Mobile Payments

12
Sep
2014

15 things you should know about Apple Pay

So the internet came to a standstill on Tuesday night (literally for some) as Apple’s yearly Autumn product launch predictably took over everyone’s newsfeeds for a few hours. But, despite the hype over a bigger phone and the launch of a smart-watch, the most far reaching element of the announcements might turn out to be something a bit more practical.

The concept of smartphone payments has been on the precipice for the last few years in most of the developed world, looking for a catalyst to kick it into the mainstream, and with Apple’s weight behind it, we could be about to see some serious movement in this space. So forget about the new phone and smart-watch for a minute, and get up to speed on the ins and outs of Apple Pay. Here’s what you need to know.

  1. Apple Pay will let users pay for items at retailers that accept contactless payments by authenticating the transaction with just their fingerprint.
  2. This is facilitated through an NFC (Near Field Communication) chip which Apple has finally gotten around to adding to the iPhone.
  3. Apple Pay will only work with the iPhone 6 and 6 Plus as only those models include both the fingerprint scanner and the NFC chip. However, users will be able to use the service via the iPhone 5, 5S and 5C when paired with the NFC-ready Apple Watch.
  4. Credit cards are stored in the Passbook app. Card information is stored on the device, not in the cloud. This might allay some of the fears that users have after last week’s celebrity nude photo leaks.
  5. If you lose your iPhone, you won’t have to cancel your cards. You can use Find My iPhone to suspend payments just for that device.
  6. Individual transaction numbers are created for each purchase so no actual credit card numbers are used for enhanced security.
  7. Also, Apple won’t know what you bought, where you bought it and the retailer won’t get to see your name or card number at the point of sale like with a credit card.
  8. It will work with the three major payment networks: MasterCard, Visa and American Express. The end users’ bank will need to support Apple Pay as we’ll as the payment processor.
  9. It will be accepted in 220,000 retail locations on launch. These are retailers that already accept contactless payments.
  10. Merchants in the US will have to upgrade their POS hardware this year anyway with the launch of Chip & PIN cards in the States. These new POS terminals also accept NFC payments too which should further facilitate adoption.
  11. Retailers that will accept Apple Pay on launch include McDonalds, Starbucks and Disney World. Plus, users will be able to pay for things like Uber rides without creating an account.
  12. The credit cards that you already have on iTunes will automatically be added to Passbook. You can also add cards by taking a picture of them with your camera.
  13. Apple won’t charge users, merchants or developers to use Apple Pay for payments. They will collect fees from banks for any payments they facilitate.
  14. Irish-founded online-payment company stripe are integrated into Apple Pay to facilitate one-touch payments in iOS apps (their second big partnership announcement this month after the launch of the Twitter ‘Buy Now’ button).
  15. It will only be available in the US initially from October. No word yet on the international roll-out

If anyone is able to finally drag mobile payments into the mainstream it’s Apple. It’s both about persuading physical retail stores to facilitate mobile payments and encouraging consumers to start using it. Apple have serious form in bringing industries and end users together in new spaces so if anyone can do it, it’s them. Although, if you run out of battery, you better have some cash or a card handy!

Posted by Rob in Apple, Mobile Payments
18
Aug
2014

Amazon has Square & PayPal in it’s sights

Following my post from last week about the imminent entry of the big tech giants to the mobile payment space, it was timely that another one of The Big Four made public their intentions. During the week, Amazon made it clear that they also want a piece of the pie and announced that they plan to launch a suspiciously Square-like mobile card reader and app platform called Amazon Local Register.

And guess what? – they plan to undercut Square and PayPal on the fees they charge retailers by a whole percentage point (1.75% to Square’s 2.75%,and PayPal’s 2.7%). No surprise there then as Amazon have certainly been upping the ante recently when it comes to throwing their weight around, brazenly squeezing their suppliers. They also take a swipe (get it?) at Square’s perceived lack of retailer support by highlighting their ‘awarding-winning’ customer service.

Let the games begin.

http://www.youtube.com/watch?v=M6YXllIqD_E

Posted by Rob in Amazon, Mobile Payments, Retail, Square
09
Aug
2014

Mobile payments – still playing hard to get after all these years

Despite smartphone penetration continuing to explode around the world, a universal platform for mobile payments has yet to emerge. It seems that each of the last few years has been predicted as the year that mobile payments will finally take-off, and then – nothing.

By mobile payments, I’m talking about smartphone payments specifically, not SMS payments via feature phones which have actually been hugely popular in some emerging markets for years now. I’m not talking about mobile commerce either (i.e. using the mobile web to shop as you would on the desktop). I’m talking about using your phone as a means of making a physical in-store purchase. The technology has been around for years now and is the norm in some parts of Asia as well as being a huge success with some companies in the US (Starbucks makes 14% of their entire sales via mobile in the US!) but has not yet been more readily adopted across the board.

While it would be naïve to think that this year will be the year that mobile payments finally take-off, this has to happen eventually and there have been a couple of hints over the last few weeks that suggest that a mass market push could finally be on the horizon.

Some more of the big boys are joining the party

Although Google have made a couple of attempts at addressing this space, most of the other tech heavy hitters have remained strangely quiet. But that could all be about to change.

Apple has been biding its time over the last few years, choosing to steer clear of NFC, waiting for the right moment to flick the switch on mobile payments, but there has been talk over the last couple of weeks of finally making a move. Apparently, the company is on the verge of launching a mobile wallet that allows users to make physical in-store payments as early as this Autumn. And you can be damn sure that when they do, there will be serious movement in the space. Apple has 800+ million registered credit cards on file with iTunes. EIGHT HUNDRED MILLION! That’s 800+ million accounts that, with a flick of a switch, can automatically facilitate any mobile payments platform that Apple might roll out.

Similarly, there have also been hints from Facebook that the recently unbundled Messenger app will be integrated with mobile payments somewhere down the line too. And this is what it’s going to take really, the big boys joining the party, the platforms where users already have accounts and spend their time making it easy for them to be nudged onto making payments using their phones. And these guys certainly have the user clout to have a real impact here.

tech accounts

The future of mobile payments

Whatever form it takes, a growth in mobile payments is inevitable, however slowly it happens. Business Insider has recently compiled some predictions on the future of the space and gives a few reasons why this year might actually be the year we see some significant growth.

By 2018, both mobile payments and mobile commerce combined are to overtake desktop eCommerce in the US with mobile accounting for over $400 billion of transactions. In-store mobile payments alone are to account for $189bn of this figure, growing from $1.8bn in 2013. That’s 10x growth in five years.

There has so far been a bit of a chicken and egg problem around mobile payments with neither retailers or users seemingly pushing for it. Cash and cards are working just fine for both it seems. But consumers are slowly cutting the cord with cash (debit and credit cards were used more than cash for in-store payments for the first time ever in the US last year), and this is predicted to ease the transition from a consumer behaviour point of view into mobile payments.

From the retailer’s perspective, a rise in mobile card readers (and their corresponding apps) is expected to contribute to an uptake in mobile payments acceptance. 40% of small merchants in the US have already adopted mobile card readers and Square currently process $2.5 billion worth of transactions each month. The fact that Chip and PIN cards are finally being rolled out in the US means that retailers will have to update old systems anyway and more and more of them are expected to acknowledge mobile payment acceptance while doing so.

So could we be on the verge of a mobile payments explosion? We’ll just have to wait and see. While big things might be happening over the next 12 months, it still could be another couple of years until true mainstream adoption takes place.

mobile payments

Posted by Rob in Mobile Payments, Retail
18
Nov
2013

Is Coin The Solution To Carrying Multiple Cards?

While some of us wait patiently for smartphone payments to become a reality, Coin have taken a different approach and developed a device that allows users to ‘carry’ multiple payment options in a single card.

It’s a great product, and I can see it finding a niche among technophiles, but surely there’s a smartphone app out there that’s capable of doing something similar and building a critical mass, although there’s still the seemingly significant hurdle of changing consumer behaviour first, and that’s where Coin might have an advantage.

http://youtu.be/w9Sx34swEG0

Posted by Rob in e-Commerce, Mobile Payments, Tech