'Net Features : mobile payments

Is PayPal on the Ropes?

Mike Phillips — Fri, 27 May 2011 18:19:00 GMT

The hits are coming fast and furious to PayPal in what's adding up to be the most serious threats to the payment system giant to date.

Three of the most powerful banks in the U.S. – Bank of America N.A., JPMorgan Chase & Co. and Wells Fargo – have come together to create clearXchange, a person-to-person mobile payment system. Customers can transfer money using a mobile phone number or email address. This is a direct shot at PayPal, which has been the only real game in town for person-to-person payments; most notably on eBay but used in many other ways. Convenience and security are the selling points for clearXchange, and a massive customer base will help, too. Chase alone has 26 million active checking accounts.

"Our customers want easy, safe and innovative ways to send and receive funds electronically," the Wells Fargo spokesman says. "The most natural way to do that is with your bank, where you keep your money."

Then Google jumped into the fray by partnering with MasterCard to release Google Wallet, a mobile payments system that allows consumers to use credit and debit cards to pay on the go. Soon, all credit and debit cards will be integrated into the system. Whenever Google launches a competing product, the target is wise to worry.

But PayPal will not go down without a fight. They are suing, claiming Google stole trade secrets and employees, as well as reneged on a signed deal to use PayPal to process payments in the Android app store. Some of those former employees are also named in the lawsuit for providing Google with trade secrets.

PayPal Adds Heat to the Mobile Payments Fire

Linc Wonham — Fri, 29 Apr 2011 16:00:00 GMT

PayPal parent company eBay is on a bit of a tear in the acquisitions department, and the latest move adds heat to an already sizzling mobile payments industry.

PayPal has acquired Boston-based mobile payments startup FigCard for an undisclosed amount, merely a week after eBay purchased WHERE to bolster its positions in local, social and mobile commerce.

In the announcement on PayPal’s blog, senior director of mobile Peter Chu described FigCard as having “developed an extremely easy way for merchants to accept mobile payments in stores by using a simple and very low cost USB device that plugs into the cash register or point-of-sale terminal. All the consumer needs is the Fig app on his or her smart phone. We loved their approach to point-of-sale, particularly because it was driven by the same vision that we have at PayPal – in the future, transactions can be as smart as a computer and not as dumb as paper. We won’t need our physical wallets. We’ll be able to pay any way we want, from any device, anywhere in the world with both flexibility and privacy.”

The mobile payments space is hotter than ever as major corporations such as PayPal, Visa, MasterCard, American Express, Google, Apple and others compete to find the best solutions for turning our smartphones into wallets, and startup software and technology companies such as FigCard and Payfone are either being acquired or receiving funding as in the case of Twitter founder Jack Dorsey’s Square with Visa.

Add location-based services such as Foursquare and Gowalla into the mix, and daily deals leaders such as Groupon and LivingSocial -- and now also Facebook and Google -- and mobile commerce is about as exciting and explosive as any other category on the Web.

New Index Shows Strong Growth in Mobile Payments

Linc Wonham — Thu, 31 Mar 2011 22:30:00 GMT

Mobile payments provider Zong has released the first installment of a new monthly report called the Zong Payment Index (ZPI), which tracks the spending patterns of the platform’s global user base and is broken down by its top 40 markets worldwide.

The ZPI is designed to reflect consumers' willingness to use mobile phones to buy digital goods online, their ability to use mobile phones to make purchases and the cost of mobile payments as determined by mobile operators’ fees.

“The ZPI helps us understand how our customers are using Zong and how we can improve the experience for them,” says CEO David Marcus. “We are dissecting how the different factors such as merchant availability and operator policies have a huge and direct effect on consumer behavior.”

The first installment of the ZPI introduces data and analysis up to February 2011. A summary of the key findings includes the following:

The global aggregate index shows that the average monthly spend per Zong user is up 37 percent in the last 12 months. This growth is attributed to an increase in available merchant locations, lower transaction fees and the introduction of higher spending limits set by mobile operators.
Total spend per Zong customer increased more than 50 percent in the last 12 months in Canada, Switzerland, the Czech Republic, Germany and The Netherlands. Growth in user spend is primarily a result of operators changing spending limits and allowing customers to spend more per transaction.
The monthly spend per user in the U.S. decreased 8 percent from January 2011 to February 2011. This was primarily driven by a top-tier carrier temporarily decreasing the monthly spending limit from $100 to $25. The limit has since increased back to $100, allowing for an expected growth in monthly spend per customer.

Zong, which is the mobile payment provider for Facebook Credits and is accepted at over a thousand digital merchant sites, will continue to release the ZPI on a monthly basis.

Process Payments on Your Mobile

Administrator — Mon, 07 Feb 2011 21:10:00 GMT

Are you interested in processing payments through your mobile device? Who isn't! I can think of about a dozen instances where that might come in handy right now.

Sage Payment Solutions just released its Sage Mobile Payments product today and for the SMB's among us it is most definitely worth having a look. The offering, which is bundled with a Sage merchant account (of course), gives SMB's the ability to accept credit and debit cards on over 400 types of mobile phones and computing devices like tablets. Pretty interesting, particuarly for sales people on the move.

The mobile payment solution from Sage is available with an optional card reader (which includes end-to-end encryption from the card reader device to the application) and the whole solution is PCI compliant. The system will soon integrate with Sage Exchange to automatically update a range of accounting, enterprise rsource planning, billing and time tracking systems with the credit and debit card transaction infomration.

Research firm The SMB Group is currently conducting a Small and Medium (SMB) Business Payment Solutions Study. Preliminary data indicates that just 3 percent of SMBs accept mobile payments today but that number is forecasted to increase to 7 percent in the next 12 months and 16 percent by the end of 2012.

PayPal Revs Up its Mobile Payments Service

Linc Wonham — Thu, 20 Jan 2011 21:54:00 GMT

Mobile technology company Usablenet has announced a new integration with PayPal’s mobile payments product, Mobile Express Checkout, to enhance payment offerings on mobile websites. Usablenet can now extend PayPal’s Mobile Express Checkout to mobile commerce websites and other supported solutions such as mobile applications, tablets, Facebook and other social media, as well as in-store kiosks.

Usablenet owns a technology platform that extends all website features, functionality and content to customers wherever they are. Its clients include Amtrak, American Airlines, Estée Lauder, FedEx, Hilton, JCPenney and JetBlue.

“Given our significantly shared client base with PayPal, we are thrilled to be able to extend PayPal to mobile and to our other solutions,” said Usablenet President Nick Taylor. “Imagine the power of extending PayPal not only to consumers on mobile phones, but also to those shopping at an in-store kiosk powered by Usablenet or on Facebook where we provide the shopping experience.”

With more than 90 million active users worldwide, PayPal’s total payment volume represents 16.5 percent of U.S. e-commerce and 15 percent of global e-commerce. Over the 2010 holiday shopping season, PayPal experienced a 300-percent increase in mobile payments volume and closed out 2010 with $750 million in mobile payments volume – 50 percent more than the $500 million parent company eBay projected earlier in the year.

“Usablenet empowers top e-commerce merchants throughout the world,” said Bill Zielke, PayPal’s Senior Director of Merchant Services. “By integrating PayPal’s Mobile Express Checkout with Usablenet’s offerings, businesses can enable consumers to speed through checkout securely using their mobile phones.”

Starbucks Gives Mobile Payments Industry a Jolt

Linc Wonham — Thu, 20 Jan 2011 02:00:00 GMT

Starbucks, one of the most iconic corporations in the U.S., has rolled out a mobile payments program that will enable customers to make purchases with their smartphones. Never mind that the same near-field communications (NFC) technology has already been in use in other parts of the world for several years, this will have a significant impact on the emerging mobile payments industry in the U.S.

The program will be available at every Starbucks location across the nation, and customers can download the free Starbucks Card Mobile App for use on select BlackBerry, iPhone and iPod devices. Users then will be able to pay for their purchases by holding the app’s on-screen barcode in front of scanners placed in more than 7,500 U.S. stores.

The U.S. is much later to the mobile payments party than parts of Asia and Europe, where consumers routinely pay for things with their smartphones. But if any U.S. company can push something into the mainstream almost overnight, it’s most likely Starbucks.

The question, then, is not whether mobile payments will finally catch on in the U.S. Instead, now that they are about to catch on – and most likely fairly quickly – the question is, what does it mean for the rest of the industry?

For dozens of startup companies that have been establishing themselves in the mobile payments space the past few years, the outlook is a little murky. The one probably known to most is Square, but there are many others including Zong, Venmo, Bling Nation and FaceCash that would suffer the consequences if mobile payments took off without them.

Other, much (MUCH) larger companies such as PayPal have been working extremely hard on capturing the mobile payments market in the U.S. The new Starbucks app has a PayPal integration, but that’s not to say that will always be the case – with Starbucks or with the next giant U.S. corporation (Target or McDonald’s, for instance) to roll out a mobile payments program.

Then there are the credit card companies and the banks, which have also been hard at work trying to shape any developments in the U.S. mobile payments market to fit their own objectives. Visa announced two separate pilot mobile payments programs last fall, one in partnership with Bank of America and the other one with Bancorp. And back in August, MasterCard announced the purchase of European payment service provider DataCash to better position itself in the event that the U.S. market gained any traction in 2011.

It appears that the U.S. mobile payments market is now about to gain some serious traction after several years of running in place. So whoever considers themselves serious players in the space had better be ready to play.

Emerging E-Payment Providers

Linc Wonham — Mon, 13 Sep 2010 01:37:00 GMT

With the advent of mobile commerce technologies and increasingly higher standards regarding consumer data transmission and storage, the online payments industry is one of the most rapidly evolving areas of e-commerce. Today’s merchants face the difficult task of complying with the latest security standards while trying to remain flexible enough to integrate with a variety of new devices and systems adopted by online shoppers.

Most of the major credit card companies and financial institutions are testing and developing new innovations in online payment solutions, as are mobile carriers and familiar providers such as PayPal, Amazon and Google, as well as an array of lesser-known companies and startups. The potential payoff for having the right payments solution now could be higher revenues and fewer headaches down the road for e-commerce merchants, though it’s near impossible to predict how things will ultimately unfold.

Here we take a look at some of the emerging players in the mobile and alternative payments category:

CRE Secure
Merchants that opt for CRE Secure’s patent-pending Clone technology get a PCI-compliant payments system that integrates with their existing shopping cart program and maintains their current banking relationships. Customers’ card transactions are hosted in a secure data center without any disruption to the shopping process, providing a fluid but secure transition during checkout and cutting down on shopping cart abandonment. If the retailer or merchant already has an account with a participating credit card processor, they are responsible for a monthly fee plus transactions fees.

Braintree
Like CRE’s service, Braintree Payment Solutions takes the merchant outside of the scope of PCI compliance requirements by authenticating customer sales on their own servers and providing the retailers with a token of each transaction. Braintree’s transparent redirect receives the consumer credit card data on a form that is sent directly to the company’s secure and compliant servers, effectively eliminating the merchant’s server from the transaction. Like CRE, Braintree charges a modest transaction fee on top of a monthly charge for using the service.

eBillme
Customers shopping on a merchant’s site can select eBillme as their safe, cardless payment option, and the company sends a bill for the amount of the transaction to their e-mail address. It appeals to shoppers looking to stay out of credit card debt and those who are vigilant about protecting their financial data, and the solution relieves retailers from the burdens of operating costs and transaction rates.

Zong
Zong currently works with e-commerce merchants and social networks to provide a frictionless mobile payments solution for shoppers. When users hit the Zong payment button on a site, a payment screen appears and the shopper types in their mobile number. The consumer confirms the purchase with a secure PIN number, and no credit card or financial data is transferred in the process.

Visa, MasterCard Jockeying for Mobile Payments Position

Linc Wonham — Sun, 22 Aug 2010 19:45:00 GMT

Two of the largest global credit card companies made separate moves toward wireless payment solutions, further proof that mobile payment processing continues to be one of the biggest developments in recent e-commerce memory.

Visa, the world’s largest payment processor, announced a partnership with Bank of America in which the two companies are launching a test program that will allow customers to use their smartphones to pay for in-store purchases starting in September and running through the end of the year. Visa is set to launch a similar pilot program in partnership with U.S. Bancorp beginning in October.

Earlier in the week, MasterCard announced its $520 million acquisition of European payment service provider DataCash, a deal that is scheduled to close in October. DataCash processed nearly a quarter of a billion e-commerce transactions in 2009, and the move improves MasterCard’s position to compete in the mobile and micropayments e-commerce markets.

The developing wireless payments space is projected to become more than a $633 billion industry by 2014, and these two payments processing frontrunners are racing one another to create new forms of payment for increasingly mobile consumers. The best strategy for e-commerce merchants right now is to closely monitor each development and to put themselves in the best possible position to accept these new payment products with minimal integration challenges.

Mobile Payments for Physical Goods

Pete Prestipino — Tue, 18 May 2010 14:32:00 GMT

According to a recent report from ABI Research, mobile payments in the U.S. could reach $2.4 billion in 2010, growing by 100 percent in one year. The problem is that mobile payments still represent just eight percent of the total projected ecommerce market. Compare that to the Japanese market, where physical goods billing is a commodity, and mobile payments make up almost 20 percent of ecommerce. Adding physical goods billing in the U.S. would easily double ABI’s predictions.

As you might guesss it is a competitive market and one that requires further monitoring and exploration.

Mobile payment solution provider mopay today anounced that it supports the the purchase of physical goods through their platform in 28 countries. mopay's product line is pretty deep including mopay web (ideal for digital goods and a competitor of PayPal), mopay wap (a mobile payment system that puts charges on a phone bill), and mopay sms among others.

The scope of mobile payments varies significantly between global markets. As of today, mobile payments in the western hemisphere are primarily used to purchase digital and virtual goods – such as music and in-game items – via a mobile phone account. In selected Asian and European countries, mobile phone users are able to purchase virtually everything from tickets to movie downloads to physical goods through their phone bill.

“mopay’s ultimate goal is to not only be a major payment option for digital and virtual goods, but for all kinds of purchases,” said Kolja Reiss, managing director of mopay, Inc. “The Asian market is once again leading the way in purchasing physical goods via mobile phones and other markets are hot on their heels. By constantly adjusting our offering to keep pace with new developments, mopay actively pushes mobile payments to essentially become a replacement for cash and other intricate methods of payment, foreseeably eliminating the need for the traditional ‘wallet’ as we know it.”

Mobile Subscription Payments with Zong

Pete Prestipino — Tue, 22 Sep 2009 15:00:00 GMT

Publisher payment service Zong launched a subscription-based mobile payment service today.

Zong customers can extend a recurring bill-to-mobile option of up to $9.99 per month to their membership base, marketing an extension of its pay-as-you-go feature popular among social networking applications, virtual worlds and online games. Zong currently reaches more than 1 billion mobile users worldwide.

Users bill the membership fees to their mobile phone by entering their 10 digit mobile phone number online, receiving a four digit confirmation PIN by SMS text, then entering that PIN online to complete the purchase. The monthly membership fee then appears as a line item on the user’s monthly mobile phone bill.

“Subscription-based payments bring a greater degree of dependability to an online merchant’s revenue stream and are a natural next step in extending the Zong mobile payment platform,” said David Marcus, founder and CEO, Zong. “Photobucket’s and OMGPOP’s use of Zong’s Recurring Payment Service demonstrates the potential of mobile payment platforms to continue to gain popularity and use across a variety of consumer demographics and use cases.”

Sites like photo and video sharing site Photobucket and social gaming platform OMGPOP are currently using Zong's Recurring Payment Service.

Is this the future of mobile? Chances are likely that it most certainly is, considering last week's report from Chitika that advertising on mobile devices generates a much lower response than traditional display ads.

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The State of Mobile Payments

Pete Prestipino — Wed, 29 Oct 2008 19:50:00 GMT

Mobile money transfer and contactless NFC (Near Field Communications) will together account for 50% of the overall mobile payment market globally by 2013, (based on the gross transaction values), according to Juniper Research's new Mobile Payments Study.

The report found that the mobile payments market will in the future be driven by subscribers transferring money and using NFC features on their handsets to make purchases. This will drive the overall mobile payments market to grow by a factor of ten between now and 2013. The top 3 regions for this sector will be the Far East & China, Western Europe and North America, and account for over 70% of mobile money payments on a gross transaction basis by 2013.

"We see significant opportunities for new services making it easier for the 'underbanked' population and migrant workers to make remittances, using their mobile phones as mobile wallets: the services already in operation are seeing rapid growth." Wilcox added that mobile wallets will incorporate NFC which will enable people to use their mobile phones to pay for small value items such as refreshments and magazines," said report author Howard Wilcox.