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Tag: mobile-payment

  • Mobile Payments: Increasingly Popular!

    Total value of mobile payment transaction will exceed $171.5 billion worldwide in 2012, meaning an increase of 61.9% compared to 2011, according to the latest figures provided by the consulting company Gartner.

    Total value of payments made with mobile devices will amount to $105.9 billion, while the number of users will reach to 212,200,000 in 2012 from 160,500,000 users in 2011.

    Company specialists expect the overall volume of mobile transactions and the average annual growth to be around 42 percent between 2011 and 2016, estimating a market worth $ 617 billion, with 448 million users by 2016. Sandy Shen, Research Director at Gartner, says that this growth will bring new opportunities for service and solutions providers that will have to respond to local requests to customize their offers.

    Mobile payment market will experience different fragmented services and solutions for the next two years. Technology providers will have to adjust their solutions for the local markets using different access technologies, business models and partnerships, under different regulatory conditions.

    The SMS remains the dominant technology access in developing markets because of constraints on different types of mobile and the easiness in using SMS.

    Web / WAP access is the preferred technology for North America and Western Europe as mobile Internet is commonly available and enabled on users’ devices. Gartner expects that by 2016 account access by Web / WAP to be active for about 88% of transactions in North America and 80 percent in Western Europe.

    Near Field Communication (NFC) transactions will remain relatively low until 2015, although the growth level will begin to increase starting from 2016.

  • PayPal Here, Mobile Payment Solution

    PayPal has launched its own mobile payment solution, PayPal Here. The new service includes a free application and a secured card reader attachable to the mobile phone, transforming any iPhone – and soon, any Android smartphone – into a mobile payment solution. Along with PayPal Here, PayPal has launched the latest version of PayPal Mobile for iPhone, complementary application with PayPal Here, available for free in App Store.

    PayPal Here is not only for individual users but also to small business owners, service providers and other merchants who can issue invoices and accept credit or debit cards, checks or payments through PayPal. Regardless the mode of payment chosen by the consumer, PayPal Here facilitates the transfer, providing small business with opportunities to sell products and services.

    Accessing the option "Local" gives PayPal Here users the possibility to find out what stores near them accept payments through this service. Once he is ready to buy, the customer notifies the dealer through a simple touch. In turn, the seller uses PayPal Here to accept payments by simply mentioning the name and the photo of the buyer.

    PayPal Here has a competitive structure in terms of fees. The service does not include initial charges for using it or monthly fees, the only fee paid by merchants being equal to 2.7% of the payments received by credit card or PayPal.

    Merchants who use PayPal Here have at their disposal business debit cards for quick access to money. When using cards for shopping, they get back 1% of the price of certain products, which makes practically the commission paid to PayPal Here to fall to only 1.7%.

    For now, the solution is used by some traders in the United States, Canada, Australia and Hong Kong, following to be available nationwide in these country starting from April and, subsequently, to be extended to other countries. Also in April, PayPal Here will be available for Android smartphones.

  • AT&T, T-Mobile and Verizon Wireless to Build National Mobile Commerce Network

    AT&T Mobility, T-Mobile USA and Verizon Wireless have announced the formation of a joint venture chartered with building ISIS, a national mobile commerce network that aims to "fundamentally transform how people shop, pay and save."

    Isis’ initial focus will be on building a mobile payment network that utilizes mobile phones to make point-of-sale purchases. By utilizing smartphone and near-field communication (NFC) technology to modernize the payments process, Isis intends to deliver new levels of competition and value to consumers and merchants.

    Thew company expects to introduce its service in key geographic markets during the next 18 months.

    Michael Abbott has been named as Chief Executive Officer of Isis. Formerly with GE Capital, Abbott is a veteran financial services executive with extensive experience in the payment and technology industries. "We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes," Abbott said.

    Founding members, AT&T Mobility, T-Mobile USA and Verizon Wireless, collectively provide wireless services to more than 200 million consumers who will have access to the Isis service. Isis is working with Discover Financial Services’ payment network, currently accepted at more than seven million merchant locations nationwide, to develop an extensive mobile payment infrastructure for the joint venture.

    Barclaycard US, part of Barclays PLC, is expected to be the first issuer on the network, offering multiple mobile payment products to meet the needs of every customer.

    How It Works

    The new venture will enable contactless mobile payment and commerce services using near-field communication technology. NFC uses short-range, high frequency wireless technology to enable the encrypted exchange of information between devices at a short distance. The new system is being designed and built to include strong security and privacy safeguards.

  • IDC: Mobile Banking Usage Nearly Doubled Since Last Year

    IDC has released a new report, 2009 Consumer Mobile Banking Preferences Survey Results – Waiting for Takeoff, that reveals that mobile banking has seen an increase in usage and in institutions offering the service in the last year. In fact, reported mobile banking usage has almost doubled since last year’s survey.

    However, according to the survey, while mobile banking may have finally turned the corner with customer acceptance, it is not a mainstream channel and in order to be successful, financial institutions need to be strategic about their mobile offerings.

    In addition, realistic expectations, an understanding that there are few to no revenue opportunities around mobile currently, and the backing of senior management, are all key to mobile success.

    According to the report, the challenge with mobile banking continues to be that it introduces a new cost structure without providing opportunities for revenue. Consumers have become accustomed to having more for free, and the convenience of mobile banking so far does not appear to be something that people are willing to pay for.

    However, enhancements to mobile platforms – including the addition of adding deposit capture and payment solutions – will provide more opportunities for financial institutions to potentially gain some revenue opportunities.

    IDC recommends that financial institutions begin expanding what they offer, marketing these offerings as easier to use, and providing more opportunities around payments and fund movement. Financial institutions that can capitalize on this will be better positioned to both obtain and retain customers.

    Key findings include:
    • Usage was up across all channels, requiring bankers to manage more transactions across an ever-expanding portfolio of delivery options.
    • The financial services industry should leverage its branch network to compete against potential nontraditional entrants that lack the brick-and-mortar infrastructure.
    • SMS is the most popular form of mobile banking.
    • Customized alerts and payments outside of network are gaining in popularity, while check image view and getting rate information on the mobile device appear to be fading.
    • Demographics for mobile banking customers were skewed toward a younger male audience, but all demographics are showing usage.

    "Consumers are transaction and information happy, and the branch continues to be as popular as ever," said Marc DeCastro, Research Manager, Consumer Banking and Credit, IDC Financial Insights.

    "The financial services industry recognizes the importance and advantage it has with its brick-and-mortar branch networks, evidenced by continued branch investment. Our survey, however, shows that consumers are getting more and more comfortable opening accounts outside of the branch. While many financial institutions have jumped into the mobile banking space and are offering solutions, some are still pondering their entrance. Those that have already installed a solution may also be looking at modifications or enhancements to their first-generation rollouts."

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  • Number of Worldwide Mobile Payment Users to Reach 108.6 Million in 2010

    The number of mobile payment users worldwide will exceed 108.6 million in 2010, a 54.5 percent increase from 2009, when there were 70.2 million users, according to Gartner. Mobile payment users will represent 2.1 percent of all mobile users in 2010.

    Gartner report "Market Insight: The Outlook on Mobile Payment" finds that Asia/Pacific is the leading region with mobile payment users. In Asia/Pacific, mobile payment users will surpass 62.8 million in 2010, and represent 2.6 percent of all mobile users.

    In Europe, the Middle East and Africa (EMEA), mobile payment users will total 27.1 million and represent 2.1 percent of all mobile users in the region. In North America, mobile payment users will number 3.5 million and represent 1.1 percent of all mobile users in the region.

    "We continue to see strong growth in developing markets in Asia, Eastern Europe, the Middle East and Africa for mobile payment, while adoption in North America and Western Europe lags behind due to the plentiful choices of payment instruments that consumers have," said Sandy Shen, research director at Gartner. "Developing markets have found the right formula for mobile money services — functions that users want and an ecosystem that can sustain the service."

    Shen said that the strong demand for mobile payment in developing markets is being driven by the unbanked and underbanked populations that do not have ready access to the banking infrastructure or PC, positioning mobile as the natural choice of access platform. “At the same time, regulators in early-adopter markets are tightening up policies to provide better user protection and fight against unlawful financial activities relating to money transfer,” she said.

    The report also shows that Short Message Service (SMS) remains the dominant mobile payment technology. Its ubiquity and ease of use makes it the technology of choice, not only for consumers in developing markets, but also for those in developed markets. Wireless Application Protocol/Web can support either downloadable clients or mobile browsers. It is more frequently used by consumers in developed markets due to the higher penetration of data-capable phones and active data plans.

    According to Gartner, many financial institutions have failed to see the business case of Near Field Communication (NFC) payment, in particular, which offers similar functionality to contactless cards but with the added complexity of dealing with mobile carriers and other ecosystem partners.

    Shen urged service providers in developing markets to investigate service interoperability to speed market uptake and foster healthy competition. She said that solution providers should ensure platform flexibility so that platforms can work with both the bank’s and mobile carrier’s systems, and so that it can be readily customized for local deployments.

    Related articles
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  • IDC: Mobile Payments Will Take Longer To Bear Fruit than Most Observers Hope

    IDC Financial Insights recently released a new report, which analyzes the mobile payment and mobile banking space in the Europe, the Middle East, and Africa (EMEA) region.

    The research group highlights that the mobile commerce payments market still has a long way to go before any serious impact will be felt by consumers or by the retail industry.

    “Steady moves by card issuers to increase the adoption of contactless cards and the increasing acceptance of mobile banking as a channel are prerequisites for the emergence of any meaningful, full-sized mobile payments market in Western Europe,” say analysts.

    IDC estimates that the share of contactless/mobile/remote payment transaction in 2015 will be no more than $125 billion with less than 13% of European mobile handset users registered to use a payment service.

    According to the report, the mobile payments industry must focus less on the use of advanced technology to partially replace existing payment methods, and more on the more practical (and sometimes mundane) application of the technology to specific processes.

    A close analysis of the industry shows that over the next three to five years the lack of a positive business case for all players will hamper many mobile payments projects. IDC also predicts that mobile banking (account info access and alerts) will blaze a trail over the next two to three years, laying the foundations for mobile payments.

    According to IDC analysts, key foundations for the success of retail mobile payments in Western Europe lie in the advancement of contactless debit/credit cards POS infrastructure.

    "Mobile payments are still an emerging technology capability that will take significantly longer to bear fruit than most industry observers hope," said Trevor LaFleche, senior research analyst, with IDC Financial Insights’ European banking practice for EMEA.

    "Shifting technological foundations of what constitutes a mobile device will confound industry purists, as has often happened when a technology does not take off as predicted. The varied nature of existing infrastructure and consumer need will continue to split the EMEA region into three distinct segments, which will need to be uniquely served to improve the penetration of the correct payment service to the correct market," he added.

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  • Visa Brings Mobile Payments to iPhone

    Visa and DeviceFidelity are working to allow iPhone users to make payments by simply waving their iPhone in front of a contactless payment terminal. The new technology, developed by DeviceFidelity and certified by Apple, combines a protective iPhone case with a secure memory card that hosts Visa’s contactless payment application, called Visa payWave. The technology will work for both iPhone 3GS and iPhone 3G devices.

    iPhone users will be able to make Visa mobile payments in retail stores, at fast food restaurants, in taxis, during sporting events, and also make purchases at vending machines that have contactless payment terminals.

    Visa claims that “thousands of merchants throughout the U.S.” have already upgraded their payment terminals to allow consumers to make Visa mobile payments.

    The technology will also work with a majority of smart phones that have a slot for a memory card. “By simply inserting the card into the memory slot on their phone, mobile users can transform their existing mobile phones into a Visa payment device,” according to the company.

    Visa has already rolled out a similar technology in Malaysia and Japan, where consumers can make mobile payments in stores and restaurants.

    The mobile payment application can be password protected and utilizes advanced security technology to uniquely identify each contactless transaction. In addition, all Visa mobile payments are backed by Visa’s global processing network and analyzed for potential fraud in real-time. If a mobile device is lost or stolen, account holders should contact their issuer, as they would if their card was lost or stolen. The issuer can immediately deactivate the account.

    Market trials of the payment-enabled iPhone are scheduled to start this summer.

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  • VeriFone Announces iPhone Secure Payments Solution

    VeriFone announced PAYware Mobile, a payment solution for the iPhone that brings card processing capabilities to small businesses.

    According to the company, PAYware puts “mainstream payment processing capabilities” in the hands of small business merchants who need a mobile card acceptance solution for enterprises such as home repair, small cafes, door-to-door sales, or virtually any other type of business.

    The solution includes a PA-DSS approved payment app and a card reader that slips over the iPhone to accommodate card swipes and allow merchants to avoid “card-not-present” fees.

    The card reader utilizes a secure magnetic stripe read-head and firmware certified to the Federal Information Processing Standard FIPS 140-2. Card details are immediately encrypted during the card swipe process, meaning no sensitive data ever reaches the payment app, eliminating the possibility of compromise either on the iPhone or when information is transmitted over WiFi or cellular wireless.

    Transactions initiated by PAYware Mobile will be managed through VeriFone’s PAYware Mobile secure gateway and routed to one of many credit card processors for authorization and settlement.

    VeriFone assures that the combined hardware and software provides “the strongest card payment security available for the iPhone”, including the company’s VeriShield Protect encryption solution as a standard feature.

    The solution will be available through existing bank acquirer and ISO channels, as well as direct from VeriFone. The company says they also expect to eventually make PAYware Mobile available wherever mobile phone accessories are sold. Customers who sign up directly with VeriFone without existing merchant accounts will be directed to a “variety of payment processor options”.

    The hardware and software solution will begin shipping January 15 and is available free to those who sign up for a PAYware Mobile secure gateway service agreement.