Mobile Payment Magazine

MobilePayUSA Launches Virtual Terminal for Mobile Payments–Without NFC

by

TechCrunch Disrupt 2010 Startup Alley Winner MobilePayUSA announces that private beta-testing of the company’s non-NFC mobile payment solution has begun at the Tutti Frutti Frozen Yogurt in Balboa Island, California. Instead of waiting for NFC technology to become viable, Tutti Frutti is using the Virtual Terminal offered by MobilePayUSA for PC-based POS systems.

Unlike other e-wallets, MobilePayUSA does not use RFID chips embedded in smart phones that hold credit card numbers in order to process payments. Credit information is never stored on the phone or shared with the merchant with MobilePayUSA. This difference, according to MobilePayUSA, will prove to make their system more secure from the real
threat of illegal skimmers and hackers.

The company says their platform–unlike their NFC competitors–requires no expensive hardware upgrades. Instead, MobilePayUSA solution uses existing hardware to make the dream of mobile payments a reality, thus taking the cost hurdle out of the race for nationwide adoption.

MobilePayUSA will begin public beta-testing of their system by Q4 2011.

Source: MobilePayUSA

PayPal Introduces Mobile to Mobile NFC Money Transfers

by

PayPal introduced its money transfer widget at the MobileBeat technology conference in San Francisco on Wednesday. PayPal’s new widget uses Near-Field Communications technology, which lets you pay for purchases with a wave of your smartphone.

PayPal’s widget allows for money transfers between two NFC-enabled phone holders. Say you want to transfer money to another PayPal user. They’ll request a specific amount of money from you on their phone, and after you tap your NFC-enabled phones together, the cash transfers from your PayPal account to the other.

Read more, via Wired.com.

Banks Feeling Threat of Alternative Mobile Payment Providers, Says Report

by

Faced with growing competitive threats from non-traditional sources, such as alternative payment providers, banks around the world have aggressively swung their attention to emerging mobile platforms to defend their payments revenues, according to a new report from KPMG International.

Adding to the urgency, 84 percent of banking and financial services (FS) executives said mobile payments will have significant importance to their business within the next one to four years.  Furthermore, 73 percent suggested that mobile payments would be mainstream within the next four years. [Read more…]

Mobile Banking Gets Riskier

by

“Digital wallets” that let consumers pay with the swipe of a smartphone could make the plastic credit card obsolete. But the technology also could chip away at consumers’ privacy—and tempt them to spend more than they otherwise would.Using a technology known as “near-field communications,” or NFC, consumers will be able to buy items simply by passing their phones in front of a sensor at the checkout counter. The problem, some critics say, is that the ability of merchants, coupon services and others to extract more information about where people shop and what they purchase amounts to an invasion of privacy.

Read more, via WSJ.com.

Mobile Payment Dangers

by

It’s been hard not to miss the steady stream of news suggesting that some time soon the U.S. will catch up with the rest of the world when it comes to using mobile phones and other devices as digital wallets. If you don’t know what we’re talking about, the idea of mobile payments is pretty simple: You go to a store, and rather than whipping out cash or plastic, you offer up your cell phone, which pays for your purchase and charges a credit card that you’ve used to open your mobile phone bank (as it were)… What some refer to as “contactless payment” makes spending remarkably easy, which is why the two of us, progress lovers both, are at least a little nervous about the implications of this technology. Our concern is based on an ur-principle of behavioral economics — mental accounting. [Read more…]

NFC Mobile Contactless Payment Transactions to Reach $50 Billion Worldwide, Says Report

by

A new report from Juniper Research forecasts that global NFC mobile contactless payment transactions will reach nearly $50 billion worldwide by 2014. Following on from the Orange Mobile Payments service launch in the UK, 2011 and 2012 are expected to be banner years for NFC service rollouts. [Read more…]

PayPal, Apple and Nokia Lead in Mobile Payments Brand Trust

by

Trust and familiarity are the key drivers in consumer preference for mobile payment services, according to a new study. The survey by GfK NOP, a global market research agency, covered nine countries (US, UK, France, Italy, Germany, Spain, South Korea, Brazil and China) and included 8,603 online interviews, with each country’s sample designed to represent their online population.

The findings revealed that what consumers are looking for, before they feel comfortable adopting a mobile payment service supplier, is the trust of a financial brand and familiarity of a mobile brand.

Consumer appeal for mobile payment services varies across all countries, which, broadly speaking, fall into two categories: countries with established financial payment infrastructures, and countries whose financial infrastructure is young and still developing.

Of the nine markets where research was conducted, South Korea was the only nation that offered established mobile payment services to the consumer market. Globally, 62% of consumers find mobile payments appealing. This is higher among certain key groups, including: younger consumers aged 16-24 (75%); innovators / early adopters (74%); and current smartphone owners (72%).

There is, however, considerable variation between nations. Developing markets in China (82%) and Brazil (73%) find mobile payment services the most appealing, whereas the more established payment systems in developed markets, like the US and Europe, mean appeal in these nations is more limited (around 50%), since the existing chip-and-PIN systems offer a convenient and already trusted route.

Why the delay in Mobile Payments?

Near Field Communications (NFC), the technology that supports close proximity mobile payment services, has been around for many years. However, the NFC-enabled mobile devices and service support have been delayed year on year. Why, when the service seems so attractive to consumers and businesses alike?

One of the reasons for this delay to market is that there are so many brands from different industry sectors interested, posing the critical question: ‘Who should own the relationship with the customer?’ The incentive for financial institutions is that Mobile Payment embodies a critical evolutionary step. It will modernise their service offering and refresh their brand image – things that are much needed after the negativity of the recent financial crisis.  For mobile network operators, the attraction of this fledgling sector is the opportunity to diversify their revenue streams – to branch out from their core business of voice, text and data. And, for Smartphone handset and operating system (or OS) providers, mobile payment services represent an important new data source, that brings together online and offline purchasing behaviour – something that will enhance the value of their ecosystem to advertisers.

Working out how all these different companies work together, and – importantly – who owns the customer relationship, has been the key barrier to rolling mobile payment services out for most countries.

The adoption funnel: trust, consideration and preference

At a category level, GfK’s study shows that the financial brand category has the highest levels of trust, consideration and – importantly – preference among consumers (48%). Within this category, high street banks have the highest levels of trust, consideration and preference. Consumers feel they can be relied upon to safely process payments and manage personal finances, and view the move to mobile payments as a natural next step.

Mobile and telecommunication brands receive significantly lower levels trust, when it comes to controlling financial transactions (10%). Within these brands, mobile network carriers have the highest levels of trust, consideration and preference, although still lag behind financial brands. Within this category, mobile network carriers have the highest levels of trust, consideration and preference out of all the mobile brands, but they are still quite far behind financial brands. Adoption scores for network carriers, mobile handset and OS providers do, however, see significant uplift among smartphone owners, younger consumers and early tech adopters.

Consumer preference for mobile payments providers. Source: GfK NOP

At brand level, PayPal, Nokia and Apple came out very strongly, amongst the brands that we tested. PayPal has experience in delivering remote mobile payment services to consumers and boasts high levels of trust and consideration. Most interestingly, it has the highest brand preference of all those tested in this research. At a global level, trust usually drives mobile payment service preference. However, for PayPal, the drivers are completely different. The fact that consumers have already used PayPal to send or receive remote mobile payments before drives consumer preference for the brand when it comes to proximity based mobile payments. Closely following this familiarity of PayPal’s remote service (30%) comes the fact it is deemed a specialist in processing payments generally (21%).  Trust (17%) remains important for PayPal, but is only the third most important stated purchase driver.

 

Nokia in China is among the most trusted brands of any category in the research, receiving a score of 38% – much higher than its global average of 14%. The reason for this level of Chinese consumer preference is, again, trust – one-in-two people in China stated trust as the main driver of preference. Nokia has built a strong brand in China over the years, based on delivering reliable mobile solutions to a large proportion of the Chinese population.

Apple also has a very strong brand and this has driven higher levels of trust among their existing customer base – raising their global trust average of 11% to 38% among iPhone owners. Those that own iPhones are already used to using their iTunes account to pay for apps and media content, so the step to paying for physical products with their iTunes account is less of a stretch.

These three brand examples show that, whilst financial brands have built up high levels of trust, mobile-based brands such as Nokia and Apple, and relatively new financial brands like PayPal, have the potential to quickly disrupt this seemingly comfortable position.

Ryan Garner, Director in GfK Technology, comments, “Creating a mobile payment service that consumers are comfortable adopting means leveraging the trust placed in financial brands, but it is also vital to have a presence in the mobile sector. By tapping into all of these strengths, a mobile payments solution would quickly gain momentum with consumers and put an end to the delays experienced by NFC-based services in recent years.”

About the Survey

GfK conducted 8603 online interviews in the following countries; UK (n=853), US (n=1004), France (n=1000), Germany (n=999), Italy (n=1103), Spain (n=997), Brazil (n=987), China (n=659) and South Korea (n=1001)

The sample in each country was designed to be representative of the online population. In the UK, US, France, Germany, Italy, Spain and South Korea internet penetration is high enough to capture a sample that is broadly representative of the population as a whole. However, in China and Brazil the interviews collected online will not be representative in the same way. The research conducted in Brazil and China will be representative of the online population, but these people are more advanced in their views on technology, live in more urban areas and are likely to be wealthier, than the population as a whole.

Source: GfK NOP

Mobile Payments Enter A Disruptive Phase 2011

by

While Near Field Communication has created a lot of buzz in the mobile payment industry, it is clear that there remain significant hurdles before the technology is standard in U.S. mobile commerce.

Forrester Research recently published a report: “Mobile Payments Enter a Disruptive Phase,” excerpted below:

The pace of innovation in mobile payments is accelerating. 2011 is finally the year when Near Field Communication (NFC) will reach the hands of millions of consumers, while initiatives in the digital micropayment arena are accelerating.

While we believe that mass-market adoption of mobile payments is still years away, new entrants — be they mobile operators, alternative payment providers, or online players — have the potential to disrupt existing payment systems. Consumer product strategy professionals should anticipate different disruptive scenarios and determine the likelihood of them happening.

To define the correct strategy, be it defensive or offensive, they need to measure the convenience of their new products and services. And, at a tactical level, they shouldn’t underestimate the need to educate consumers about new payment methods.

Table of Contents

  • Making Sense Of Mobile Payments
  • Mobile Payments Are Disrupting The Existing Payments Landscape
  • Mobile Payments: What Product Strategists Should Anticipate

Recommendations

  • Anticipate Different Disruptive Scenarios And Think About Convenience
  • Supplemental Material
  • Related Research Documents

More information: Forrester Research.

Apple and Square to Partner for iPhone 5 Mobile Payments?

by

One of the most common iPhone 5 rumours is about Near Field Communication (NFC), the technology that allows mobile payments with a wave or “tap” of a device. Jack Dorsey, the founder of Twitter and mobile payment company Square, is now officially available in the iPhone store.

Radu Tyrsina at IT Pro Portal, “Square seems to be a pretty comfortable way to perform mobile payments. The device that one uses to perform the card credit swipe is a small square-shaped object that can be attached to an iPhone, iPad or other smart device to perform the transaction. This throws into doubt whether the iPhone 5 will come with NFC technology after all.”

via ITProPortal.com.

Ingenico NFC payments technology certified by GIE Cartes Bancaires

by

Ingenico, a provider of payment solutions, was just awarded by Groupement des Cartes Bancaires the first certification for the acceptation of contactless payment by card or mobile phone, delivered in France to a provider of terminals and payment solutions.

Groupement des Cartes Bancaires issued Bulletin no. 12 V2 concerning the “deployment of contactless acceptation.” The bulletin takes account of the specifications used in the mobile payment experiments “Payez Mobile” in the cities of Caen and Strasbourg and those of “Nice, contactless city”. All registered “digital cities” (currently Bordeaux, Caen, Lille, Marseille, Nice, Paris, Rennes, Strasbourg and Toulouse) will base themselves on those specifications, thereby speeding up the development of contactless payment in France.

According to Frédéric Leclef, Managing Director of Ingenico France, The principle of contactless payment is well known in France. Users are willing to change terminals to take advantage of this new technology”.

Right from the start, Ingenico adopted NFC for transport applications, then payment. This certification is a new and decisive asset for the propagation of contactless technology.

Source: Ingenico