The Mobile Wallet and the Tap to Pay System

We all have our mobile phones today, and, like our wallets used to do, the phone holds virtually everything we need: pictures, contacts, email, even bank account information. And now smartphones are trying to take one more thing out of that bulky wallet: payment cards. The mobile phone is on the cusp of becoming a mobile wallet, among all its other functions. The only thing you need to be concerned about is that you’ll never be able to use the I-forgot-my-wallet excuse again!

"The Mobile Wallet"

What is a Mobile Wallet?

A mobile wallet is also referred to as a mobile payment. Mobile payments allow you to use your phone to transmit the payment data from you credit card or debit card to the store with just a tap on the processing terminal where you would normally swipe your card.

 

The technology emerged in 2005, piloted by Nokia, and was different from payment via SMS text or through direct billing. This type of mobile wallet or mobile payment allows you to use Near Field Communication (NFC) technology to allow a special device in the smartphone to send waves to a receiver in the merchant’s payment terminal. This receiver gathers the information and transmits it to the computer to read and process it.

 

The technology for mobile payments is already in place and being used by some European countries, although their uses include paying for public parking and public transportation. You may also already use this technology if you have an EZPass for your vehicle on toll roads.

 

The proposed mobile wallets would feed off your bank account or a credit card account, and not off of a cash fund you place on the device. The mobile wallet gained a lot of ground after the initial testing done by Nokia, and now many other phone companies are rolling out smartphones with the capabilities of mobile payments.

 

Research in Motion, Google Android and LG are some of the first to announce that their upcoming phones would be capable of mobile payments using NFC of merchant to consumer transactions and by using debit or credit card information. Additionally, the manufacturers of the payment processing terminals have begun to catch on to the trend, and are now rolling out terminals that have both NFC capabilities, as well as ordinary swipe card technology. 2012 is expected to be an exciting year for mobile wallets and NFC technology system.

 

How does this help me?

 

2012 is the year when merchants should begin to get the system in place for the mobile wallet system. Ensure that your payment processor is capable of handling any changes in payment systems, and that your own terminals are up to date so that if a customer comes in and wants to just tap to pay, you are able to serve that person.

 

Everyone will benefit from this technology, especially after the initial challenges of changing systems. The mobile wallet is infinitely more secure than the credit card for both the consumer and the merchant. The card information stored on the phone can be removed within seconds of the phone being reported lost or stolen. This means less fraudulent purchases for the merchant and less hassle for the consumer. Additionally, the technology ensures security by sometimes requiring a PIN or a password to access the system and also uses waves that are encrypted and generally not readable except from a very short distance.

 

Another example of how this will help both merchants and consumers is that the smartphone has the capability to not only use the credit card information but also any coupons and loyalty card information to efficiently process the transaction giving the consumer the maximum benefit and the merchant the easiest transaction. Then all information can be stored in the computer and merchants can use loyalty card usage and coupon usage information to help them improve sales and customer satisfaction.

 

Finally the advent of NFC technology and its use as a mobile wallet will change the credit card industry and the payment systems industry, with most of the changes being something your providers will need to adjust to quickly. Currently the mobile wallet is “operator-centric,” meaning that the phone company and the consumer operating the phone are in control of the use. The credit card system will not face so many changes; it will merely have to be more prepared for use of wireless and internet transactions. Essentially the mobile wallet removes the need for swipe cards, but not the processing fees associated with it. Credit card companies will need to adjust to this change.

 

How can we help?

 

While you and your customers ponder the use of the mobile wallet, we offer a mobile payment system which may help you adjust to the idea of phones being a method to convey currency. This handy system allows you to turn your smartphone into a payment processing terminal safely and securely. Contact us today to discuss how you can prepare for the new technology and how it may affect your business.

 

When all other players in the system are changing, you can bet that your payment processor will need to change too. My POS Depot is watching this emerging technology and is excited about the changes that are occurring. As a processor we understand that the merchant, and the consumer, and the credit card company are all shifting positions, and the payment system processors will need to be prepared to shift too. As the specific use of this technology emerges and the players begin to take their places, My POS Depot will be adding mobile products and solutions for merchants to help them move forward without interrupting business.

Are digital receipts and mobile card processing the next evolution of commerce?

Grant @ MyPOSDepot

How often have you waited in line at the local home improvement store for the one clerk to checkout 20 patrons; often with tired, screaming children running through the aisles?  Perhaps you’ve enjoyed a long meal at a Zagat-rated restaurant, and you’ve been waiting for over a ½ hour for your server to process your check.  You know the story; its wait, wait, and wait some more!  Waiting is what we seem to do best these days.  If you’re like me, when you purchase a product or service, you want to get in and out of the retail environment as soon as possible, with no complications at the register.

Recently, an increasing number of retailers and restaurants are offering mobile credit card processing as a solution to alleviate these long checkout queues, as well as enjoy other benefits to the merchant and consumers.  In a nutshell, the merchant utilizes a placement reader or card swiper that attaches directly to a smartphone, such as the iPhone, Android or Blackberry.  A smartphone app downloaded by the merchant provides the technology for credit card processing, digital signatures and electronic receipt transmission to the customer.  The merchant swipes the customer’s card through the placement reader, the card transaction processes in the background, the customer signs the smartphone screen and a receipt is emailed to the customer’s email inbox.

Beyond the obvious convenience factor of reducing retail checkout queues and the efficiency of emailing a receipt directly to a customer email inbox, merchants are starting to tout the other benefits that accompany mobile credit card processing.  Merchants that are migrating towards paperless, digital receipts are finding that expensive to maintain receipt printers are no longer necessary.  This in turn reduces the merchant’s receipt paper and printer ink costs.  With a reduction of paper usage, merchants can now champion the environmentally friendly aspect of paperless receipts in their green marketing campaigns.  Customers also appreciate the green alternative to a crumbled receipt that often gets misplaced.

Cardholder security is a major concern for both merchants and customers alike.  Most mobile processing systems are equipped with rigorous encryption standards that meet or exceed conventional processing terminals.  For example, Alpha Card Service’s QwickPAY mobile processing device surpasses current PCI DSS standards by combining multi-layered MagneSafe™ security, in addition to encrypting card data from the point-of-swipe.  The QwickPAY service enables merchants to use their existing mobile devices to make secure, card present transactions anytime and anywhere, without the concerns of storing sensitive card data.

Smartphone with QwickPAY

QwickPAY digital receipt

For merchants, there are clear opportunities for direct marketing with obtaining the customer’s email address.  Special offers, coupons, newsletters and social media outreach are all possible with this direct relationship with the customer.  However, some privacy advocates have expressed concern that obtaining customer email accounts constitute an intrusion into personal information.  As electronic receipts have been optional for consumers thus far, most of these concerns are unfounded.

As a person who is frequently impatient with long lines and slow checkout staff, I fully embrace this transformation to digital receipts and mobile credit card processing.

Grant Rowlands
National Account Executive
P: (866) 480-2433
C: (215) 421-3333
F: (215) 494-0368

http://www.myposdepot.com

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