Mobile Payment Magazine

Collective POS Launches Mobile Payment Solution for Apple, Blackberry and Android Smartphone Devices

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Collective Point of Sale Solutions, a Canadian provider of payment processing services, has launched VirtualMerchant Mobile, a mobile P.O.S solution that allows small and medium-sized businesses to process credit card payments using an existing smartphone device.

“We worked very hard to deliver a payment solution that enables businesses to utilize their existing hardware, technical infrastructures and communications providers,” said Michael Back, CEO and President of Collective POS. “With this product, merchants can turn any iPhone, iPad, iPod Touch, Android or Blackberry device into a secure, affordable point of sale terminal.”

To set up, merchants who have been approved for credit card processing download an application from the relevant app store and enter the account information provided to them by Collective POS.

VirtualMerchant Mobile includes both hardware and software features to ensure complete end-to-end transaction security. To protect merchants and cardholders, no payment information is stored on the mobile device. At the time of swipe, card data is encrypted through the provided card encryption sleeve and immediately sent to a firewall-protected, secure hosting environment.

“This solution is perfect for taxi and livery services, companies that offer delivery, participate in trade shows or flea markets, home-based businesses and any other business that wishes to accept credit cards on the go,” said Michael Back.

In addition to portability and information security, VirtualMerchant Mobile offers the reliability that is synonymous with all Collective POS offerings, making it an ideal solution for any on-the-go business or service.

Collective POS serves more than 10,000 businesses across Canada, including retail stores, restaurants, hospitality providers, mobile services, e-commerce merchants, mail order/telephone order businesses, professional firms/clinics/practitioners, B2B product/service providers, tradespeople and many other industries.

Source: Collective Point of Sale Solutions, Ltd.

Consumers Union Warns About Mobile Payment Security

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Most cell phone and tablet users can purchase digital goods and charge them to their monthly bill or prepaid phone account. But they may not get the protections they need to limit their financial liability if something goes wrong with the transaction. The protections consumers receive will vary depending on their wireless carrier’s policies and what?s in their cell phone contract, according to a new analysis by Consumers Union.

“Consumers using mobile payments should get the same strong protections they currently enjoy when they make purchases with a credit card or debit card,” said Michelle Jun, senior attorney for Consumers Union, the nonprofit advocacy arm of Consumer Reports. “But we found that consumer rights can vary widely between wireless carriers and the protections carriers claim to provide are often nowhere to be found in customer contracts.”

In May 2011, Consumers Union called on the top wireless carriers to strengthen their contracts to protect consumers in the event that their phone is lost or stolen or if a merchant makes a billing mistake or the customer is not satisfied with a purchase. The consumer group urged the carriers to provide the same strong protections guaranteed by law when consumers use a credit card or debit card. In addition, Consumers Union pressed the companies to provide consumers across the country with the same protections California phone customers are entitled to receive as a result of regulations issued by the state’s Public Utilities Commission (PUC).

Since May, Consumers Union has been in communication with representatives from AT&T, Sprint, T-Mobile, and Verizon Wireless to find out how they handle disputed mobile payment transactions. All four carriers maintain that they provide ample protections for consumers.

However, Consumers Union found that the protections these carriers provide fall short of what consumers get when they use credit cards and debit cards or when California consumers report a disputed charge on their phone accounts. In addition, many of the protections that wireless carrier representatives described to Consumers Union are not disclosed in customer contracts, making it difficult to know whether consumers can count on these safeguards when problems arise.

“As new mobile payment options become available, consumers are better off sticking to services linked to credit cards or debit cards, which come with strong protections required by law,” said Jun. “If wireless carriers want consumers to have confidence in direct carrier billing programs, they should strengthen their contracts with the protections consumers need.”

Below is a summary of the protections that Consumers Union analyzed and what is provided by the top wireless carriers:

Limit liability when phones are lost or stolen: A credit card customer’s liability is limited to no more than $50 for unauthorized charges. In practice, credit card issuers usually shield customers from any financial liability for fraudulent charges. Verizon Wireless? contract makes clear that its customers are not liable for charges related to a lost or stolen phone. Contracts for AT&T, Sprint, and T-Mobile protect customers from fraudulent charges made after a phone is reported lost or stolen but consumers may be on the hook for charges made before making a report.

Limit liability for disputed charges: If a billing error appears on a monthly credit card statement, there is no liability for the customer as long as the customer reports the error within 60 days. “Billing error” also includes a dispute with a merchant about the delivery or acceptability of goods or services. While all four wireless carriers insist they provide refunds for billing errors or when customers are unhappy with purchases, these rights are not clearly disclosed in their contracts.

Re-credit pre-paid customers within 10 days for disputed charges: After a consumer reports a fraudulent transaction involving a debit card, the bank must either complete its investigation within 10 business days or provisionally re-credit the consumer’s funds within that time. AT&T, Sprint, and T-Mobile indicated that they strive to provide prompt refunds but none guarantee in their contracts that pre-paid customers will get a provisional refund within ten days after reporting fraudulent charges. Verizon Wireless does not allow customers with pre-paid phone accounts to make mobile payment charges.

Give customers the right to withhold payments for disputed charges: California’s PUC rule gives phone customers in that state the right to withhold payment of disputed charges while an investigation is conducted and requires investigations to be completed within 30 days. Sprint’s contract indicates that customers don’t have to pay for disputed charges as long as they are reported within 60 days. AT&T said that it gives all customers the right to withhold payments during an investigation but its contract only discloses this right to Californians. T-Mobile discloses these rights for California customers but not for customers living in other states. Verizon Wireless’ contract allows customers to withhold payment for charges related to lost or stolen phones but it does not indicate that consumers have this same right for other kinds of disputed charges.

Enable customers to set a cap on mobile payment charges: The California PUC rule allows consumers to block third party charges on their accounts. All four wireless carriers allow customers to block third party charges but AT&T and Sprint do not disclose this right in their contracts. AT&T, Sprint and Verizon Wireless set their own dollar limits on allowable charges (AT&T has a $100 limit per month per line while Sprint and Verizon Wireless limit charges to $25 per month per line). AT&T enables consumers to set their own limits but charges $4.99 per line each month to do so.

For more details, see How Top Wireless Carriers Compare on Consumers Protections for Mobile Payments.

For Consumers Union’s mobile payment tips for consumers, see: Mobile Payments Tip Sheet: What Can Consumers Do Now

Source: Consumers Union

Nokia Launches Mobile Wallet in India

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The Finish mobile giant has launched its Nokia Money service. The service saw pan-India launch and can be used on any mobile.  The Nokia Money platform allows you to do number of financial transactions such as payments for utility bills, tickets, top-ups and insurance premiums that can be conducted on the mobile phone itself.

You can register for the Nokia Mobile by registering with a local Nokia outlet and depositing cash there. From there your cash will be converted in to digital cash and you can avail the service through SMS.

Read more, via MSN India.

Mobile Industry Predictions Report: 2012

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The Yankee Group has just released its free 17-page 2012 Annual Predictions Report, which looks into what the future has in store for the ever-growing mobility landscape.

Overview:

The world is in transition and in the year ahead, mobile will be both the protagonist and the subject of this instability. During the last five years, networks and the information they carry have plugged more than 2 billion new participants into the mobile economy. The winners in this landscape will be those players that can scale quickly and treat each user as a unique customer.

Report Highlights:

  • The mobile gold rush is global in scale a and touches all customers. In the last five years, 2 billion new users joined the mobile revolution. Looking ahead, mobile workers and consumers will embrace tablets, mobile content and personal cloud services. At the infrastructure level, the operator imperative to monetize all-IP networks will drive investment in policy solutions.
  • Asia-Pacific takes the lead in tablet sales. Yankee Group forecasts U.S. tablet sales will total 17 million in 2011 and almost 25 million in 2012. Similarly, tablet sales in all of Europe will exceed 15 million in 2011 and reach more than 26 million in 2012. And tablet sales in the Asia-Pacific region will total 20 million this year and reach almost 39 million in 2012, more than 50 percent above the U.S.
  • Diameter signaling is taking off. Yankee Group has seen significant request for proposal/request for information (RFP/RFI) activity and expects spending on IP-based Diameter signaling to more than double between 2011 and 2012—growing from U.S.$22 million to U.S.$45 million. And overall, we see the market mushrooming to U.S.$212 million in 2015, for a whopping CAGR of 57.2 percent.
  • Personal cloud services are hitting the high-growth phase. We forecast 17 percent of professionals with three or more devices will adopt a personal cloud service for online storage, backup and synching.
  • Economic woes threaten operators. Western European operators will see churn increase from approximately 2.3 percent per month today to 2.4 percent by the end of 2012, despite operators’ ongoing efforts to migrate customers to postpaid services and long-term contracts linked to new smartphone purchases. The world is in transition and in the year ahead, mobile will be both the protagonist and the subject of this instability. During the last five years, networks and the information they carry have plugged more than 2 billion new participants into the mobile economy. The winners in this landscape will be those players that can scale quickly and treat each user as a unique customer.

For more information and to download the report: 2012 Annual Predictions Report: Mobile

Alternative Payment Channels Report

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Research and Markets has released a new report on Alternative Payment Channels, which have changed the way consumers pay for goods and services and have paved the way for tapping into the unbanked sector across the world.

The report gives detailed insight into the huge variety of alternative payment channels currently available, and is a must for all industry stakeholders.

Key industry statistics have been compiled to give a holistic view of the major markets such as the US, UK, Italy, Germany, India and China, with a special emphasis on the opportunities available in emerging markets.

The report is largely structured into four major sections:

The alternative payment channels market: The most commonly adopted modes of payment and the emerging and niche payment channels. Further, the section also entails a detailed coverage of key drivers of alternative payments and its contribution towards financial inclusion of the unbanked sector.

Technology and infrastructure: The technological and infrastructural developments driving the innovation within the alternative payment market.

Developed markets overview: Coverage of the positioning of alternative payment channels in the developed regions, especially North America and Europe.

Emerging and developing economies: Insights pertaining to market potential/ opportunities and the growth of alternative payments. The section lays particular emphasis on the consumer spending habits regarding payment methods.

Read this report to:

  • Gauge the current market status of alternative payment channels
  • Access previously unpublished data on the alternative payments market
  • Identify the trends and innovations propelling the growth of alternative payments
  • Gain insight into technology and infrastructure supporting electronic payments
  • Scan the trends in developed markets and the opportunities in the emerging markets
  • Learn from the major players and their product portfolios
  • Analyse the overall market potential for alternative payments

The global payments market continues to evolve to a large extent due to the boom in ecommerce and in the mobile payments market. While traditional payment methods have evolved over a long period of time, developed and emerging economies are increasingly adopting alternative payment methods, which promise to provide the consumers with the ability to undertake low cost transaction in a safe and convenient way. New and innovative payment services have become faster, cheaper, more secure and practical, and better integrated to customer systems and processes.

Changing consumer spending habits and preferences, growing awareness among consumers regarding the different payment instruments available and the constant development of technology are the key factors driving the growth of alternative payments. Payments are moving from cash based to cash-less transactions, to customer not present transactions. While online payment services or e-commerce are more prominent in developed economies owing to the high penetration of internet, mobile payments have a considerable reach in emerging economies like India, China, Brazil, Kenya, etc as there are more mobile phones than bank accounts in these countries. According to the Bank of Finland’s Payment Habits and Trends Report, trends in the EU worth highlighting include the following:

  • non-cash payments are replacing cash payments
  • electronic payments are replacing paper-based payments
  • self-service is replacing branch banking
  • use of debit cards has grown faster than use of credit cards, but this may change
  • direct debits are developing slowly

These changing trends are creating opportunities for established as well as start up companies offering a plethora of alternative payment instruments. Companies like PayPal, Alipay and Google Checkout are facing severe competition from new entrants like Boku, Inkfruit, Giropay, Obopay, Zong, Gaia (a gaming and social networking site) etc. New entrants are coming up with innovative, convenient and cost effective payment options, for example Boku which offers its customers the ability to buy digital goods and services using their mobile number, and where the charge shows up in the mobile bill (either a pre-paid or monthly bill). Even banks are focusing their efforts on promoting internet and mobile banking to keep up with the competition, and retain their market share. The online and mobile payment market is expected to undergo substantial growth with even some government institutions supporting the development of alternative payment channels across various sectors.

Additionally, innovation in technology has paved way for greater competition from non bank payment service providers. The alternative payment services and technologies offered by these companies will allow consumers to make online purchases, buy virtual goods and currencies, and make personal and commercial payments etc. Though a large number of payments are still made by cash and cards, a sizable number of payments made online are via alternative payment instruments.

Payments habits are largely influenced by a country’s social-economic and technical factors. So the developed markets represent a well established consumer based for e-commerce. Among developed countries Japan is the most mature market for mobile payments, while Europe is exploring the benefits of e-commerce with SEPA promoting the use of online banking in EU regions. The US market is quite structured and mature for alternative payments but the use of mobile payments is still at nascent stage. By contrast mobile payments is forecast to grow at a slower pace in the US, as introducing mobile payments require a considerable investment in infrastructure. Here the ratio of benefits to costs is extremely low in the short run. Not only is the payment market more mature in developed economies, but the percentage of unbanked or under-banked section is also quite low.

Emerging economies represent a great opportunity for mobile payments, largely due to a much higher proportion of mobile phone ownership compared with bank accounts. Among the BRIC nations Russia is way ahead with regards to e-payments, reaching an 84% penetration level by 2002. In India the retail sector is still dominated by cash transactions, but consumers are gradually moving towards cashless transactions. Banks in India are doing their best to promote mobile banking in urban as well as rural areas. With an aim to promote cashless transactions the government there is launching some major programmes like UFID, a voucher schemes for public distribution stores. Another factor for growth of e-payment in India is increased internet subscription and access to computers on a daily basis. The internet subscriber base in India has reached 16.2 mn in 2010, a year on year growth of 19.5%. One of the bottlenecks for growth of alternative payments is China, and the contrast here between the low internet penetration rate in rural China which stands at 5.1% against 21.6% in urban areas. However, the mobile penetration rate in China is high which suggests a strong foundation for the growth of mobile payments as an alternative means of payment.

Developments in IT are another major factor driving the growth of payments channels. The growth of near-field communication technology (NFC) provides completely new interfacing possibilities, with the bandwidth of long distance wireless communication fulfilling any payment service needed at a very low cost.

Several new and important technological developments in the areas of internet and mobile banking integration, customer interfaces, and providing e-invoicing support and increased data content are under consideration or in the development stage.

Additionally, a number of companies are coming out with new and improved mobile handsets, which have all the features necessary to become the physical payment instruments of the future, and which can deliver innovative services such as e-ticketing.

With these developments will come the necessity for the standardisation of alternative payment channels and the demand to improve cross border payments processes and services. Innovative payment solutions coupled with changing consumer preferences, and the introduction of favourable payment laws are expected to drive the market for alternative payments globally.

For more information or to purchase the report, please visit: Research and Markets

PayByPhone Adds NFC Mobile Payments for San Francisco Parking Meters

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PayByPhone, an international provider of systems for parking and urban mobility payments, today announced one of the largest deployments of near field communications (NFC) payment solutions in the world. The San Francisco Municipal Transportation Agency (SFMTA), which selected the PayByPhone mobile payment system for parking, is currently adding NFC-enabled stickers to the city’s 30,800 parking spaces to give drivers the option to pay for parking with NFC-enabled mobile phones in addition to mobile apps and mobile web for regular phones. All parking meters continue to accept payment with coins.

The PayByPhone system, already deployed in the city’s Castro district will be extended citywide as installation of the stickers is completed. The PayByPhone NFC sticker has a passive electronic chip that does not require a battery and stores information such as the parking space number that can be read wirelessly by any NFC-enabled phone. [Read more…]

Isis Selects Gemalto for NFC and Mobile Payment Services

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GemaltoGemalto has been selected by Isis to secure its mobile commerce platform through Gemalto’s Allynis Trusted Service Manager (TSM) solution. Isis, the mobile commerce joint venture between AT&T Mobility, T-Mobile USA and Verizon Wireless, will provide consumers and merchants with an open and secure mobile commerce platform that will revolutionize how consumers shop, pay and save. Gemalto is a leading digital security company.

“We selected Gemalto for their long-standing relationships with financial institutions and mobile operators, which includes experience in securely provisioning services over the air and issuing sensitive financial information to the consumer,” said Ryan Hughes, Chief Marketing Officer of Isis. “Gemalto’s dedication to security is unmatched in the industry and will provide the Isis Mobile Commerce Platform with the necessary infrastructure to ensure consumer and merchant confidence in the Isis Mobile Wallet.”

Isis will enable consumers to enjoy the speed, security and convenience of mobile contactless payment using NFC technology at retail outlets such as restaurants, movie theaters and drug stores. Consumers will be able to securely pay, present loyalty cards, and redeem coupons all with a tap of their phones.

“Gemalto is thrilled to support Isis in delivering the speed, security and convenience of mobile contactless payment,” added Sebastien Cano, Senior Vice-President, Gemalto North America. “Using our extensive experience with worldwide commercial deployments Gemalto has designed a solution for Isis to support mobile payment and a host of NFC services like digital couponing and loyalty programs, access control and mass transit.”

Gemalto provides personal mobile services, identity protection, payment security, authenticated online services, cloud computing access, modern transportation, e-healthcare and e-government servicesthrough its secure software, a wide range of secure personal devices, and managed services to wireless operators, banks, enterprises and government agencies.

Gemalto also provides products for electronic passports and identity cards, two-factor authentication devices for online protection, smart credit/debit and contactless payment cards, as well as subscriber identification modules (SIM) and universal integrated circuit cards (UICC) in mobile phones. In the emerging machine-to-machine applications Gemalto supplies wireless modules and machine identification modules (MIM), as well as  server platforms, consulting, training, and managed services.

The Isis consortium is a  joint venture is between AT&T Mobility LLC, T-Mobile USA and Verizon Wireless and is based in New York City. The venture is chartered with building ISIS, a national mobile commerce platform that  will be available to all merchants, banks and mobile carriers.

Source: Gemalto

Samsung’s New NFC Chip Enables Secure Mobile Payment by Enhancing NFC with Security Features

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Samsung Electronics Co., Ltd., a world leader in advanced semiconductor solutions, announced today its new system-in-package (SIP) near field communications (NFC) chip, the SENHRN1. The new Secu-NFC chip combines a NFC controller and a secure element storing personal information and security keys with advanced encryption technologies, a prerequisite for reliable and efficient mobile payment on NFC-enabled mobile devices. Samsung´s new NFC solution will be on display at CARTES 2011 from November 15th through 17th at the Samsung booth # 3 C 035 in hall 3 at the Paris-Nord Villepinte Exhibition Center. [Read more…]

Google Wallet and the New Payment Ecosystem

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When the Google Wallet launched on September 20, 2011, the first test of a remarkable new financial ecosystem began. But despite the apparent success of traditional mobile payments products like M-PESA in Kenya and South Africa, Google and rival Isis have decided to rewrite the business model – and for good reason. Actually, four good reasons:

  1. Significant revenue is available from the advertising, retention and rewards programs, leaving the usual payments fees to the payments companies.
  2. The payments ecosystem cannot afford new categories. The-existing players are companies with considerable resources and the willingness to use their resources thwarting a new category of entrants.
  3. Regulatory changes are already pressuring known revenue streams, increasing the motivation for existing players in the payments ecosystem to protect position.
  4. Cash is resilient to other tender types in developed worlds, not so in developing countries.

As a result, both Isis and the Google Wallet products are creating a strategy which lets the payment ecosystem continue to charge and earn as much as possible from the payments business. The new revenue these companies seek to earn comes from two vulnerable industries: advertising and loyalty. Google, with its extreme interest in data collection and distribution, will likely seek new revenue from that channel also.

The strategies of these two companies, which are likely to be eventually joined by Apple and Amazon in their approach, has substantially slowed mobile commerce development in the rest of the developed world.

Even Japan, which has used an NFC-like technology for most of the last decade, is highly interested in understanding the results of the American experiments before committing to a long-term strategy. And they are not in a hurry. The only short-range communication standard with approval from the International Standards Organization is ISO/IEC 14443, known simply as Near- Field Communications or NFC.

To use either the Google Wallet or Isis product as they are currently understood, the customer will either need a phone with an NFC chip built in (which is in exactly one model out of hundreds of models of mobile phones in the United States—The Samsung Nexus S), and merchants will need to invest in NFC readers at their cash registers (also known as POS terminals).

Whether the US experiments succeed or fail, one thing is certain—the unenhanced peer-to-peer payments systems like M-PESA have no chance to reach the mainstream of the US or any developed country. The environment is simply too hostile from entrenched payments incumbents, and from feature-rich new services. A different breed of service that includes advertising and rewards programs as well as data services will vastly overshadow stand-alone mobile payments products. These new services are called “mobile commerce.”

The overriding conclusion is that the winning mobile commerce business model, inclusive of the mobile commerce players that will prevail in the long term, may be decided months or years before mobile commerce begins to penetrate the general transaction volume in developed markets.

More information: Google Wallet and the New Payment Ecosystem White Paper.

Source: Luciano Group