Monday, 29 July 2013

mPOS and the changing face of card payments

Originally published on Billing Views.

Mobile point of sale (mPOS) card payments has the potential to create massive disruption both in the high street and in other places where cash has been the only method of payment. It makes card payments available to retailers and small traders who previously couldn't justify the expense of a Chip and PIN machine from one of the big acquirers. All they now need is a Chip and Signature or Chip and PIN device from someone like iZettle or Payleven plus their iPhone, iPad or Android device and they're up and running. Cash isn't going away any time soon and will continue to be the predominant method of payment for lower value transactions for years to come, however mPOS gives customers the option of card or cash. 

mPOS has the potential to disrupt the existing card acquirers' business, especially at the lower volume end of the market. As a one or two person business why pay for expensive hardware and fixed monthly charges, especially if you expect to continue to take lots of cash payments? A pay as you go card payment model with low hardware costs makes much more sense.

There is a risk that with an increasing plethora of mPOS providers in the market, potential users will be baffled by the best option, especially as pricing is fairly consistent. However with these devices available in the high street from retailers like EE (iZettle) and Apple (Payleven) takeup should rapidly accelerate as potential users come across them in familiar surroundings.

So what's mPOS like in the real world? A few weeks ago I helped out at a market and spent the morning taking card payments using iZettle. Not only did it make my life easier but customers loved it. It gave them choice and convenience using a flavour of a technology they're already familiar with.

Consumers expect to be able to pay with cards whoever they buy from and mPOS gives smaller retailers and traders the opportunity to compete with bigger organisations and not lose out because they can't take card payments. That will be the real disruption.

Thursday, 11 July 2013

I've seen the future of contactless payments, it's not NFC and it works

Originally published on Billing Views.

When people talk about contactless payments they usually mean contactless EMV (Europay, MasterCard, Visa) card payments or NFC (near field communication) payments using a mobile device. Contactless card payments have been in the news recently amid reports of double charging or the wrong card being charged. I have enough trouble getting the correct card to read so am not surprised that these problems have been comprehensively debunked by industry experts like Dave Birch.

However contactless payment using a mobile device is not just about NFC. The best contactless payment applications I've experienced have not used NFC but have been designed to improve the transaction experience within a specific retailer. Starbucks has combined loyalty with payment in an application that makes mobile payment simple. Combine it with Apple's iPhone Passbook app and you don't even have to unlock your phone to pay.

However for me, the killer contactless app is the Apple Store EasyPay app. I can take items off the shelf, scan them and walk out without ever speaking to a store representative. The power of those 575 million cards that Apple has stored against Apple/iTunes accounts becomes very apparent. Minimal payments friction and no queuing. Any downside? Perhaps it makes it too easy to spend! Installing the iOS 7 beta on my iPod Touch (having an Apple developer in my immediate family has its benefits!) and seeing the appearance of iCloud Keychain with its ability to store card details, points to the next stage of Apple creating a payments capability in its handsets. Combine EasyPay with iCloud Keychain and you have a digital wallet in your handset. All you need then is more places to use it! As the payment process is as simple as scanning a barcode, the impact on in-store point of sale hardware is zero and Apple can supply the transaction data to the retailer in the background. It would certainly explain Apple's apparent lack of interest in NFC. The next year will be interesting ...

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