Post Office to introduce contactless payment

Roll out begins on 6 June across 11,500 branches, making Post Office the biggest user of contactless technology in Europe

 

Contactless technology allows customers to pay for goods by waving their card over a specially designed sales terminal without the need to input a pin Photograph: SWNS.com

People buying goods and services through any Post Office branch will soon be able to use contactless credit and debit cards and payment-enabled mobile phones.

Post Office will start to roll out contactless payment terminals across its 11,500 branches network from 6 June in a move that will make it the biggest user of contactless acceptance technology in Europe. The roll out will be complete by the end of October.

"Contactless will bring huge benefits to our customers by increasing choice and reducing transaction times," said Lesley Sewell, chief information officer at Post Office Ltd.

Contactless technology allows customers to pay for goods by waving their card over a specially designed sales terminal without the need to input a pin.

Once installed, holders of MasterCard PayPass or Visa payWave cards will be able to use the readers, along with the limited number of people with Near Field Communication (NFC) equipped mobile phones. Payments using the technology will be limited to up to £20.

HSBC recently became the latest bank to begin arming its customers with contactless cards. In May, it started a gradual roll out of such cards to customers as their current cards expire.

Barclays/Barclaycard has been the undisputed leader in contactless card provision, with almost all its credit and debit cards now contactless. Royal Bank of Scotland, which includes NatWest, has some contactless debit and credit cards in issue, while Lloyds has issued 1.5m contactless cards (including those held by Halifax customers), which will rise to 2m by the summer.

Post Office's announcement comes on the same day that internet payments giant Paypal announced it had teamed up with the clothing chain that owns Warehouse, Oasis, Coast and Karen Millen to allow its customers to pay instore using their mobile phones

From Thursday, all the four women's clothing stores owned by the Aurora Fashions Group will be equipped with scanners that can read a unique barcode generated by the Paypal inStore mobile phone app.

The app will be linked to the mobile phone owner's PayPal account and accessed through a unique Pin. Once the barcode is scanned, payment is taken from the PayPal account. The system works whether or not there is a phone signal in the stores.

"Today marks the start of a quiet revolution in the way we shop on the high street. We've created a simple, secure way to use a mobile phone to pay in your favourite stores," said Cameron McLean, managing director of PayPal UK.

Paypal has been trialing its technology in a similar tie-up with Pizza Express over the last year but it said the Aurora deal was the beginning of a bigger push on to the high street that will see it team up with more stores throughout 2012. The PayPal inStore app is available for Android and Apple iOS (iPhone and iPad) devices.

Global analysts Gartner predict worldwide mobile payment transactions will grow dramatically from $105.9bn (£68bn) in 2011 to $171.5bn this year

Four Mobile Payment Systems Tested and Compared

Accepting credit cards used to be expensive and complicated: You needed to set up a merchant account with a bank, you had to buy or lease a card reader, and you had to pay a setup fee, subscription fees, and fees on every sale you made. Today, a swarm of credit card processing apps for smartphones and tablets has rendered the process easier, cheaper, and highly mobile.

PayAnywhere has developed a strong app for its mobile card reader.Most of these mobile payment processing services offer pay-as-you-go plans, in which you pay only a fixed percentage fee per transaction. Although these fees are typically higher than what you’d pay under a traditional arrangement, these newer services can provide any small business a simple, economical way to accept payments via credit card. And instead of making you invest in an expensive card reader, these services offer free readers that can fit in your pocket or bag. Just plug one into the audio jack on your smartphone or tablet and launch the accompanying app, and you’re ready to accept credit card payments for your goods or services.

Most of these plans add value with features such an inventory system, where you can save prices and descriptions of the products you’re offering for sale. Several provide a full point-of-sale system, which enables you to attach cash drawers and receipt printers.
We examined four mobile payment processing services, along with their respective card readers and software. Each supplies an app for iOS devices (iPad, iPhone, and iPod Touch), and three of the four offer an app for Android phones and tablets, but only one service supports BlackBerry devices.

Choosing the Right Service

Accepting credit card payments can be a boon to your business, but the associated fees can be a drag on profitability. PayAnywhere’s pay-as-you-go fee of 2.69 percent per swipe is the least expensive of the four services we looked at, while Intuit's GoPayment and VeriFone's SAIL tie for second with fees of 2.7 percent per transaction. Square’s 2.75 percent fee is the highest of the four.
If you’re processing more than $1300 in payments each month, you might be better served by one of the subscription plans that combine a monthly fee with a lower per-swipe rate: GoPayment costs $13 per month with a swipe fee of just 1.7 percent, and SAIL costs $10 per month with a swipe fee of 1.95 percent.

Low transaction fees aren’t important if the software and service aren’t a good fit for your business. If you need to accept and track cash as well as credit card payments, for instance, GoPayment won’t work for you. If you need to print paper receipts from iOS devices, you should consider PayAnywhere or Square. GoPayment is the best option for printing receipts from Android devices, and if you want the ability to charge cards via a Web interface in addition to using a mobile device. If you need a synchronized database for your inventory, or if you like the idea of scanning bar codes, SAIL is a good choice.

For more information, see our in-depth reviews of the four systems:

* Intuit GoPayment
* PayAnywhere
* Square Card Reader
* VeriFone SAIL

Living on mobile money

 

Rory Cellan-Jones tries living without money

A couple of weeks ago I wrote about my frustrating efforts to use various new mobile money applications on my phone. I promised then to have another go, to give up cash and try to pay by phone alone. So, how did it go? Not very well, I'm afraid.

I started by loading up my phone with a variety of apps which - supposedly - would help me get by without cash or even cards. My main weapons were to be O2 Wallet and Barclays Pingit, two new services which allow you to send and receive money from your phone. But I also installed the Paypal app, and a range of others that allow you to buy a coffee or pay for a taxi from your phone.

Within minutes of starting, I ran into trouble. It was my turn to buy the office tea and coffee round, and the coffee outlet only took cash. No problem - I would get my colleague Anthony to pay and refund him via one of my mobile money pay-by-text services.

With Barclays Pingit playing up (I never got it to work, even after deleting the app and going through the lengthy verification system again) I turned to my O2 wallet. Just two or three passwords later, I had texted a £2.80 money message to Anthony.

Coffee and taxis worked. Other items... not so much

Then the fun began.

He spent days - quite literally - trying to make sure this and a couple of other payments from me made their way from his phone into his bank account. Much of that time was spent in increasingly intemperate phone conversations with O2. At one point the company told him their "triage unit" was on the case. Anthony's verdict? "No need for triage - it's terminal!"

I quickly realised that although I wanted to rely solely on my phone, this approach wasn't going to work. I would need to use credit and debit cards as well, plus my Oyster touch-and-go card for travel around London.

By paying for meals via my debit card - which meant I had to spend more than £5 - I did manage to get by without cash for a couple of days.

Then I took a trip to Oxford and had my first failure.

Getting on a bus to the city centre without a travelcard, I found myself obliged to dip into my pocket for some coins to pay the fare. And my bus trip proved a timely example of how useful mobile money could be if it were more widely adopted. On a busy route, every time we stopped dozens of school children and students queued to pay by cash, making our progress very slow.

While neither of my mobile money services proved at all useful over the week, there were two things - taxis and coffee - that proved easy to pay for by phone. The taxi app market is now fiercely competitive and I found Hailo, a service that lets you order a London cab, pretty efficient at delivering a driver to me within five minutes.

Paid for in cash

I also tried Ubicabs to order minicabs, and this again worked fine - although my driver ended up asking me to navigate to my destination. These services make it very easy to move around without cash or credit cards - if only in the London area - but they have one major downside. You end up racking up big bills without even thinking about it.

The same applies with the Starbucks app, which allows you to load money onto a virtual payment card on your phone, then swipe your phone against a reader to pay for coffee or a sandwich. Because this was the only easy way I found to buy food from my phone, I ended up spending far too much on cappuccinos.

When I ended my experiment, I breathed a sigh of relief - as did my colleague Anthony, who is still trying to extract from his phone the money I owe him. Trying to live off mobile money, which is supposed to make life easier, has been a stressful experience. The inevitable concerns about security are making most of these new services so complicated to use that you have to be slightly deranged even to bother.

That is not to say the whole idea is doomed to failure. We will see further innovation over the coming weeks as payments firms unveil plans to allow visitors to the London Olympics to pay with their phones.

But here's my advice to the companies pushing these services - your "triage units" are in for a busy time.

Elavon launches chip and pin mobile POS solution, MobileMerchant

 

Sensitive data is captured and encrypted using a Bluetooth connected PIN pad

Elavon, a payment solution provider wholly owned by US Bancorp, is rolling out MobileMerchant, a new mobile POS solution that supports chip and pin as well as magnetic stripe cards and card-not-present transactions (view press release). The launch follows a successful pilot stage which began in January of this year.

The solution enables mobile merchants to take card payments on the go by downloading an app and inserting a plugin chip and pin reader into their smartphone. All sensitive data is captured and encrypted using a Bluetooth connected PIN pad so no data is ever stored on the device. Following the transaction a receipt is sent to the customer by email or text message. Debit and credit card transaction data can be accessed and analysed via an online data management system through which merchants can also run transactions using a secure Virtual Terminal application contained on the portal. The solution is currently available for devices running on Blackberry and Android.

Elavon is launching the product in partnership with specialist payment gateway and EMV chip technology provider, CreditCall. MobileMerchant is supported by CreditCall’s CardEase Mobile technology.

Global mobile payment revenues to surpass USD171.5 billion this year

 

Mobile spending expected to increase 61.9% year on year

Global mobile payment revenues will top USD171.5 billion this year, according to a new forecast from Gartner, as consumers increasingly use smartphones and NFC-enabled devices to pay for goods and services. The research house estimates spending will increase 61.9% year on year from USD105.9 billion in 2011, driven by purchases via mobile storefronts or using mobile payment technology in-store. Gartner expects the number of consumers using the technology worldwide to increase from 160.5 million last year to 212.2 million by the end of 2012, boosted by the penetration of mobile devices and the glut of payments services available on the market.

Merchants will lead the consumer migration towards mobile payments in Europe and the US over the next few years, according to Gartner. This will combine both e-commerce purchases and mobile payments in store, with big name early-adopters such as Starbucks leading others. The coffee shop chain says that it processed USD26 million in mobile payments via its Mobile Pay app for devices running on iOS and Google’s Android operating system last year alone. PayPal is also making major inroads into the space as it attempts to replicate its success in online payments to mobile, recently partnering with 15 major retailers including Abercrombie & Fitch and Toys ‘R’ Us to roll out its mobile payment terminals in-store.

Gartner predicts that as the mobile payment market expands, it will fragment into a raft of different services and solutions as payment firms tailor their products to local demands. SMS payments will continue to dominate in developing markets, as the penetration of internet-connected devices remains low compared to key markets such as the UK, where more than half the population now own smartphones. In the US, however, the firm forecasts that 88% of all transactions will take place online by 2016. Despite the hype surrounding NFC technology, Gartner forecasts that it is still a few years away from becoming mainstream, with the number of handsets supporting the technology still relatively low and Apple yet to launch an NFC-enabled iPhone.
“NFC payment involves a change in user behaviour and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants,” says Shen. “It takes time for both to happen.”

Rising global demand suggests that even as major payment services such as MasterCard’s PayPass and Visa’s V.me compete with each other for user loyalty, there is still space for dedicated firms such as Square or iZettle to grow. “There will be a few global players that have the scale and resources to serve large customers and the mass market whose requirements can be readily satisfied by standard solutions,” says Gartner analyst Sandy Shen. “However there will always be segments that cannot be sufficiently served by the global players.”

Groupon tests new service, enters mobile payment battlefield

Groupon, the daily-deals company, is testing out a new mobile payment system that puts it in competition with Square and PayPal. (Charles Rex Arbogast / Associated Press / May 26, 2012)

Groupon has begun testing a mobile credit card reader, encroaching on a domain innovated by Square that PayPal has also recently entered.

The Groupon payment platform will charge a 1.8% transaction fee along with a 15-cent transaction charge. At that rate, the fee is less than Square's 2.75% or the 2.7% charged by PayPal Here and Verifone SAIL, another player in the market. However, Groupon's competitors don't have a transaction fee.

Groupon is giving the card readers away free to merchants along with an iPod Touch, according to VentureBeat That's more than Groupon's competitors, which just hand out readers.

The reader itself is a case that wraps around the phone, unlike the readers used by Groupon's rivals, which connect to mobile devices only through their headphone jacks, according to a Reuters report.

The Groupon mobile payment system was first reported on by VentureBeat, which said it was forwarded an email by a business that was solicited by Groupon for the service.

The mobile card reader for Groupon, which specializes in daily deals, is a money saver for merchants when it comes to high-priced transactions, due to the lower fee. But for smaller purchases the other platforms are more economical for businesses.