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Mobile Payments = New Fees |
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If Rogers, MasterCard and Visa have their way, merchants can expect an entirely new set of 'swipe fees'.
Rogers, via their relationship with CIBC are attempting to insert themselves into the payment ecosystems, and will charge a monthly fee to CIBC that will be passed to merchants and/or consumers at some point. Meanwhile, MasterCard and Visa have announced that they will add a special eWallet fee for companies like PayPal. This fee will also apply to Google. The back-story behind this is that both Google and PayPal have formed relationship with Discover, the purpose being to place themselves in the middle of credit card transactions. Details on this process can be found in Mark Sibthorpe's book on mobile payments. For this to work they will each issue plastic cards but execute a card-not-present transaction at a higher fee.
This is an issue that has come to the attention of the Canadian Federation of Independent Business (CFIB), which, according to the Globe and Mail today, is pushing for amendments to the federal code of conduct governing payments to give retailers a choice to refuse mobile-based transactions.
The group wants a requirement for “express consent” – meaning that merchants would not be obliged to accept mobile payments just because they have signed up for so-called contactless credit-card transactions. Canadians are already in the habit of using contactless terminals to make low-amount credit card purchases with MasterCard PayPass and Visa payWave.
Knowing how the card networks operate, the CFIB approach is less than ideal. The best defense against this is for merchants to set up their own alternative payment ecosystem. US merchants have come to realize this and have banded together to start the merchant consumer exchange (www.mcx.com). Canadian merchants would be wise to do the same.
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Proximity Sensor: fools gold |
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The proximity sensor payment authentication proposed by Samsung may be fools gold. Unless all smartphone manufacturers plan to introduce such a feature, this solution will have that same ignition issues that currently plague NFC authentication: not enough handsets, therefore, not enough scale to drive ignition.
Barcodes are ubiquitous to all smartphones, with the launch of iOS6 and Passbook, it means that 100 million devices come equipped with barcodes today. Verses one handset that will be enabled with proximity sensors.
Another fact that merchants should also consider is that integration of Mobeam's solution into their POS will still require some significant POS changes. It is true that scanners will not have to be upgraded to meet the requirements necessary to read barcodes from a screen, but there will still be backend integration issues. These are not small requirements. Consider the fact that many merchants run many different POS systems. Each system will require its own integration.
Based on these issues, the jury is still out on whether or not this might be the winning solution. To learn more about alternative solutions read, 'Mobile Payments 2013', by Mark Sibthorpe. |
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Pret a Manger Sees Surge in NFC |
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According to an article that appeared in Finextra, UK sandwich chain Pret A Manger claim, "Contactless payments in terms of our overall transactions have gone from single digits of probably between three to five per cent, to about 20 per cent in the last 12 months," Chalklin told UK trade mag Computing.
This is a marked change in user preferences. Between this and London's use of NFC in public transit, perhaps a case is building for NFC? Stay tuned.
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The Utah Transit Authority (UTA) released mobile payment transaction figures since adding Isis. According to statements published in the Telecom Paper February 13, Isis increased NFC payments from 400 per day to 1,000. Considering that the authority has 130,000 daily transactions this means 0.46% of riders are using mobile. This seems low, and is likely due to the limited number of NFC enabled handsets in the market.
BACKGROUND
The Utah Transit Authority (UTA) provides public transportation services in a 1,600- square mile service area known as the Wasatch Front. At the foot of the Wasatch mountain range, the Wasatch Front has an estimated 2 million residents - 80 percent of Utah’s entire population. During the 2002 Olympic Games, UTA vehicles carried more than 4 million passengers and was declared a great success. UTA is a nationally-recognized leader in the use of technology to increase operational efficiency and improve passenger services.
Founded: 1970
Vehicles: 550
Light Rail Vehicles: 69 Commuter Rail
Locomotives: 11 Commuter Rail Passenger
Cars: 35
Serving: 130,000 passengers daily
Service area: 1,600 sq. Miles
By comparison, up to 6% of Starbucks barcode based transactions are via mobile phone.
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Mobile Payments 2013 Book Overview |
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About Book:
Mobile Payments 2013: Credit and Loyalty Transformation, by Mark Sibthorpe
Foreword
Merchants that want to understand loyalty, credit and mobile payments should read this book. It offers readers a step-by-step methodology for evaluating and transforming credit and loyalty programs. The strategies are based on proven examples and facts. The Nectar, Target, Canadian Tire and Walmart case studies are examples of the practical approach I have taken, written with the intent that merchants can use them as blueprints for their own initiatives.
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Read more...
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