Mobile Payment Magazine

Google Places NFC Chip Project Launches in Portland, OR

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Yelp may be the raconteur of restaurant recommendations and Foursquare the cardinal of check-ins, but Google has an ace up its sleeve: NFC chips. The company’s embedded near-field communications chips into each and every one of these “Recommended on Google Places” window stickers, which you’ll be able to trigger with a shiny new Nexus S — just hold your handset up to the black dot, and voila, your phone gets a “tag.”

Google’s now distributing the signs on a trial basis to Portland, Oregon businesses as part of a larger Google Places kit, though it doesn’t explain how (or if) they’ll be able to program the chips. Either way, if you own a hot new joint in Portland, you might as well give it a spin. Find the sign-up form at our more coverage link, or peep a Nexus S doing its thing after the break.

via Engadget.

U.S. Mobile Payment Market to Top $200 Billion by 2015, Says Research Report

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A recent report from Aite Group forecasts that U.S. mobile bill payments will reach more than $200  billion in 2015.

Aite Group interviewed more than 60 companies in the Fall of 2010 and produced a 65 page report that defines and segments the mobile payment industry, and includes an analysis of the competitive and market trends.

Each one of the multiple categories of mobile payments defined in the report will experience double-digit growth, with mobile payments accounting for  US$214 billion in gross dollar volume by 2015, up from US$16 billion in 2010–a 68% compounded annual growth rate (CAGR) between 2010 and 2015.

The report references the following companies: Allstate, Amazon, American Express, Apple, AT&T, Bango, Bank of America, Barclays, Bill2Mobile, BlackBerry, Bling Nation, BOKU, Brink’s, C-Sam, Cashedge, Cellfire, Chase, Chase Paymentech, Cimbal, ClairMail, coupons.com, Coupons Sherpa, Visa’s Cybersource, Device Fidelity, Diebold, Discover, Eagle Eye Solutions, eBay, Euronet, Facebook, First Data, FIS, Fiserv, Foursquare, Gemalto, Global Payments, Google, Gowalla, Green Dot, Groupon, Harland Financial Services, Heartland Payment Systems, Hipcricket, iLoop Mobile, Inside Contactless, Intuit, Jack Henry/iPay Technologies, Kubra, MasterCard, mFoundry, Mobile Coupons, Mocapay, MoneyGram, Monitise Group, mopay, MyWebGrocer, NCR, NetSpend, Nokia, Oberthur Technologies, Obopay, OfferIQ, Online Resources, PayPal, Plastyc, Pyxis Mobile, Research-in-Motion (RIM), Roam Data (Ingenico), Roamware, Rocketbuxx, SK C&C USA, Square, Starbucks, Sybase, T-Mobile, Tetherball, 3i Infotech, Tier Technologies, TransferTo, TSYS, Twitter, U.S. Bank, VeriFone, Verizon, Vesta, Visa, ViVOtech, Waspit, Way Systems, Western Union, Wincor Nixdorf, WirelessLoyalty, Xipwire, Yelp, and Zong.

More information: Aite Group Mobile Payment Report.

Source: Aite Group

Google to Integrate NFC in “Gingerbread” Android OS

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Google CEO Eric Schmidt has indicated that the coming “Gingerbread” Android release will have integrated Near Field Communication (NFC), which will allow for interaction with hardware devices, and may well lead to a revolution in proximity payment processing via mobile phones, and a new boom of mobile payment startup companies. Schmidt made his comments during the Web 2.0 conference in San Francisco earlier today.

Using “tap and pay,” says Schmidt, the theory is that you will be able to walk into stores and do commerce, and eventually replace credit cards.

“Ultimately the technology is personal, secure, and an aggregating technology,” according to Schmidt. Google would expect to partner with payment processors, and the credit card industry believes the losses will be a lot less than with standard credit cards, he added.

View the full interview here:

Mobile Web Payments (WAP)

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The consumer uses web pages displayed or additional applications downloaded and installed on the mobile phone to make a payment. It uses WAP (Wireless Application Protocol) as underlying technology and thus inherits all the advantages and disadvantages of WAP. However, using a familiar web payment model gives a number of proven benefits:

  1. Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like. These pages have a URL and can be bookmarked making it easy to re-visit or share with friends.
  2. High customer satisfaction from quick and predictable payments
  3. Ease of use from a familiar set of online payment pages

However, unless the mobile account is directly charged through a mobile network operator, the use of a credit/debit card or pre-registration at online payment solution such as PayPal is still required just as in a desktop environment.

Mobile web payment methods are now being mandated by a number of mobile network operators.

A number of different actual payment mechanisms can be used behind a consistent set of web pages.

Direct Operator Billing

A direct connection to the operator billing platform requires integration with the operator, but provides a number of benefits:

  1. Simplicity – the operators already have a billing relationship with the consumers, the payment will be added to their bill.
  2. Instantaneous payments giving the highest customer satisfaction
  3. Accurate responses showing success and reasons for failure (no money for example)
  4. Security to protect payment details and consumer identity
  5. Best conversion rates from a single click-to-buy and no need to enter any further payment details.
  6. Reduced customer support costs for merchants since customers will complain to the operator.

It has however a drawback, the payout rate will be much lower than with other payment providers. Examples from a popular provider :

  • 92% with Paypal
  • 84 to 86% with Credit Card
  • 45 to 91.7% with Operator billing in the US, UK and different smaller european countries, but usually around 60%
  • However, there is in the world one exception to this rule, in UK it might give more payout percentage for a merchant to bill through the Payforit system than with a credit card.

Credit Card

A simple mobile web payment system can also include a credit card payment flow allowing a consumer to enter their card details to make purchases. This process is familiar but any entry of details on a mobile phone is known to reduce the success rate (conversion) of payments.

In addition, if the payment vendor can automatically and securely identify customers then card details can be recalled for future purchases turning credit card payments into simple single click-to-buy giving higher conversion rates for additional purchases.

Online Wallets

Online companies like PayPal, Amazon Payments, mHITs and Google Checkout also have mobile options. Here is the process :

First Payment

  • User registers, inputs his phone number, the provider sends him a SMS with a PIN
  • User enters the received PIN, authenticating the number.
  • User inputs his credit card info (or another payment method) if necessary. (Not necessary if account already existing) and validates payments

Subsequent payments :

  • The user re enters his PIN to authentify

Requesting a PIN is known to lower the success rate (conversion) for payments. These systems can be integrated with directly or can be combined with operator and credit card payments through a unified mobile web payment platform.

Source: Wikipedia