Mobile, NFC, and Contactless Payment Options Expanding Exponentially

Competition in the mobile / contactless / near-field communication payment segment is heating up thanks to the proliferation of hand-held mobile point-of-service (POS) devices and of applications that allow smartphones to function in much the same manner. Some of the major contenders include:

  • Verifone’s PAYMEDIA Solutions,
  • Ingenico,
  • the ViVOpay 8100 terminal by ViVotech,
  • Google Wallet, and
  • the mobile payment platform, Isis (Verizon, AT&T, and T-Mobile).

PAYMEDIA by Verifone solves the issue of reluctance on the part of small and medium businesses to buy new payment systems by creating a subscription-based model. The offering includes payment-enabled media at checkout like digital couponing, location-based social media, loyalty rewards, and other value-added services.

Ingenico is focusing on a sharper competitive presence through its acquisition of the POS assets held by Hypercom. In 2010, 21 percent of the Ingenico terminals bought by merchants had NFC capability, which was a jump of 50 percent over the previous year. The company’s latest series, Telium, also handles value-added options for such things as rewards and coupons.

The ViVOpay 8100 terminal by ViVotech has NFC technology as well, with customers swiping, inserting, or tapping payment cards — or using their NFC enabled phones — to purchase goods or to redeem electronic service-based media. The device also adds a layer of safety via PIN entry for debit transactions.

Google Wallet is, of course, the least traditional of the mobile payment platforms, but is already available to customers in Subway, Walgreens, American Eagle Outfitters, Toys R Us, and Macy’s. The free Android app stores multiple credit cards or a Google prepaid card that has been tied to a credit card issued by Google.

When the app is opened on a phone with NFC capability, the device can be tapped against the reader to complete transactions. Currently Google Wallet can be used on Sprint’s Nexus S 4G, with Citi MasterCard credit cards, and at retailers who use MasterCard’s PayPass terminals, with transactions processed by First Data of Atlanta.

The Isis platform, created by AT&T, Verizon, and T-Mobile will be the major competition for Google Wallet, but it will not debut until spring 2012. The service will also make use of smartphones with NFC chips and will function on Android and other operating systems.

Additionally, the three big players in the mobile payment processing sector are Square, VeriFone, and Intuit. All are making pricing structure alterations and adding options to compete more effectively. Square no longer charges merchants a 15 cent transaction fee, while Intuit has extended its GoPayment “no monthly fee” offering with a credit card reader. Verifone has not changed its fees, but its PAYware solution now includes a bar code scanner with the card reader.

Research indicates that by the end of 2015, some 53 percent of merchants in the U.S. (about 6.7 million) will support both chip-based transactions and NFC. According to the study by Aite, these services will return $350 million a month in transaction-based revenues, up from $2 million in 2011. Essentially, these shifts in the technologies for mobile payment and chip-based processing will generate million of dollars of new business on an annual basis.

– Summary of the part about “Mobile Momentum” in “Technology Competition Shakes Up With Big Acquisitions, EMV Momentum, And NFC Adoption” by Julie Ritzer Ross in the Transaction Trends November issue By