Mobile Payments are the future of payments processing

Published 02/07/2013

Mobile payments are the future of payments processing:

We are a payments company.  Our company’s core competency is assisting merchants in accepting payments; this includes payments in retail, mail order telephone order and ecommerce environments.

The Problem:

In the past we have focused our efforts and marketing on the idea that the services we provide are better and more cost effective than our competitors. This concept is true today and will always be true.  The challenge for folks in the payments industry is that every agent, executive and organization is after the credit and debit bankcard processing aspect of payments. Competition is extremely high and we’re all going to great lengths to get these same bankcard processing accounts. It’s been a race to zero.

The price service and relationship pitch we’ve all been using for the past 20-30 years is becoming less and less effective over time. The law of averages says agents going b2b pitching price, service and relationship will need to see 30-40 doors in order to sign up one new account. Ten years ago this was more like 10-15 doors. The reason is that merchants are becoming more and more savvy when it comes to understanding the way this industry works and they realize agents are willing to go lower every time in order to get a new account, even if that means an agent ismaking significantly less than they were a few years ago.

The Solution: Providing value. 

I would pay much more to drive a Range Rover than a Honda CRV. Honda CRVs are perfectly good vehicles with a great track record. The reason I am willing to pay a premium to drive my Range Rover is because it’s got newer technology which I perceive to be of greater value to me. It electronically cools my beverages as I’m driving. Although it’s completely unnecessary, it’s pretty cool and to me it’s worth paying for. The value we’re providing to our customer is much more practical than my electronically cooled beverage holder.

We’re excited to introduce you to Genius.  Genius is a customer facing device which integrates and aggregates all forms of payment into a single touch point.  The purpose of the device is to give merchants the flexibility to accept any form of payment, including mobile wallets, as they become available.  Through Genius our customers can accept bankcard transactions, NFC enabled mobile payments, QR code mobile payments, EMV transactions and they can even capture signatures electronically.

Different types of transactions:

Bankcard transactions will be necessary for a very long time so we’re certainly not looking past them. My mom is never going to pay for anything with her phone.  She still pays all of her bills with a check and refuses to use online banking. One of the values Genius brings to the table is the BinSmart technology. BinSmart identifies whether it  is more cost effective to run a debit card with a pin number (online debit) or without a pin number (offline debit).  The important part of debit which all too often is forgotten is that it is more cost effective for a merchant to run a small ticket transaction without a pin number, while it is more cost effective to run a larger ticket transaction with a pin number.  The breakeven point is somewhere between $30-$40 and BinSmart will do all of the thinking for the clerk behind the counter.

NFC stands for Near Field Communication. In simple words this is the technology which allows you to tap your phone against a reader in order to pay.  No signature required and nothing to sign. Isis is an electronic wallet using NFC technology and was developed by AT&T, T-Mobile and Verizon. The fact that these three fierce competitors are working together on a mobile wallet has blown me away but at the same time gives me some insight as to how big mobile payments are actually going to be.  Google Wallet uses NFC technology and is already being accepted at major retailers throughout the US such as CVS pharmacy, Foot Locker, Macy’s and a few more. You can search “where can I use Google Wallet?” to get a list of some other major retailers currently accepting this NFC enabled technology.

A QR code is that big square bar code you’ve seen on advertisements at the bus stop or in the mall. The consumer’s mobile payment app displays a QR code on the screen of their smartphone and would be held up to a scanner on the merchant’s counter top. Starbucks’ mobile payment app is probably the most notable using QR code technology. Level Up is a QR code based mobile payment/loyalty application growing quickly in major cities throughout the US.  Level Up is gaining traction faster than any other player in the business today.

EMV stands for Europay MasterCard and Visa.  An EMV card has a microchip in it.  An EMV card would be slid into the Genius device, the card holder would enter their 4-6 digit pin number and then remove their card.  These types of transactions are far more secure because the card holder knows the pin and has possession of the card. This protects merchants from fraud and chargebacks.

Signature capture is my favorite feature. Consumers sign on the screen of the customer engagement device and the signed sales slip will be stored on the cloud and can be accessed at any time through the merchant’s web dashboard.  Visa allows cardholders 180 days and MasterCard allows 90 days to dispute a transaction. Rather than searching through shoeboxes full of receipts when a merchant needs to find a sales slip 60-90 after the transaction, signature capture allows them to easily gain access through their web dashboard in seconds. There is a small fee of $5.00 per month but you will easily be able to justify it by offsetting the cost of the paper used to print merchant copies of receipts.

How to accept Mobile Wallet Payments, and which ones are right for your business:

The goal of Genius is to solve the mystery of mobile commerce.  As an industry first solution merchants don’t have much to compare it against. Currently there is no clear winner in the mobile wallet game. It may be a young, venture backed company such as Level Up or a giant like Google. Likely we’ll see a few winners just like we have four major card brands in the bankcard game. Our turnkey solution allows us to drop the Genius device on a merchant’s countertop and allow them to accept as many or as few as they choose.

Each mobile wallet will provide a different benefit.  Stay tuned for our next update on what the benefits of payment type brings to the table.

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