Dueling mobile payment platforms were on display at Money2020 in Las Vegas last week, both offering substantial information to merchants and the ability to deliver coupons to consumers in addition to handling transactions. Participants get a secure SIM card to put in their phone and then they can use it at merchants with contactless (NFC) terminals.
Mike Abbott, CEO of Isis, whose Android-based mobile wallet is supported by a partnership of AT&T, T-Mobile and Verizon, said Isis will make it easy for customers to load their American Express, Discover, MasterCard and Visa cards into their phones. CapitalOne, which had been part of the partnership has dropped out and Apple does not support NFC.
It was clear from Abbott’s concise presentation that the company has spent a lot of time thinking about what each participant wants from a payment systems. Merchants want a system that is secure, won’t steal their data, provides a good marketing platform and the lowest possible cost for transaction. Consumers want something that is secure and simple to use. The plastic card has set the bar high, Abbott admitted because it is so easy to use.
To date, easy-to-pay programs have been optimized for a particular part of the payment puzzle, he added. With Isis, a shopper can see her credit card on the screen and swipe to move to other cards behind it. Users can pull up loyalty cards at checkout and set the wallet to follow their favorite brands for offers.
“We brought the brands of our partners forward,” said Abbott. “We have reinvented the back of the card which can show balances and deliver offers at the retail point of purchase.”
Users can pay merchants, top up cards through adding funds, and send money to others. If the phone is lost, the bank can put it out of service and bring it back on if it is recovered.
“This lowers fraud, because every time a phone is opened we deliver a new token to the bank.”
About 95 percent of the POS terminals in the US are provisioned for smart tap, he added. Isis is now in trials in Austin and Salt Lake City and will be ready for introduction at thousands of locations in Q4.
“By the end of next year 30 million Isis devices will be operating at millions of locations across the US and they will be loaded with hundreds of dollars of offers from merchants.”
When Don Kingsborough, vice president of retail and prepaid products at PayPal, took the stage the following day, he said no one had to wait any longer for mobile wallets, or restricts their payments to Austin and Salt Lake City.
“The future is actually now.”
Kingsborough echoed many of Abbott’s points on how a new payment wins adoption in the real world.
But unlike Isis which is in pilot in Utah and Austin, PayPal is live across the US and around the world, Kingsborough said.
PayPal, through its alliance with Discover, has a significant lead, he added, with Discover’s seven million account holders and acceptance at 20 million locations around the world.
“Dozens of players have made announcements and they focus on two cities or only restaurants and they think that is what is going to change consumer behavior. You have to be wherever the consumer already loves to shop, foundational issue is for the technology to work; these are the table stakes for success. You have to be where the consumers already love to shop. Period.”
Anyone rushing out to load PayPal onto a phone might want to stop and read The New York Times Haggler column from Sunday. PayPal apparently generates a huge percentage of The Haggler’s traffic.
“If PayPal isn’t the most reviled online company in the country, which is? The Haggler invites reader suggestions for this unhappy title, but before you write in, consider the sheer quantity of animosity that PayPal inspires. There are anti-PayPal Facebook sites, anti-PayPal YouTube tirades, PayPal-loathing Twitter accounts and more than 550 complaints about PayPal on ConsumerAffairs.com.”
PayPal has direct relationships with 23 merchants and can be used at hundreds of thousands of locations in the US.
‘You have to be everywhere consumers shop. We don’t need new infrastructure, we need to make the infrastructure smarter and fatter.”
Last week PayPal announced PayPal Beacon, a small electronic tool that sits in a store and monitors mobile phone data to see when a shopper, who has opted into sharing information, enters the store.
“This is the critical interface that allows consumers to do the things that they want, they love, and either saves them time or money,” Kingsborough said. The PayPal Payment Code gives consumers an end-to-end shopping experience.”
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