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Table of Contents

Lead Story

Light alleviating a dark decline

News

Industry Update

Legislative outlook: Interchange bills less likely than ID fraud rules

First Data's composite security system - a game changer?

TSYS, FNBO enter joint venture

Trade Association News

Features

GS Advisory Board:
Positive economic signs and actions - Part 1

Online banking in Canada:
What happens next?

Joseph Iuso
UseMyServices Inc.

Research Rundown

Selling Prepaid

Prepaid in brief

Win-win scenarios abound at Prepaid Expo

Views

Are banks losing grip on payments?

Patti Murphy
The Takoma Group

Dial or smile

Justin Milmeister
Elite Merchant Solutions

Payments industry issues:
First quarter 2010

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Parting thoughts for readers

Jon Perry and Vanessa Lang
Merchant Services Inc., Texas

Police warn of new skimming devices

Nicholas Cucci
Network Merchants Inc.

Ripples on the mobile Web

Dale S. Laszig
Castles Technology Co. Ltd.

Digging into PCI - Part 9:
Restrict physical access to cardholder data

Tim Cranny
Panoptic Security Inc.

Company Profile

Retail Decisions Inc.

New Products

A mobile payments bundle

MerchantWARE Mobile
Company: Merchant Warehouse

Statistical analysis of prepaid

The Stats Tool
Company: Stanton Consultancy Ltd.

Inspiration

Unleash the power of networking

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

March 22, 2010  •  Issue 10:03:02

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Forum

Mobility in payments: Not a zero sum game

Paul Rasori's article for The Green Sheet ["Let's be smart about smart phone payments," March 8, 2010, issue 10:03:01] on security for mobile payments was well written but illustrated a myopic (VeriFone) view of the mobile payments world because it subtly implies that only VeriFone's product or products like it offer the type of security needed for mobile payments.

Rasori's claim that the process of manually entering credit card numbers into a mobile device may not offer appropriate security unless the card is swiped through a device that attaches to the iPhone is quite convenient, considering that his company now sells a device that does precisely that.

I think providers of embedded solutions and Web-based browser solutions, who offer solutions on dozens of different types of cell phones, would disagree with his argument. Mobile payments is an emerging and exciting market.

For the years I have been in the wireless POS sphere the market has continued to grow. But the market is evolving now, and the fears Rasori tries to plant in his article are without foundation or proof.

I am unaware of Visa taking a public stand against manual entry of a credit card number on a mobile phone. Qui Tacet Consentire (Silence gives consent) in this case means Visa knows about it and is allowing it. Rasori mentions that all the apps at the Apple App Store claim to be secure, as does VeriFone's.

Can it be proven that manual entry apps are not secure? VeriFone's game plan (ISOs take note) includes going directly to merchants with their product and gateway service, while other providers continue with the more traditional model of working the new markets through merchant service providers.

With 14 to 18 million merchants in the mobility pool, it is not a zero-sum game. Many methods are available, and the smart ISO who signs a merchant up for mobile payments had better have a hardware fallback for my predicted 20 to 25 percent of merchants who will become dissatisfied with the limitations built into mobile payments on their cell phone.

Some of these are no PIN debit, no multi-app capability, and difficulty and confusion in using the device simultaneously with the other apps in it, including that primary reason the iPhone exists - to function as a phone.

The key element here is, as Rasori said, "Be smart" but, let me add, expand your possibilities. Be smart in helping your merchant. Be smart in selling the right product for the right merchant. Be smart for your own business and your own profitability.

Be smart and decide whether to sell a mobile app or a full featured, multi-application device. Be smart and sell against short-term convenience, and sell for your merchant's needs and their business.

Until it can be proven that a mobile application is inherently and demonstrably risky, proceed with the attitude that there is more than one way to sell mobility. In many respects, selling to the millions of mobile merchants is a bit like "herding cats." They are spread out and share few business models with each other. The elements they do share are hard to pin down in a strategic sales plan.

Nevertheless, the opportunity is there. Seek it without fear, and sell your merchant the best solution for them. It might be WAY Systems. It might be a mobile app. It might even be ... VeriFone.

Tim McWeeney
WAY Systems Inc.

Tim,

We shared your letter with Paul Rasori; here is his response:

Tim's overlooking the rate premium that the card brands levy for card-not-present fraud risk. And in the real world, not all phone and PC platforms are free from malware. ISOs can seize an opportunity that provides real value customers can relate to: lower fees. Smart phones aren't for every merchant, certainly, but they're ideal for potentially millions who won't buy dedicated systems.

We, at The Green Sheet, appreciate both of you for having this discussion. Hearing from expert POS solutions providers can only help our readers make informed decisions about how to meet their merchant customers' needs.

Editor

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