The Green Sheet Online Edition
August 08, 2016 • Issue 16:08:01
The state of mobile today - Part 2
Innovation in the mobile payments realm has been high for a number of years. Many contenders have developed products and brought them to market or intend to do so soon. Some, such as Apple Pay and Samsung Pay, appear to have had a relatively smooth ride. Starbucks has also enjoyed success with its mobile app. Others ‒ for example, the mobile carrier-backed Softcard (formerly Isis), which closed shop, and the recent termination of MCX's CurrentC beta test have not fared as well. However, observers have tended to agree that no winners have emerged yet.
With this backdrop in mind, we asked members of The Green Sheet Advisory Board to weigh in on the following:
- What is your opinion of the various mobile payment options available today?
- What technologies do you feel make for the best merchant and consumer experience?
- Do you see clear mobile payment winners emerging? Why or why not?
- Have you adapted your business model to incorporate mobile payments? If so, what have you done, and why? If not, why not?
Following is the second portion of responses we received. The first set of perspectives were included in Part 1 of this series in The Green Sheet, July 25, 2016, issue 16:07:02. Further responses will appear in The Green Sheet, Aug. 22, 2016, issue 16:08:02. Many thanks to those advisory board members whose participation made this feature possible.
Daria Rippingale, BillPro Pty. Ltd.
1. In my view, the three biggest players in the mobile space are Apple Pay, Samsung Pay and Android Pay (not including more ecommerce focused options like PayPal and bitcoin). While all offer similar services in concept, their acceptability and practicality differ depending on consumer location, spending habits and, of course, device.
Apple is frequently considered the most successful of these options due to the ease of use in store and higher adoption rate of Apple Pay as an in-app purchase option by major retailers such as Uber, Starbucks, Airbnb. Apple Pay uses contactless, near field communication (NFC) technology to wirelessly make the payment in store and also offers one-click, in-app payments for online retailers ‒ a service most other providers don't offer or have had little uptake with merchants to date.
While competing payment options offer the same in-store experience (contactless phone payments), it is only Samsung Pay which provides compatibility with non-NFC devices ‒ traditional swipe terminals, which are still used widely across the United States. This means in the fight for acceptability, Samsung comes out on top from a practicality perspective, with more than double the acceptance levels in-store in many countries like the United States, where NFC adoption has been slow.
All mobile apps have impressive features and are useful to customers, but none yet bridge the gap of offering a comprehensive phone payment option that is both terminal and device agnostic.
2. In a retail setting, NFC-enabled terminals ensure a more seamless customer experience than trying to interact with traditional terminals (via options like Samsung Pay). While this alternative option is beneficial (without it, a payment on a non-contactless device would be impossible), it is cumbersome and difficult to use, requiring a level of finesse from the user when holding their device to the terminal. A significant factor that has impeded mobile payment growth so far has been a lack of widespread support for NFC contactless payments in retail stores. This lack of support has forced mobile payment options to be considered by the user as a nice to have or alternative option, rather than becoming their daily go-to payment option for all purchases.
3. Not yet. The major players to date are consistently innovating, increasing their product scopes. Technology providers like Apple Pay are gaining significant traction due to their multichannel approach (strong focus on in-app purchases as well as in-store). That said, I don't see Apple Pay, or any other player, stepping too far ahead in the immediate future.
I believe the next two years we will see a shift in the mobile payments market, taking a far greater share of the in-person transaction volume. The main barriers facing mobile payment options are a lack of NFC acceptance, and participating card issuer acceptance. In the years ahead, these companies will work to increase the number of participating banks and supporting merchants, while contactless NFC terminals will be adopted more widely around the world ‒ creating a perfect environment for mobile payments to thrive and become a mainstay payment option of the future.
4. Over the last three years, BillPro has committed ongoing new product support for mobile payments. We work primarily with ecommerce and online merchants, the focus being online mobile payment acceptance, peer-to-peer payments and mobile wallets. In addition to this, BillPro offers a mobile-based payments terminal, which merchants can use for in-person payments ‒ with the choice of an in-app interface or mPOS card swipe alternative.
For online payments, BillPro offers modules for merchants to accept payments on phones and tablets, ewallet account and transfer services, bitcoin, and mobile tokenization for one-time payments. We have recently incorporated Apple Pay as a payment alternative for our merchants and will be keenly reviewing its performance in a pure ecommerce environment.
Peter Scharnell, Cayan LLC
1. When it comes to mobile payments, most merchants know the basics, and many are tapped into the biggest headlines about platforms like Apple Pay, Android Pay and Samsung Pay. Still, there's more to the story than that. Although this payment method got off to a slow start, it has potential to rise up the ranks as a go-to option at the register for many people.
2. ISOs and payment services providers that can facilitate mobile payments are beginning to provide smaller merchant locations the ability to accept solutions similar to larger retail stores. Customers are now using wallet technologies like Apple Pay and Android Pay, as well as smartwatches and other forms of wearables. While it's true that mobile payment technologies are still in the early stages of the lifecycle, we are beginning to see which ones are popular among consumers. As long as it's easy, provides a good user experience, and is fast and secure, users will give mobile payments a try.
3. With 700 businesses accepting Apple Pay and Android Pay, and Samsung Pay claiming support from more than 1 million stores, it's clear the tides are changing. Still small businesses are lagging behind, with many remaining cash-only to avoid credit card fees. Beyond this, mobile payments still face obstacles like fragmentation and availability beyond key markets. It's unclear who the true mobile payments winners will be; however, what is clear is that there will be many services and platforms that will not make the cut.
4. Nowadays, shoppers are driven by a desire for convenience and a strong awareness of security, both of which mobile payments offer. These are two reasons why Forrester predicts mobile payments will reach $142 billion by the end of 2019. At the end of 2014, that number was only $52 billion. To succeed, businesses need to give customers what they want, and as new mobile payment platforms make their way toward mainstream acceptance, shopper expectations will likely follow.
Cayan has made the investment into mobile payments and currently offers many mobile solutions to our merchants. Whether it's a wireless terminal or support for a specific wallet, Cayan's Payments-as-a-Service platform has our merchants covered for solutions that are available now and what's coming in the future.
Steve Sotis, eProcessing Network LLC
1. eProcessing Network believes that mobile payments are still emerging and the "land grab" is still wide open, with no clear winner in sight. There are basically two forms of mobile payments in play: mobile payments initiated by the end user and mobile payments initiated by the merchant.
Beyond the leverage of Apple Pay, Samsung Pay or Google Pay, many mobile payment offerings are meeting the needs of the fragmented mobile merchant market segments that include "pay within the app" or "pay with an app" in conjunction with a variety of card reader devices that function with mobile devices.
The profile of mobile merchants is very diverse – consisting of businesses or individuals that facilitate festivals, flea markets, garage sales, seasonal rentals – the list continues to grow. And usage of merchant-initiated payments through device attachments is more readily adopted than usage of in-app payments by the aforementioned companies, at least for the time being.
2. Technologies that create a positive merchant and consumer experience are emulating from software-as-a-service (SaaS)-based retail/restaurant POS systems. These SaaS-based platforms and systems allow for unique vertical merchant markets to be addressed. The hardware and software are disruptive to the status quo of the past 30 years. These SaaS-based solutions are elegant, user-friendly, intuitive and affordable. They also help keep the merchant out of PCI scope by using semi-integrated POS terminals or other in-app solutions.
The new world of "hardware" (tablets, phones) is far less expensive than the legacy hardware systems of the past, and unlike legacy hardware, rarely requires any updates since the software is updated ubiquitously via the platform.
3. Perhaps a clear winner of the mobile market will emerge in the future; however, it's more likely that there will be several winners or technologies that are preferred by the merchant and the end user. There is no one clear winner in the card issuing world, just certain card brands with more cards issued than the others. And they are ranked accordingly, as will be mobile payment technologies and companies; the market ultimately will determine and define the rankings and winners.
4. eProcessing Network has been involved in mobile payments since the late 1990s and has continued to evolve accordingly. As a payments company, ePN continually develops and enhances technology, in particular, mobile payments. We offer an elegant payment app for merchants to use in tandem with a variety of unique, state-of-the-art mobile payment devices that either plug into a smartphone or tablet or connect via Bluetooth.
These affordable and efficient devices support both EMV (Europay, Mastercard and Visa) and MSR (magnetic stripe reader) card types. In addition, ePN offers simple to use mobile software development kits for software developers to incorporate within their software products and services.
Jeff Thorness, Forte Payment Systems
1. Today's mobile payment options have made creative use of the technology available and are very intriguing to watch as adoption continues. One of the biggest issues I have noticed is that education and training are connected in a relationship with adoption rates, and it works both ways. In areas where there is limited adoption of mobile payments, aspects that subsequently help advance adoption, like education and training, are lacking.
Similarly, where adoption is increasing at a higher rate, you'll find these aspects are better fleshed out and work to draw even more users, thus feeding adoption rates even higher. In this way, the options are limited in some areas and tend to stay that way. In other places, you might find that mobile payments are really taking off, and the factors that can continue this advancement are well supported.
2. Notifications are an interesting technology that I've noticed within some of the current mobile payment options out there. This technology can have a significant impact on the consumer experience, as it keeps them engaged and updated in real time with card activity.
Additionally, both NFC and magnetic secure transmission (MST) are fantastic. In particular, MST has great potential based on current terminal deployment. As we continue to see the EMV rollout with NFC-enabled terminals, the gap between NFC/Apple Pay and MST acceptance locations will shrink rapidly.
3. There are three dominant mobile payment players: Starbucks, Apple Pay, and Samsung Pay. These are smart, interesting applications that I'm eager to keep using or to try for the first time.
Starbucks, for example, has identified and mastered the user experience and essentially redefined the loyalty program. Its widespread adoption and success demonstrate the thoughtfulness of its design and the security of its position as a forerunner in the mobile game. Apple Pay and Samsung Pay are two other players that I'm keeping my eye on. I anticipate these two will continue to make big moves in the industry.
4. Yes, Forte has adapted to make room for mobile payments and will continue to adjust as needed. We currently support NFC/Apple Pay at our processing core and are working to enable these capabilities across all of our solutions.
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