedIn is third with just about 175 million, and Google + trails all three with about 90 million. With such a massive user base to reach out to, an E-commerce presence is the next logical step, and as usual, Facebook is taking the lead. This article will focus on what Facebook has done to streamline the E-commerce aspect of social media.

“Like” Pages

It’s safe to say most Facebook users are familiar with the “Like” button and similarly, the “Like” pages. These pages describe the interests and activities of the user, offer updates to certain products and promotions, as well as allow users to share their thoughts on those products.

The end goal of any merchants Facebook “Like” page is the get the most number of “Likes” and subsequently the most number of page views and purchases of your particular product. The problem lies with differentiating potential customers from current ones. If someone “likes” a page for a product, they may already own it, be saving their money for that product, or just think its neat but don’t want or need it. As of right now, Facebook has no way to separate these users.

Social E-Commerce

According to Facebook’s SEC Form Q-10, 1.6% of users spent over $1 billion on Virtual goods (accessories for virtual characters, tools in Farmville, etc) in the first six months of 2012. That is money spent on items never seen outside of the browser. If the market for non-tangible goods can be that lucrative, the market for actual goods Facebook users enjoy must be bigger.

Carol Rozwell, Vice President at the tech research firm Gartner had a call to action for merchants unsure of the potential for social media e-commerce. “It’s crucial that organizations implement approaches to handling social media now. The effort involved in addressing social media commentary is not good cause to ignore relevant comments or solvable issues.” According to Gartner, although more than 50% of organizations track social media only 23% actually collect and analyze data.

In June, Facebook made a move to simplify mobile e-commerce payments by decreasing the number of steps involved in checking out, from seven individual steps to two, and eliminating the need to type. The Facebook mobile app SkyBucks, is another innovation in E-commerce, it allows you to charge your virtual accessories to your phone bill directly.

More recently, the social media giant rolled out an offer for stores using Shopify. Since partnering, Facebook is now offering free $50 Facebook Ad credits. This is in addition to the credits from Google AdWords and Amazon Products that Shopify merchants already enjoy. The promotion is another step for Facebook in the E-commerce direction.

The “Want” Button

Above I identified a need Facebook had, the ability to discriminate between current and potential customers for their advertisers and business users. In early July, the Ecommerce Times had a story on Facebooks next big thing: The “want” button.

The button will allow users to create ‘wish list’ of products that they like or want, but do not currently have. Merchants will want to focus on who has marked their product as ‘wanted’ and who has not. The benefits of the “want” button go beyond sales. The button would allow for highly targeted marketing as well as a sharing of ‘wish lists’ between users. Ultimately the goal should be for the wish list to take its place among the social media landscape, along side a user’s general info and status updates.

For the Consumer

To the average consumer and Facebook user, this should add to the ease of purchases that has increased recently. With the additional “want” info that the site will collect, you will be able to see what your friends and family want, add similar items to your personal wish list, and research potential gifts for you friends discretely. All of which add value to Facebook’s ever-increasing platform.

For the Merchant

For merchants looking to expand on Facebook, the E-commerce addition will do wonders. The added marketing affects will help businesses increase name recognition and sales, while still connecting with the end user. It seems to me, that Facebooks E-commerce push will benefit all involved.

Keepin’ it Mobile

Today The Official Merchant Services Blog brings an update on Mobile Payment Technology.

The Mobile Payments Technology sector has been the topic of overt optimism for quite some time now. We’ve reported multiple times that industry analysts have predicted large gains in Mobile Payments profits over the short- and long-term future. Our article from 2011 showcased three different research groups and their take on the successful future they felt was in store for Mobile Payments.

More pieces of that predictive puzzle have been falling into place. According to a mobile payments survey conducted by IDC Financial Insights, mobile payments use in the United States has doubled. The May 2012 study looked closely at emerging pay method technologies and discovered that 33 percent of respondents had used their devices for mobile payments at least once.

IDC’s practice director, Aaron McPherson, told QRCode Press that “Based on our results, we expect to see continued growth in open-loop prepaid cards and mobile payments next year, and believe that the improvements being offered in electronic-bill delivery will break electronic-bill presentment and payment out of its doldrums as well.”

The Next Big Affirmation for Mobile Payments

Visa is convinced new payment tech, including mobile payments, are definitely the trend of the future — so much so that the card association giant is poised to showcase the power of the future in the spotlight of the 2012 Olympic Games in London. One of the new technologies Visa is thrusting into the public eye at the Olympics is EMV Chip Cards — something we highlighted back in February. Visa is heavily invested in Smart Card technology so it’s no surprise the company is using its Olympic Games partnership to point some attention at its EMV efforts. But right alongside that EMV push, Visa is also Mobile Payment Technology as a safe and convenient payment option for consumers throughout the London games.

Jim McCarthy, Head of Products at Visa Inc., said “This summer we will be demonstrating the future of payments in London – a future where most consumers will rely on mobile devices, tablets and PCs to manage their daily financial lives.” Visa’s Olympics marketing push for the future of Mobile includes:

Visa Mobile Payments and Services: A limited edition of the Samsung GALAXY S III, Samsung’s Olympic Games Phone during the London 2012 Games, will be provided to Visa sponsored athletes and trialists. The device will feature an Olympic-branded version of Visa’s mobile payment application, Visa payWave. To make purchases, consumers simply select the Visa icon on the Samsung device and hold the phone to a contactless payment terminal to pay.
Visa Mobile Prepaid: During the London 2012 Games, Visa Inc. will also showcase its newest product – Visa Mobile Prepaid – the first mobile-based Visa product providing consumers in developing countries a payment account that offers Visa’s high standards of security, reliability and global interoperability. By accessing their Visa Mobile Prepaid account on their mobile phone, consumers can send and receive international remittances, pay bills, top-up wireless minutes, and access Visa ATMs.

Setting New Standards

Looking at last year and then at this year’s statistics, Mobile Payments are doing their best to meet the bold predictions analysts have lined up for the future. The sector is growing rapidly and consumers in both the U.S. and around the world are embracing the convenience that the technology brings to their shopping habits. Juniper Research, a company that specializes in the identification and appraisal of high growth opportunities in various mobile telecommunications and applications sectors, put out a publication on July 5, 2011, titled “Mobile Payment Strategies.” Juniper predicted worldwide mobile spending would jump from $240 billion in 2011 to $670 billion in 2015.

Well Juniper is back with a new forecast that focuses on Near Field Communication (NFC) and this study predicts that in just five years the NFC Mobile Payments market will will exponentially increase and eventually exceed $180 billion — a whopping seven times what it is today. The study forecasts that one in four people from Western Europe and the United States will use NFC as a payment mechanism by 2017.

Juniper cites last year as a turning point for NFC payments and suggests that major consolidation of the technology is the impetus for the predicted growth in the market as consistent standards and protocols will help fuel rapid growth and assuage the security concerns of consumers. Juniper says that in 2011 major technology infrastructure standards were finalized within the NFC Mobile Payments market so that many mobile network operators committed to the market and NFC payment pilots from both mobile operators and financial institutions transitioned to commercial service. And the research firm pointed to NFC-enabled smartphone models being announced by almost all handset manufacturers and Google as a key factor for igniting interest in the mobile payment usage in the U.S.

“This is a critical time for the NFC retail payments market,” said report co-author Dr. Windsor Holden. “Despite the significant progress being made today, the full potential of the market can only be fulfilled if all ecosystem players are equally committed and mobile wallet consortia remain in place.”

Mobile Commerce Concerns [2023 Update]

Today The Official Merchant Services Blog turns its tech-obsessed eyes once again to the Mobile Payment Solution sector. Recently, Host Merchant Services became fully mobile and able to offer a mobile payment solution for Android and iPhone devices. This expansion continues, and HMS now also provides a payment processing solution for iPads as well. You can read about the expanded HMS Services in our April 9, 2012 Blog Entry.

Mobile devices are ingrained in the lives of consumers these days. Like the recurring ad sarcastically states, the smartphone beta test is over. And people are wandering around everywhere with their phone bringing their social media, camera, and buying power with them.

Suri, the voice of the iPhone, is holding the hands of stars from Samuel L. Jackson to Zooey Deschanel, helping them manage such difficult life tasks as making gazpacho to putting off cleaning till the next day on one’s calendar.

Coming with this ingratiation into our daily lives are two key elements.

We’re really just one artificial intelligence glitch/accident/sabotage away from launching the type of dystopian sci-fi worldview found in Terminator, The Matrix or Magnus Robot Fighter.
We’re flying full force into a world where we’ll also start to wave our phones around like a Hogwarts Magic Wand, paying as we go from place to place, store to store.

Mobile Payments are brisk and bustling because people are buzzing to take advantage of the convenience they offer. Here’s a graphic based on data compiled by the AITE Group showing the trend in spending via smartphone in a 5-year stretch:

But it’s not all phones-n-roses. As one might expect, the state that’s home to Cyberdyne Systems and our eventual AI-overlords Skynet, has a university — the University of California — that did a study titled “Mobile Payments: Consumer Benefits and New Privacy Concerns.”

The bottom line of this study is that American consumers are still wary of what this convenient technology will bring. The study found some interesting answers to questions about consumer thoughts on their privacy.

The study found that respondents overwhelmingly oppose the revelation of contact information to merchants when making purchases with mobile payment systems and an even higher level of opposition exists to systems that track consumers’ movements through their mobile phones.

This article by Kit Eaton at Fastcompany.com dissects the numbers in the study. Eaton states that: “The numbers are stark. When asked if they thought their phones should “share information with stores when they visit and browse without making a purchase,” 96% objected to the tracking, 79% said they definitely would forbid it, and 17% said they “probably” wouldn’t allow it–meaning just 4% were indifferent or positive about the idea. When the question was instead about information sharing (phone number, address, and so on) at the actual point of sale, 81% objected to phone-number sharing–a mere 15% said they’d probably allow it and 3% definitely so. Similar figures emerged when the information shared was respondents’ home address. “

This is all well and good and you can download the study here at this link. But what the study seems to overlook is exactly how many people, many of the people most likely polled in that very study, are already well past the point of no return in terms of their privacy concerns.

Any of those who object to tracking are likely already being tracked by Google and Facebook, social media they use with ease and frequency from their smartphones.

All those who object to sharing contact information may have already shared this information easily and readily when making an online purchase in the past few years. And statistics indicate that e-commerce is booming and replacing brick and mortar in the retail sales tug-of-war.

Eaton catches on to this flaw in the study, and states in her article: “And that’s the key to unraveling this problem right there: When you do use a current-tech store loyalty card you are effectively voluntarily giving the store your personal information, and “tracking” yourself. It’s why the cards exist, of course–they’re partly there as a sales incentive, to get customers back in the door via money-off offers, but mainly so the store can collate information about customers and work out what kind of products to stock, what offers to run, and what future products to plan for.”

And Eaton even points out that in a Pew Research Survey, 71% of Americans use the internet for shopping — meaning that they’ve already typed in their personal contact information.

So essentially, Mobile Payments seem primed to take advantage of the marketplace. The worry over security is still genuine to some extent — identity theft and phasing scams and data breaches abound as we get more and more tech ingrained. But in the end, the American consumers already dove headfirst into this when they fell in love with social media. The tweets, the +1’s and the Likes have already been tracking you. So when Facebook transforms itself into Skynet, or simply when Facebook and Google go toe-to-toe with Visa in the titanic tussle for your smartphone swipes … your dollars will be as easy to find as your latest status update or check-in.

Android Phone Now Takes Payments

Host Merchant Services finally gets to make this announcement official: All mobile payment solutions the company offers now feature both iPhone and Android compatibility.

On February 28, 2012 Host Merchant Services teased through its Facebook Page that it would have big news regarding HMS and Mobile Payments in March. But technical difficulties with the full release of Payfox’s Android solution held the news back until today. In the Android Marketplace, Payfox is now listed and available for download. You can see the listing here.

The App has been on the Android Marketplace since March 21. But now the rest of the support is in place to get the app working. The final piece of the puzzle was the card reader — UniMag II, Two-Track Secure Mobile MagStripe Reader. The device is a two-track, encrypted magnetic stripe reader that works with a wide variety of mobile platforms, including Apple, HTC, LG, Motorola, and Samsung devices. Use your mobile device to read credit cards, signature debit cards, gift cards, loyalty cards, driver’s licenses, and ID badges. The UniMag reads up to 2 tracks of information with a single swipe in either direction, providing superior reading performance for your mobile device. A merchant account is required to accept credit card transactions.

Host Merchant Services image of the Unimag II.

You can download the specs from the UniMag II data sheet right here. These are the Android devices supported by the reader:

HTC Aria
HTC Desire Z
HTC Eris
HTC EVO 4G
HTC EVO Shift 4G
HTC G2
HTC Hero
HTC Incredible
HTC MyTouch 4G
HTC EVO 3D
HTC Nexus One
HTC Incredible 2
HTC MyTouch 3G Slide
HTC MyTouch 4G Slide
HTC Thunderbolt
HTC Merge

LG Optimus T
LG Revolution

Motorola Droid 2
Motorola Droid X
Motorola Droid Pro
Motorola Milestone
Motorola FlipSide
Motorola Atrix
Motorola Droid 2
Motorola Droid 2 Global
Motorola Droid Bionic
Motorola Droid 3

Samsung Captivate
Samsung Droid Charge 4G
Samsung Epic
Samsung Epic 4G
Samsung Fascinate
Samsung Nexus S
Samsung Replenish
Samsung Infuse 4G
Samsung Continuum
Samsung Galaxy SII

Please Note

When you go to the Google Play Market and search for PayFox using your Android/Droid phone, the PayFox application will only display for those devices for which the application itself is compatible.

Host Merchant Services image for difference between Android phones and Star Wars Droids.

Red 5 Standing By

Our friends at Transfirst also wanted to offer some clarification about the use and licensing around the word Droid:

“Android and Droid are often used interchangeably when referring to ever-growing & increasingly popular line of smartphones that run on Google technology. The difference, for most purposes, is one of legal definitions and intellectual property. Android simply refers to the operating system and software that powers phones built by any of number manufacturers, including HTC or Motorola, and that run on any of the major carriers.

Droid, on the other hand, is a term coined and owned by LucasFilm Ltd., the licensing rights for which Verizon had to purchase in order to brand their specific line of Android Smartphones.”

In short, Androids are phones, and you can now use them to swipe payments. Droids are what Jawas scavenge. Though I’m sure the Jawas will happily accept mobile payments from all you moisture farmers out there. Ootini!

Payfox for Android Coming Soon

On February 28, 2012 Host Merchant Services teased through its Facebook Page that it would have big news regarding HMS and Mobile Payments in March. The Official Merchant Services Blog is here to give you that big news.

Sort of.

The news is that Payfox will be usable for Android phones as well as the iPhones it has been compatible with for the past couple of years. Unfortunately that news is coming piecemeal. The announcement was slated for late March. But the project isn’t quite ready for launch. According to an ISS Bulletin from Transfirst:

“Although PayFox Android is currently not yet available … We are expecting a formal release in the next couple of weeks. “

In anticipation of the pending release, there is a new “PayFox Droid card reader” option opened up in Transfirst’s ELAPP™ software. The option is there, but the functionality isn’t ready yet. So it’s just a teaser of what’s to come. ELAPP™ is an innovative virtual application system that walks users through the merchant boarding process with intelligent rules for data entry.

Host Merchant Services E-Commerce Mobile Payments image

That’s not the only teaser, however. In the Android Marketplace, Payfox is now listed and available for download. You can see the listing here.

User tests by the staff here at The Official Merchant Services Blog show that the download works. And the app will then show up on your Android phone. But there is no reader equipment available yet and the transactions can’t yet be processed. The App has been on the Android Marketplace since March 21.

So all we’re able to confidently report right now is that the pieces for Android appear to be in place, just not fully ready. We will keep you posted with any updates or breaks in this story. Once it is ready, Host Merchant Services will be rolling out a detailed press release discussing the addition of Android to their already robust iPhone capability and how it relates to their full e-commerce service package that it offers merchants.