Public transit systems are critical infrastructure that shuttle commuters and fuel tourism. However, purchasing tickets and reloadable passes is often a complex process that creates long queues and checkout friction.

That’s why more cities are moving to contactless payments, as San Francisco did last year with its Bay Area Rapid Transit (BART) system. Now, the Seattle and Puget Sound region’s transit system, ORCA, is launching contactless functionality that will allow riders to tap credit and debit cards, as well as leading mobile wallets like Apple Pay and Google Pay.

While this capability will likely be a boon for daily travelers, it can also dramatically reduce strain on the system during high-traffic events. For example, Seattle is expected to see a surge of visitors when it hosts six matches of the FIFA World Cup this summer. The city also has a packed calendar of concerts and festivals throughout the year.

Prepaid to Contactless

Delivering this functionality requires a substantial infrastructure investment, but the benefits of contactless payments outweigh the costs in this case. As a result, the ticketing and transit segment is one of the few markets shifting away from prepaid models after years of reliance on them.

Contactless payments accelerated during the pandemic due to hygiene concerns, and adoption has continued to grow because of their convenience. In addition, contactless payments offer flexibility that can drive revenue gains. For example, more riders may be enticed to use public transit when they don’t have to wait in long lines or decipher complex fare structures.

Taking the Pitch

This line of thinking was one reason the UK recently scrapped its transaction limits on contactless payments. Tap-to-pay has become one of the most popular payment methods in the region, and enabling more higher-value purchases can further support economic activity.

Despite the benefits of contactless payments, optionality is key. To that end, ORCA will continue to issue prepaid cards for riders enrolled in discounted or free-fare programs, such as seniors or those with organizational sponsorships.

This inclusive approach to payments can help ensure efficient travel for fans who want to be there when the USA takes the pitch against Australia this June.

The post Seattle Area Transit System Adds Contactless Payments Ahead of World Cup appeared first on PaymentsJournal.

UK regulators floated the idea of removing the current £100 transaction limit for contactless payments with physical cards earlier this year. Now, the UK is moving forward with these plans, allowing financial services providers to set their own payment thresholds—or remove them entirely.

These limits were established by the Financial Conduct Authority (FCA) and currently apply only to physical cards, which have not only had transaction caps but often required four-digit PIN authorization. The elimination of both the cap and the PIN requirement is scheduled for March 2026.

In setting the transaction caps, the FCA aims to respond to evolving consumer expectations and the impacts of inflation. Removing both the limits and the PIN requirement could also reduce friction at checkout, enhancing convenience and potentially driving economic growth—a longstanding goal for the region’s leaders.

The Overarching Strategy

As part of its broader economic strategy, the UK recently unveiled plans to launch a licensing program that could reduce the regulatory red tape that has hindered many fintechs. Fintechs play a crucial role in the modern financial services landscape, and this program would allow them to accelerate progress toward full authorization.

There have also been calls from UK leaders to modernize the country’s approach to dynamic technologies, such as cryptocurrencies, and to better harness the potential of artificial intelligence in the financial services sector.

Stepping Up Protections

Amid these efforts, contactless payments have become a staple in the UK. A significant portion of these transactions are conducted via mobile phones. A recent study by UK Finance found that more than half of UK adults surveyed now use mobile wallets for both online and in-store purchases.

Currently, there are no transaction caps for payments made via mobile phones, as these devices typically include built-in security features like PINs or biometric authentication.

Cards, in contrast, do not have these inherent defenses, which is one reason transaction limits were implemented in the UK. Nevertheless, consumers are still protected, as card issuers will reimburse funds in case of fraudulent use.

The FCA also anticipates that removing transaction caps will encourage financial services companies to enhance their own fraud protections measures.

The post UK Scraps Transaction Caps on Contactless Card Payments appeared first on PaymentsJournal.

Apple has now brought its contactless payments platform to its 50th market, marking a major milestone in the company’s global push to turn the smartphone into a full-service point-of-sale terminal. Accepting payments on a phone has become a critical lifeline for small businesses and independent workers—from gig drivers to creators.

Apple has long targeted this segment with its tap-to-pay platform, and the service is now available in Singapore. The technology, sometimes called tap-to-phone, allows merchants to accept contactless payments directly on their devices through both digital wallets and physical cards. In the past, small business owners typically needed to purchase or rent a dedicated POS terminal for the same functionality.

“It’s great that Apple continues to expand the available footprint for tap-to-phone,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “While POS platforms like Square and Clover continue to expand in small storefronts, tap-to-phone brings that same level of efficiency in embedded payments to merchants that don’t operate from a storefront.”

“This key market includes field service providers like tradespeople, and individuals in the creator and gig economies that need a fast, secure way to accept cashless payments from customers,” he said.

Expanding Worldwide

The rollout comes amid a surge of tap-to-pay solutions, a trend accelerated by Apple’s decision to open its NFC technology to third-party developers. That shift has thrust the tech giant deeper into a crowded small business POS market that once dominated by Square dongles.

Apple launched the service in eight countries earlier this year: Belgium, Croatia, Cyprus, Denmark, Greece, Iceland, Luxembourg, and Malta. And its arrival in Singapore brings the total to 50 countries and regions.

As in other markets, Apple has strived to make sure its platform is compatible with major domestic payment methods. In Singapore, the platform will support payment Adyen, Fiuu, HitPay, and Revolut, as well as cards issued by Visa and Mastercard, among others.

Banking on Ubiquity

Despite this rapid proliferation, small business owners now have more options than ever. Many small business payment terminals, including models from Clover and Square, closely resemble smartphones, but these devices are still largely designed for merchants with employees.

Visa also offers a tap-to-phone solution, which has experienced a threefold increase in adoption over the past year. While Visa may have a more developed payments infrastructure, the near-ubiquity of the iPhone may give Apple an advantage in this market.

The post Apple Expands Contactless Payments to Singapore appeared first on PaymentsJournal.

After years of gradually increasing the limits on contactless card payments, the UK is now considering removing transaction caps entirely.

The current limit on contactless card payments is £100 ($136), and many transactions still require four-digit PIN authorization. If the Financial Conduct Authority (FCA) moves forward with its proposal, both the cap and the PIN requirement could be eliminated as soon as next year.

According to the BBC, the FCA is considering this change to reduce friction at checkouts and to help consumers cope with rising costs of goods and services. Additionally, the regulator noted that removing transaction limits could drive economic growth in the UK—an objective Prime Minister Keir Starmer set when he called for cuts to the country’s red tape last year.

Gauging the Impacts

It is difficult to gauge the impact that eliminating transaction limits on contactless card payments could have on the UK economy. Although contactless payments have become the predominant payment method in the UK, there has been a growing preference for phone-based payments over cards.

Payments made from digital wallets via phones don’t have a transaction limit in the UK. This is because phones have an extra authentication layer, provided the user enables a PIN or biometric authentication on their device.

Since cards lack these protections, regulators have been concerned about the potential for fraud or theft in contactless payments.

These concerns aren’t unfounded, as evidenced by the series of fraudulent purchases at New York-based convenience store chain Stewart’s Shops. After criminals made numerous sizable transactions with stolen cards, the retailer even shut down its contactless payments system across 350 stores.

Carrying the Burden

While some experts noted that a systemwide shutdown at Stewart’s may have been an overreaction, the rising frequency and sophistication of fraud attacks is well-documented. There have even been cases in which bad actors stole card data, added it to digital wallets, and made contactless payments in-store.

Although fraud is always a concern, the FCA emphasized that card issuers—not consumers—would bear the burden of fraudulent transactions. The regulator also said that many lenders allow their cardholders to set their own transaction limits, an option the FCA expects to become more widely adopted.

The post UK Considers Scrapping Transaction Caps on Contactless Card Payments appeared first on PaymentsJournal.

As the battle for small business point-of-sale (POS) solutions heats up, Apple has expanded its platform that transforms iPhones into payment terminals.

The company’s Tap-to-Pay service has launched in eight additional countries:  Belgium, Croatia, Cyprus, Denmark, Greece, Iceland, Luxembourg, and Malta. This solution enables merchants to accept contactless credit and debit card payments directly on their phones using NFC technology.

Tap-to-Pay will be compatible with a variety of payment platforms tailored to each country, including those offered by Adyen, Revolut, Mollie, and Stripe. Contactless transactions initiated by wearables and other devices will be supported, and customers can also pay using Apple Pay or other digital wallets.

Apple noted that all payment data will be encrypted and processed using its Secure Element technology. This technology plays a critical part in securing Apple Pay transactions, and Apple stated that, under this model, it has no knowledge of what is being purchased or who is making the purchase.

A Crowded Field

The recent boom in tap-to-pay technology (also known as tap-to-phone) has largely been made possible after Apple opened its NFC tech to third-party developers. As a result, the tech giant has become a serious competitor in the crowded small business POS market.

Many small business payment terminals now resemble smartphones—such as Clover’s Flex system and Square’s newly launched Handheld. However, these devices are just one component of a broader platform that often includes industry-specific features like waitlisting and inventory management. This indicates that these solutions are increasingly geared toward upmarket merchants with employees.

A Growing Middle Ground

Apple’s Tap-to-Pay platform primarily targets the audience once served by Square and its signature dongles. This includes merchants like local artists, gig workers, and sole proprietors who require a portable payments terminal.

While the need for additional accessories may be waning, demand for phone-based payment acceptance is expected to grow.

“Once the use cases manifest themselves, tap-to-phone will become increasingly popular,” Don Apgar, Director of Merchant Payments at Javelin Strategy & Research told PaymentsJournal. “There is a growing middle ground where individuals need some business capabilities on their personal account.”

The post Apple Expands the Reach of Tap-to-Pay for Small Businesses appeared first on PaymentsJournal.

Splitting the bill just got easier for Samsung Wallet users. Soon, they’ll be able to send money by simply tapping their phones.

After building the functionality with Visa and Mastercard, Samsung will roll out a tap-to-transfer feature for U.S. users in the coming weeks. It will enable users to transfer money from a debit card in their Samsung Wallet to a card stored on the recipient’s device—even if that card is held in competing digital wallets from Apple and Google.

Because the transfers utilize NFC technology, Samsung Wallet users will also be able to send funds to a physical debit card that supports tap-to-pay.

Repaying the Coach

Contactless P2P payments can eliminate many of the traditional pain points associated with third-party payment platforms like Venmo or Cash App.

For instance, if a group of parents wanted to reimburse a coach for ordering a team trophy, they would all need to have accounts on the same payment app. Then, they’d have to find the coach within the app and verify their identity. Tap-to-transfer technology streamlines the process by enabling cross-platform transactions and automatically verifying the recipient when a phone or card is tapped.

Additionally, Samsung noted that physical proximity isn’t always required. Samsung Wallet users will be able to search for others on the platform by phone number and still send them a peer-to-peer (P2P) payment.

Including the Spectrum

The addition of P2P payments puts Samsung Wallet in competition with well-established firms like PayPal and Block. This may prove difficult, as the digital wallet has already struggled to gain market share in a U.S. market dominated by Apple Pay and Google Pay.

However, the added functionality of Samsung Wallet reflects a growing trend in which digital wallets aim to support a broad spectrum of payment options, from BNPL to stablecoins.

An increasing number of companies are also vying to become the digital wallet of choice. In a reversal of Samsung’s strategy, PayPal—a company known for its P2P platforms—recently announced it was launching a digital wallet of its own to capture more in-store payments.

The post Samsung Adds Contactless P2P Payments Functionality to Its Wallet appeared first on PaymentsJournal.

Financial literacy is essential for all age groups, especially children, as they develop habits that will benefit them in the long run.

Recently, Google announced a new feature that enables children with Android phones to make in-store purchases using Google Wallet.

Parents and guardians will still need to load the payment card, and they will be notified by email whenever their child makes a transaction. They will also be able to manage and track activities through Google’s Family Link parental control app.

While kids will be able to use Google Wallet to access items like event tickets, library cards, and gift cards, they currently won’t be able to use it to pay for online purchases. Additionally, these services will only be available to users in the U.S., UK, Australia, Spain, and Poland.

Giving Kids the Reins

Youth banking and payment accounts have surged in recent years. While traditional banks like Bank of America and Chase offer such services, peer-to-peer apps like Venmo and Cash App have also introduced products specifically geared toward kids.

Additionally, youth-centric apps from GoHenry and Greenlight not only provide bank accounts and debit cards but also feature interactive lessons to teach kids healthy spending habits.

While some parents may hesitate to give their kids the reins to these financial tools, all these options include features that allow parents to set limits and monitor their children’s activities.

Building Banking Relationships with Young Customers

Parental buy-in is the most important factor for gaining traction in the highly desirable youth market. This space has become competitive, as Gen Alpha—children born in the last 15 years—is expected to surpass two billion people.

Not only will Gen Alpha be the largest generation ever, but they will also be highly tech-savvy and likely to have plenty of spending power. Brands that establish strong relationships with younger users early on will be best positioned to retain them into adulthood.

While these factors likely contribute to Google extending its digital wallet functionality to kids, there is another aspect to consider. Apple already allows kids to use Apple Pay for in-store purchases with its Apple Cash Family app.

The post Kids Can Use Google Wallet to Tap-to-Pay in Stores, with Parental Supervision appeared first on PaymentsJournal.

Amid strong competition to become the go-to point-of-sale provider for small- to medium-sized businesses, Intuit has introduced a solution that allows QuickBooks Online users to accept payments directly on their iPhone.

While tap-to-pay tech isn’t new, Intuit’s offering integrates is that it seamlessly with its QuickBooks suite, allowing small business owners to reconcile payments and manage their finances in one place.

According to data from QuickBooks, nearly half of U.S. small businesses report that cash flow is a significant challenge. Intuit believes its solution can help optimize cash flow while giving customers a convenient payment option—without the need for a traditional point-of-sale (POS) system.

“Intuit used to have a POS that worked with QuickBooks, but when I went to research for our recent Small Business POS Scorecard, I discovered that Intuit announced the end of life (EOL) on the POS platform,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “It looks like from this announcement that the POS is being replaced by an app that includes tap-to-phone payment acceptance and some basic features like invoicing.”

“In putting together our scorecard, I saw how super-competitive the POS market has become for small business,” he said. “It makes sense that QuickBooks would pull back from trying to keep up in that space, and switch to offering a mobile app that includes basic functions like the ability to accept card payments.”

Tap-to-Phone Traction

Mobile devices have been able to accept payments through add-on devices, like Square’s dongles, for some time. However, after Apple unlocked its NFC technology to third-party developers last year, many solutions have emerged that can turn iPhones into payment terminals.

Also known as tap-to-phone, these solutions have quickly gained traction with small businesses because they allow merchants to accept multiple payment types without the need for expensive hardware.

According to Visa, nearly 30% of tap-to-phone users are new small businesses. These solutions are especially powerful for gig economy workers, creators, and side hustlers, who can use their existing device to accept card payments anywhere.

The post Intuit QuickBooks Adds Contactless Payments for Small Merchants appeared first on PaymentsJournal.

Instant payments platform Pix will integrate NFC contactless payment functionality for customers who have linked their bank accounts to Google Wallet.

Brazil’s central bank unveiled Pix by Proximity at a joint presentation with the president of Google Brazil. Initially, this feature will be available only to Google Wallet users on Android phones. However, the platform plans to roll out contactless payment support to all customers next year.

“For the user, everything will be done naturally,” said Natacha Litvinov, Head of Payment Partnerships for Latin America at Google in a statement. “The user can choose which account linked to the Google wallet will be used to execute the Pix transaction. Payment confirmation is done using biometrics, and the payment message is sent to the cell phone and also to the machine.”

Wider Integrations

The widescale launch of Pix by Proximity comes after Brazil established a framework for contactless payments this summer that was approved by the Central Bank and the National Monetary Council.

In addition to contactless payments, Pix and Google are working to add a “Pay with GPay” button in e-commerce applications to speed up transactions while keeping buyers on the seller’s platform. This integration comes as Pix’s use in e-commerce applications is soaring—the platform is expected to overtake credit cards as the predominant payment option in Brazil next year.

As the platform scales, concerns about fraud and security have emerged. The Central Bank plans to address these by installing transaction limits for purchases made from unknown devices.

In addition, Pix and Google Wallet are launching Night Mode. When activated, it will block all Pix transactions from personal accounts to unknown beneficiaries between 8 p.m. and 6 a.m.

A New Level

In addition to benefits for consumers, contactless payments offer substantial benefits for merchants. Customers have come to expect mobile payment options because they are fast, secure, and more hygienic. With the growing popularity of Pix, merchants who support contactless payments have a strong opportunity to expand their customer base.

“Today, the number of transactions sent to companies is still lower than that sent to individuals (the ratio was 70% to 30% this summer), but this could change,” Pedro Romero, Director of Wallet & Banking at Brazil’s PicPay, told Valor Investe. “We usually make many more payments to businesses than to individuals, so this new experience—which brings countless advantages to merchants—will take Pix to a new level.”

The post Pix Launches Contactless Payments for Google Wallet Users appeared first on PaymentsJournal.

Tap-to-pay transactions have become an integral part of the payments landscape, but they represent only half of the mobile payments equation. The same contactless payment chip that smartphones use to transmit payment data can also receive payments through tap-to-phone technology.

That functionality turns any mobile device into a payment terminal, and there are a multitude of use cases for that capability. As Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, found in his latest report, Making the Most of Tap-to-Phone Technology, tap-to-phone represents the next evolution of contactless payments.

In-Flight Solution

One of the early use cases for tap-to-phone tech was implemented by Delta Airlines. Delta gives all its flight attendants company-issued iPhones, which they use to review flight schedules, check layovers, and register passenger counts. However, each plane also had two or three payment terminals for in-flight purchases.

If a customer wanted to make a purchase, the flight attendant would have to locate a payment terminal and perhaps wait for another customer to make a purchase. Once Delta added tap-to-phone functionality to its attendants’ iPhones, the airline eliminated the need for separate terminals.

“There’s more accountability that way, because every device is directly tied to an employee,” Apgar said. “There are no shared devices, and the airline doesn’t have to worry about a whole squadron of equipment from different manufacturers that must be charged, maintained, and updated. It takes that whole layer of management out of the process.”

Device Duplication

A similar device duplication is often found at home improvement stores like Lowe’s or Home Depot. Employees are equipped with devices that help them locate and manage inventory, then there are separate payment terminals.

“Home Depot employees have these little Zebra devices that run on Android, but they function much like a phone,” Apgar said. “They might use it to help a customer locate an item, but the customer experience could be significantly improved, especially with big-ticket purchases, if the consumer could pay for the item right there and have it brought out to their car.”

Another potential use case for tap-to-phone technology is at fast-food restaurants. At highly popular fast-food locations, the drive-thru lines can quickly escalate. Employees often try to speed the line by taking orders on a tablet, but payment is often accomplished using a separate mobile device. The operation would be much more efficient if a customer could order and pay on the same device.

There are also tap-to-phone use cases on peer-to-peer platforms like Venmo and Cash App. Instead of friends using two phones to ensure a P2P payment is sent and received, the recipient could just open their P2P app, and the sender could tap their near-field-communication-enabled card on the recipient’s phone.

Tap-to-phone can also improve the online shopping experience. Digital wallets streamline purchases on e-commerce platforms because the wallet validates the customer without extra steps.  

“If a customer is shopping online and they are paying by card, why not simplify the process and have the consumer tap their card on their phone?” Apgar said. “It’s almost like two-factor authentication. One-time passcodes are an outmoded form of verification because the customer is often verifying a code on the same device they’re already using. Tapping a card on a phone could be another form of two-factor authentication.”

Business Differences

In addition to added security, tap-to-phone delivers an array of benefits to business owners, especially in the gig and creator economies. Banks like Chase have created the technology that supports tap-to-phone transactions for their business accounts, but that same functionality can also be offered to consumers who require some business banking solutions.

The issue with merchant bank accounts is that they are more expensive for banks. When a merchant opens a checking account, the bank must conduct a series of compliance checks. They must check the business against the OFAC sanctions list and authenticate the identities of the business owners.

If the merchant decides to add credit card payment support later, the bank will have to conduct the same process again. However, because there is an underwriting aspect to credit cards, the bank will have to consider those risks as well. These security measures might make sense for a high-volume business but not for an artist who sells watercolors at a local farmer’s market.

“If that artist opens a checking account and they have passable credit, they will likely receive a $5,000 line of overdraft credit with little trouble,” Apgar said. “Why not attach card acceptance capabilities to their personal account with something like a $5,000 monthly limit? The bank can give the individual two accounts and perform the underwriting and compliance checks at once instead of forcing the artist to open a business account.”

The Growing Middle Ground

One factor that hindered tap-to-phone ubiquity was Apple’s reluctance to open its contactless payment technology to outside developers. After some pressure, Apple has agreed to make its NFC technology available to third parties. Apple and Android devices should now support the nascent technology, which removes a substantial obstacle to adoption.

“Once the use cases manifest themselves, tap-to-phone will become increasingly popular,” Apgar said. “There is a growing middle ground where individuals need some business capabilities on their personal account. We’re at a tipping point where, even going into next year, we’re going to see tap-to-phone become far more prevalent than it has been.”

The post Tap-to-Phone Technology Unlocks the Full Potential of Contactless Payments appeared first on PaymentsJournal.

It’s increasingly common for consumers to pay at the point of sale using Apple Pay or Google Pay. This transaction is made possible by two emerging payments technologies: contactless payments and digital wallets. If a customer has integrated a buy now, pay later option into their digital wallet, that single transaction could include three payments innovations.

Many digital wallets have also begun to support crypto transactions, but the infrastructure behind digital assets is equally crucial to the future of payments. Tokenization, stablecoins, and blockchain have been adopted by financial companies and are increasingly being used to drive innovation and build global connections.

Connectivity is also central to the open banking model that has emerged in recent years. This system is built on financial technology companies that serve as intermediaries between banks and their clients. It’s best exemplified by instant payments, also known as pay-by-bank or account-to-account transactions, where funds move from one bank account to another in seconds.

These five forces—contactless payments, BNPL, crypto, digital wallets, and open banking—have dominated headlines in recent years, and for good reason. These emerging payments trends are driving the future of the financial industry.

Introduction of Emerging Payments

BNPL is often seen as an evolution of layaway, but unlike traditional layaway, consumers don’t have to wait until an item is fully paid off to receive it. Instead, they can split their purchase into smaller installments at the point of sale and receive the product immediately.

BNPL loans have soared in popularity because they often come with no interest or fees, making them an attractive alternative to high-APR credit cards. However, customers who miss a payment may face late fees.

While BNPL is often associated with e-commerce checkout, it is increasingly being supported by digital wallets for a myriad of transactions. A digital wallet is an application that stores payment details and passwords for multiple payment methods in onr plsvr. Popular digital wallets, such as Apple Pay and Google Pay, originate from mobile platforms, which is why they are often referred to as mobile wallets.

The bridge between point-of-sale devices and digital wallets is contactless payment technology. Contactless payments, also known as tap-and-go, use radio frequency identification, near-field communication (NFC) or quick response (QR) code technology to process transactions.

In the U.S., most consumers use NFC to transmit payment data from their smartphones, wearable devices, or cards. In other regions, such as China and India, it is more common for customers to pay by scanning a QR code.

While digital wallets in the U.S. most frequently integrate with credit cards, mobile payments in Brazil or India more often rely on instant payments. These payments are facilitated by third-party technology companies that function as intermediaries between consumers and banks.

Third-party developers drive these transactions, and for the open banking system. One of the central tenets of open banking is unlocking customer banking data for third parties through application programming interfaces (APIs).

Some of the most well-known third-party fintechs are peer-to-peer platforms like Venmo and Cash App. In addition to allowing users to send payments to friends and family, both Venmo and Cash App have added support for cryptocurrency transactions in recent years.

Cryptocurrency is a digital currency that is not issued by any government or central bank. It is supported by blockchain, a network of computers that constantly validate and authenticate transactions. The goal of crypto is to create a decentralized platform where funds can be exchanged without the need for third parties.

Key Trends in Emerging Payments

Although designed to be decentralized, some of the world’s largest financial institutions have increased their involvement in digital assets. Institutional investing has accelerated since the approval and launch of bitcoin and ether ETFs, which allow retail investors to buy and sell crypto as easily as they would buy stocks.

Many of these institutions are finding innovative ways to use blockchain technology beyond crypto. There are a multitude of use cases for tokenization, which is the digitalization of physical assets. A house deed, for instance, could be tokenized, placed on the blockchain, and then bought or sold in near real-time. A token can also be fractionalized and sold to multiple parties.

Along with the growing adoption of digital asset technology, more organizations are leveraging open banking platforms to lower costs and increase efficiency. Instant payments, being secure and real-time, help businesses reduce fraud while enabling faster and more accurate reconciliation.

Another emerging trend for non-financial companies is offering financial products on their platform, known as embedded finance. For example, when a company provides a buy now, pay later option at their e-commerce checkout, the customer isn’t redirected to a separate payment system. Instead, the transaction is embedded within the company’s platform.

BNPL has become a popular addition for companies like Apple, which shuttered its in-house BNPL operations and integrated BNPL options from Affirm into Apple Pay. This integration highlights another trend for digital wallets: they are increasingly storing many of the same items found in physical wallets, including gift cards, loyalty cards, and even driver’s licenses in certain states. Digital wallets can go beyond physical wallets, also storing everything from coupons and tickets to crypto.

The continued adoption of digital IDs is a key trend for digital wallets. One factor hindering wider adoption is that consumers still often have to carry a physical wallet, often simply to house their ID. This duplication leads many consumers to question the need for both a physical and a digital wallet. However, as digital IDs gain ground, digital wallets have the potential to become the only wallet a consumer needs.

Contactless payments will be the primary method for these transactions as digital wallets gain traction. Verifying a digital ID through NFC technology also offers more security. When a customer purchases an age-restricted item like alcohol, they can verify their age without sharing any other personal data with the merchant.

The Opportunities of Emerging Payments

While contactless technology is driving the new payment paradigm, there is still ample room for growth. One of the most important benefits of contactless payments is its simplicity—customers can make purchases while leaving their cash or card in their wallet.

However, QR codes can transmit more payments data, which is why they have been widely adopted in countries where open banking is prevalent. QR codes offer both merchants and consumers added protection against fraud, as well as increased ease of use. When a customer scans a QR code, they can send the relevant payment data without compromising their personal details.

One of the key opportunities for digital wallets is integrating instant payments into the U.S. market. FedNow and RTP are instant payments rails that launched in the U.S. last year. While many financial institutions have joined the networks, their connectivity is often limited. The number of banks fully integrated with these rails is still just a fraction of the U.S. banking system.

BNPL has come much further in the U.S., but there is still the opportunity for expansion, especially among different demographics. BNPL has been most widely adopted by younger and lower-income consumers, leaving an opportunity for the tech to make inroads with older and more affluent consumers.

One of the reasons why many U.S. consumers still use credit cards is the airline miles and cashback perks they offer. These rewards aren’t currently an option with buy now, pay later services, but they could be in the future. There is also the potential for BNPL to become a viable option in cross-border payments.

Cross-border payments are in high demand, yet issues persist with slow payment settlement, complex currency conversions, and country-specific regulations. One of the most promising candidates for facilitating cross-border transactions is stablecoins. A stablecoin is a type of crypto that tracks the value of a fiat currency, such as the U.S. dollar, one-to-one.

Stablecoins are an attractive alternative for organizations because they are less volatile than many other cryptocurrencies. They can be a reliable way to send instant cross-border payments in the situations where they are accepted.

Challenges Facing Emerging Payments

The insufficient regulatory framework surrounding digital assets has become an increasingly urgent issue for the crypto industry, especially in the U.S. The U.S. Securities and Exchange Commission has taken the position that cryptocurrencies are securities, not  commodities, meaning that digital assets fall under securities laws. The SEC has initiated enforcement actions against many major crypto players, alleging they are operating as unregistered securities brokers.

Regulators worldwide are concerned that bad actors might use crypto and digital assets to conduct nefarious activities like money laundering and fraud. There has been a rise in fraud attacks across the industry, with decentralized protocols making crypto holders more vulnerable to criminals. Once a crypto owner transfers their assets, the transaction is irrevocable and there are often no consumer protections in place.

That irrevocability is also a challenge for instant payments. Users can be manipulated into sending an instant payment to criminals, leaving no framework for reimbursement. The potential for fraud or misrouting increases with cross-border instant payments.

Another challenge to the adoption of instant payments is that many financial institutions aren’t equipped to invest the time and money required to upgrade their systems. The U.S. has a well-established and efficient banking system, so  many businesses and consumers don’t see the benefit in switching.

While many banks and credit unions have successfully undergone digital transformation, they often rely on third-party companies for an increasing number of functions, which can lead to gaps in service. Such was the case with Synapse, where the fintech company failed to do their due diligence with compliance. There is also increased potential for fraud when there are multiple parties that have access to customers’ banking data.

Digital wallets also carry risks of fraud. As digital wallets contain more sensitive data, they become targets for hackers. If a user’s phone is stolen, a criminal can  gain access to all the data stored in the wallet.

Though contactless payments are generally more secure, there have been concerns that hackers could intercept contactless payment details at the point of sale, either by installing a device at checkout or standing nearby with a mobile phone.

Fraud isn’t as much of a concern with BNPL, but the industry has attracted regulatory scrutiny because of its lack of consumer protections. BNPL providers aren’t required to report their loans to the New York Federal Reserve like credit card companies, and the skyrocketing growth of BNPL debt has led many to speculate that there is a mounting amount of “phantom debt” that could soon spiral out of control.

The U.S. Consumer Financial Protection Bureau recently issued rules stating BNPL companies must conform to the same standards as credit card companies. BNPL services will have to send monthly billing statements, fully disclose their fees, and handle disputes like their credit card counterparts. 

The CFPB has also become apprehensive about the massive amounts of consumer financial data that is available to non-bank companies. To that end, the CFPB has proposed rules that would require digital wallet providers to abide by the same laws that govern banks.

What’s Next for Emerging Payments

Those regulatory concerns aren’t likely to hinder the growth of digital wallets or BNPL. Instead, BNPL services have increasingly expanded their efforts to make BNPL a payment option at brick-and-mortar stores.

There may also be growing support for instant payments at U.S. One factor that will drive the traction of instant payments is collaboration between instant payment networks and merchants to offer loyalty rewards or discounts that can compete with credit cards. The industry also has room to improve its consumer protections.

One way to ensure transactions are accurate and secure is through biometric authentication. While contactless payments are currently accomplished through a mobile device, there have been pilot programs for customers to pay by facial recognition or fingerprint verification. These purchases are faster and much more secure, which is why biometrics have been adopted by many digital wallet providers.

Digital wallets are set to become the central hub of payments behavior, and one of their main integrations will be increasing support for crypto, stablecoins, and central bank digital currencies. CBDCs are like stablecoins that are issued and backed by a government instead of a private company.

Conclusion

In addition to tokenization and stablecoins, blockchain will be a powerful driver for payments because it provides a highly secure infrastructure for real-time transactions. Although there has been some uncertainty in the U.S. about digital assets technologies, the EU has begun to define a framework for crypto regulation that could serve as the blueprint for other countries to follow.

Any emerging payment method will be subject to regulatory scrutiny, but a clearer framework should only serve to guide the financial technology industry as it shapes the way forward. There are proven use cases for BNPL, digital wallets, contactless payments, crypto and open banking, and that will continue to drive these technologies—and the payments industry—forward for years to come.

The post Emerging Payments: Trends, Technologies, and the Future of Transactions appeared first on PaymentsJournal.

Boston T riders will be able to tap their contactless credit or debit card, mobile wallet like Apple Pay or Google Wallet, or Apple Watch to pay for the bus and subway.

Beginning on August 1, the MBTA will roll out its long-awaited new fare system that accepts contactless payments onboard buses, Green Line trolleys, Mattapan trolleys, and all gated subway stations.

Commuters and visitors will be able to tap to pay for their transit fare as they would do for any retail purchase. T riders will no longer have to endure common pain points associated with public transit, such as missing a bus or train while waiting in line to buy or add money to a fare card, worrying about not having exact change or enough cash, and trying to figure out the fare system. With contactless payments, transit riders can simply tap to pay and be on their merry way. Traditional fare payment options, including the CharlieCard, will continue to be accepted.

A significant majority (94%) of transit riders expect public transit to offer contactless payments, according to Visa’ global mobility survey. The MBTA joins other major transit systems like New York’s MTA and London’s TFL in implementing a contactless fare system. The MTA’s OMNY contactless fare system has been very well received by straphangers in the Big Apple with a customer satisfaction rate of 85%. Over three-quarters of New York City Transit regular fare customers are now tapping to pay, and nearly 70% are tapping with their smart device. In London, contactless payments now make up more than 70% of pay-as-you-go rides on TFL buses, and over a third of adult contactless single-ride fares on the Tube are now made using a mobile device.

Contactless payments help transit agencies reduce costs associated with cash handling and proprietary fare cards, like the CharlieCard and Oyster cards, which are expensive to print and encode. Ticket vending machines require heavy upfront investments and carry additional maintenance and repair costs. The MBTA also expects contactless payments to make boarding buses and trolleys smoother because riders will be able to use all doors to climb aboard instead of only the front door. Passengers will also be able to pay near-instantaneously with a credit or debit card or mobile device instead of adding cash value at the fare box on board.

Initially, MBTA customers will only be able to pay per ride using contactless payments. T riders with weekly or monthly passes will need to continue to use their CharlieCards. Gradually, the MBTA will likely introduce other capabilities, such as fare capping, which lets customers get the same benefits of a daily, weekly, or monthly pass without paying advance. For example, in New York, OMNY caps weekly fares at $34 (the same price as a weekly Metrocard) when a customer taps the same card or device for every ride. In the meantime, T riders can register for a Charlie account to view trip history, manage contactless cards or devices used for payments, and set preferences for language, accessibility, and notifications.

The post T Riders Can Soon Tap to Pay for Bus and Subway Fares in Boston appeared first on PaymentsJournal.

The NFC Forum announced that consumers could soon conduct multiple functions in a single contactless transaction.

The near-field communication (NFC) standard makes tap-and-go payments possible for most of the world’s 4.5 billion smartphone users. According to the Forum, which includes experts from Apple, Google, Sony, and others, multi-purpose tap will harness NFC’s ability to both read and write data across a connection.

A customer purchasing alcohol, for instance, could verify their age, purchase a product, earn loyalty points, and receive a digital receipt in a single tap. The Forum also touted the tech’s ability to transform mass transit; multi-purpose tap could be used for both purchasing and validating tickets in a single location.

The New Gold

The NFC Forum emphasized how multi-purpose tap could blend payments and loyalty programs. A customer could pay at the point of sale and their rewards account would automatically receive relevant discounts and loyalty points. Merchants could use multi-tap NFC to send targeted ads to their customers. The tech also gives retailers access to a wealth of consumer shopping data.

“Customer data is the new ‘gold’ as industry leaders look to map and understand spending habits,” the NFC Forum wrote. “Connected and dynamic loyalty programs enable merchants to monitor trends, allowing them to be agile and make informed decisions that help them meet the needs and wants of their customer base. In turn, this can help drive high-value behaviors and profitable spend.”

The Ideation Stage

The technology’s ability to mine consumer data from their devices raises privacy concerns that the Forum didn’t address in their report. Those concerns are magnified by the increasing amount of data that consumers store in digital wallets, including their government-issued identification.

Multi-purpose tap NFC is still a developing technology, however, and the Forum called on the community to offer insights.

“While multi-purpose tap is undoubtedly an exciting prospect that looks set to transform how our devices interact with each other, it is important to recognize that it is still in the ideation stage,” the Forum wrote. “NFC Forum is carefully evaluating the requirements of each market that multi-purpose tap stands to benefit to ensure that its unique value is accentuated as needed for each individual use case.”

The post Mobile Payments Could Soon Include NFC Multi-Purpose Tap appeared first on PaymentsJournal.

The wearables market stagnated in 2023 as consumers felt the pressure of inflation. Those who bought their devices during the heyday of wearables have held onto them in hopes prices would ease. The market is expected to pick up in the latter half of the year as users finally replace their aging devices.

Unfortunately, this boost may come too late for Fitbit, once a leader in wearables with its fitness-tracking smartwatches. The company has been surpassed by competitors like Apple. Since Google acquired Fitbit in 2021 for $2.1 billion, there’s been uncertainty about the future of the brand. And Google has done little to reassure Fitbit’s loyal consumer base.

Recently, the tech giant recently discontinued Fitbit sales in multiple countries, leading to the departure of independent developers who once thrived on the platform. In a further development, Google announced that Fitbit Pay will be phased out and replaced with Google Wallet.

A Superior Platform

Google has made strides to expand its digital wallet into much more than a payments platform.

“From Google’s perspective, it makes perfect sense,” said Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research. “It will unify its payments methods on Android. On the consumer side, as we found in our latest North American PaymentsInsights survey, more people are using digital wallets on wearables, especially when they’re exercising. It’s just more convenient than using a card or a mobile phone.”

Questioning the Motive

While Fitbit fans might appreciate the added functionality, they’re likely concerned about the future of the brand. Which raises the question: why did Google buy Fitbit? At the time, the tech giant said that the Fitbit acquisition would bolster innovation in Google’s wearables offerings.

Others have speculated Google bought Fitbit not because of its product line, but for the trove of customer health information housed in the fitness tracker’s systems. Given Google’s recent actions, that reasoning has become more plausible.

Users will still be able to add new cards to Fitbit Pay until July 29, when that functionality ends. Google also announced it will close Fitbit’s online shop. All Fitbit products will now be available in Google Store.

The post Google to Phase Out Fitbit Pay, Shifting to Google Wallet appeared first on PaymentsJournal.

The Port Authority of New York and New Jersey is expanding its Total Access PATH Payment (TAPP) system to major transit hubs.

The first phase of the rollout, which was completed this week, saw the installation of 12 new turnstiles at the World Trade Center. TAPP is now accessible through select turnstiles at terminal stations where PATH lines begin and end. Other  stations where TAPP is featured include the 33rd Street terminals in New York, Newark-Penn Station, Journal Square, and Hoboken in New Jersey—all of which constitute the system’s busiest, serving 67% of total ridership in 2023, per Port Authority.

The TAPP rollout will extend to remaining stations in New Jersey and New York in the coming months.

Since its launch in December, PATH has recorded over one million TAPP transactions, signifying rapid and seamless adoption by riders. On average, nearly 20,000 TAPP transactions occur on weekdays as passengers enter the PATH system.

“These TAPP numbers show we’ve tapped into something our riders truly appreciate, giving them more flexibility and more freedom in how they pay their fare,” said Port Authority Chairman Kevin O’Toole said in a prepared statement. “The first phase of the TAPP rollout has been a resounding success, and we’re excited to bring this technology to the rest of the system in the near future.”

More Contactless Trips

As Elisa Tavilla, Director of Debit at Javelin Strategy & Research pointed out last year, more transit operators around the globe are introducing contactless fare payment systems, offering riders the convenience of tapping their credit/debit card or mobile phone for payment.

This trend shows no signs of slowing down, as contactless and digital payments continue to enhance efficiency and cost savings for both transit operators and customers. Transit agencies benefit from reduced expenses related to maintaining ticket vending machines, printing fare media, and handling cash.

The post PATH Expands Contactless Payments Efforts Across Major Transit Hubs appeared first on PaymentsJournal.

Britain’s retail business is now conducted almost entirely via contactless payments, according to data from Barclays. A record 93.4% of all in-store card transactions of up to £100 were made using touch and pay methods in 2023.

The survey revealed significant growth among individuals 65 and older, signaling a diminishing age gap in contactless payment usage. Even among the elderly ages 85 to 95, contactless payments usage reached 80% for the first time. Overall, there were 7.8% more touchless transactions in the UK in 2023 compared to the previous year.

The average individual user made 231 contactless transactions in 2023, up from 220 the year before. They also bought more expensive items. As a result, total consumers spending via contactless payments rose 8.9% to £3,623 for the year.

Younger People Leave the Wallet at Home

Despite the narrowing age gap, there is one way in which younger consumers have differentiated themselves: mobile payments. More individuals ages 18 to 34 are choosing to pay without cards altogether and simply use their phone. Although 22% of shoppers in that age group don’t even bring a wallet when they go shopping, just 1% of those over 75 said the same.  Additionally, 15% of those ages 18 to 34 expressed a preference for paying at a restaurant by scanning a QR code, which eliminates the need to wait for the bill at the end of a meal.

However, when it comes to big-ticket items, a different trend emerges. In the UK, a £100 limit applies to purchases made with physical cards. For transactions exceeding £100, traditional payment options are still preferred. Chip and PIN cards, characterized by an embedded EMV chip, remain popular, but nearly one in four, or 23% of respondents, still prefer cash for these purchases. Mobile wallets rank third in popularity for big-ticket purchases at 19%.

These findings reinforce the idea that the UK has seen a preference for contactless payments over cash for some time now. According to a 2023 survey from takepayments, nearly half of respondents (48%) said they preferred contactless card payments—more so than cash (17%) and chip and PIN transactions (11%).

The post For British Consumers, Contactless Payments Are the Way to Go appeared first on PaymentsJournal.

In a bid to streamline point-of-sale experiences for small and micro businesses, TD Bank has launched Tap to Pay on iPhone.

Through Tap to Pay, business owners can accept a variety of contactless payments directly through their mobile phones, eliminating the need for any additional POS hardware.

A recent survey from TD revealed that many small businesses—particularly micro businesses—face challenges in their day-to-day operations because of the lack of necessary payment devices or hardware. The launch of Tap To Pay on iPhone aims to address this by offering a flexible payment solution that caters to evolving customer preferences. By introducing this option, TD is giving businesses—whether they operate food trucks, pop-up stores, or local markets—the opportunity to accept a range of contactless payments, including credit and debit cards, digital wallets, and wearables.

More Contactless Options

Financial institutions have intensified their efforts in contactless payments over the past year.

In July 2023, PayPal and Venmo embarked on a similar venture by launching Tap to Pay for small businesses. Recognizing that approximately 80% of buyers utilize contactless payments for purchases, PayPal aimed to ensure that small business could embrace this trend without significant investments in contactless POS systems, thereby meeting consumers where they are.

Similarly, a few months later in August, J.P Morgan launched a Tap to Pay on iPhone solution for its U.S. merchant clients, giving them the ability to accept contactless payments. Sephora became the first merchant to leverage the service.

Overall, contactless payments offer a swift and user-friendly solution not just for small businesses but also for consumers. It’s likely that more financial institutions will continue to prioritize this space, ensuring that the businesses they serve are well-equipped to attract their target audiences.

The post TD Bank Launches Tap to Pay on iPhone for Small Businesses appeared first on PaymentsJournal.

ExxonMobil Corp. has expanded its contactless fueling options by joining the Car IQ Inc. payment network for fleet vehicles. Car IQ allows fleet companies to use its mobile payment platform to more efficiently buy fuel and other services.

Car IQ Pay, which works with Visa Fleet, is accepted at more than 12,000 Exxon and Mobil stations. Its services focus on fueling large and small truck fleets, available at more than 8,200 locations with retail diesel pumps and another 800 with commercial truck diesel pumps.

ExxonMobil has been growing within this space for some time now. In 2020, the company announced that it had introduced a dual function pay option via NFC (near field communication) or a QR code. That technology allows a driver to transact fuel payments through a smartphone.

ExxonMobil also teamed up with Fiserv to initiate gasoline payments through Alexa and Amazon Pay. For vehicles equipped with Alexa, drivers can give voice commands to select a gas station pump and authorize a payment. The “Alexa, pay for gas” program went live in September 2020. In addition, Android and iOS users can scan a QR code or tap their device to the Google Pay tag at ExxonMobil stations.

Challenges for Car IQ

The alliance with Car IQ Pay is a logical extension of this strategy. With Car IQ Pay, fleet members can connect their vehicle directly to the pump without needing a credit card, PIN number or vehicle odometer reading. As the Car IQ website describes, the payment app uses vehicle data to create a unique ID that connects directly to the merchant to initiate transactions. The Car IQ wallet adds vehicle data to the transaction, enabling merchants to provide real-time offers and personalized rewards for fleet operators and drivers.

Analysts say that while Car IQ has done a good job of expanding its network, it still has a long way to go to compete with major credit card issuers.

“In order to compete with the major providers, Car IQ will need to continue to expand its acceptance network,” said Ben Danner, Senior Analyst of Credit & Commercial at Javelin Strategy & Research. “Bringing on titans like ExxonMobil is a great addition and will give drivers the added flexibility of contactless payments with a big opportunity to reduce fraud and disputes. However, traditional fleet cards have significant rewards perks and rebates, which may be enough to keep fleets from ditching their plastic cards.” 

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The prevalence of contactless payments is on the rise, driven by convenience. A growing number of consumers prefer the ease of transactions without the need for physical cash or the potential risks associated with carrying credit cards. Cashless payments provide a practical solution for those who may have forgotten alternate payment methods and need to make a purchase on the go.

The surge in contactless payments gained even more momentum during the pandemic, where they were seen as a safer and more hygienic way to conduct transactions. The tap-to-pay method emerged as a preferred choice, contributing to a healthier environment for businesses, reducing the risk of spreading germs.

For businesses looking to prioritize safety and adapt to evolving consumer preferences, embracing the cashless trend is key. The benefits extend beyond quick-service establishments, with cashless transactions playing a significant role in sectors including healthcare, especially in streamlined payment processing. As we delve into this evolving financial landscape, it becomes clear that the shift towards contactless payments is not just a fleeting trend—it’s a transformative force shaping the way businesses operate and cater to evolving consumer needs.

How Do Contactless Payments Work?

Implementing a contactless system is fairly straightforward. Businesses require a system that integrates both radio frequency identification and near-field communication. Essentially, it involves upgrading the POS system to enable customers to tap their smartphone, tablet, watch, or card without the need for physical contact.

However, there are crucial considerations for businesses venturing into contactless payments. The process needs to be seamless, otherwise, customers may be hesitant to adopt it. A substantial portion of consumers—particularly younger generations—have moved away from carrying physical credit cards. Failing to offer options such as Apple Pay might result in missed business opportunities. What’s more, placing contactless payment options right at the point-of-sale is essential to streamlining the purchasing process and avoiding unnecessary complications for both the customer and the business.

Protecting customer data is also crucial when offering contactless payment options. The good news is that this type of data tends to be secure because it’s encrypted. But, to ease any cybersecurity worries, businesses need to make sure they have extra security measures in place—whether that’s leveraging AI technology, cloud-based systems, or ransomware mitigation.

A Rising Trend Across Multiple Industries

Although many associate the cashless trend primarily with retail, its application extends far beyond, making an impact across various sectors including travel and healthcare.

In the travel industry, the adoption of contactless payments offers airlines and hospitality businesses the ability to create seamless and stress-free experiences for their customers. Offering omnichannel payment services not only enhances customer experiences, but also takes the pressure off of staff when it comes to data and payment monitoring.

In healthcare, streamlined payment processes play a crucial role in promoting overall patient care. The rise of telehealth services, especially during the pandemic, has been a notable tech experience. Telehealth not only eases patient concerns but also addresses industry disparities, enabling individuals from underserved communities to access dental or medical consultations. However, managing payment options for telehealth patients requires careful consideration.

Healthcare facilities can implement a range of contactless payment options, including text payments, online payments, or utilizing a card on file that automates bill payments. By embracing contactless payments, healthcare providers empower individuals seeking medical care to concentrate on their health and well-being without the added stress of financial concerns.

It’s clear that contactless payments represent the future, offering a quick and user-friendly solution for all. Their continued benefits not only enhance customer experiences, but also position businesses at the forefront of the 21st century, potentially attracting a new target audience.

The post The Rise of Contactless Payments: How Businesses Can Adapt to the Cashless Trend appeared first on PaymentsJournal.

Did you ever imagine that you could pay for your subway and bus fare as quickly as for your morning cup of Joe or a new pair of shoes? When I started researching contactless and mobile payments for transit about a decade ago, it seemed like a distant reality. However, today, people can pay for public transit with contactless credit/debit cards, Apple Pay, and Google Pay in more than 500 cities worldwide.

Historically, transit riders could only pay for fares using transit cards, cash (exact change), paper tickets, and tokens. Commuters commonly worry about missing a bus or train while waiting in line to buy or reload a fare card, not having exact change, and not having enough cash to pay for a fare.

More U.S. and global transit operators are implementing contactless payment systems where customers can tap their credit and debit cards or mobile phones to pay fares like they would for other retail purchases. According to Visa’s Future of Mobility survey, 94% of transit riders expect public transit to offer open-loop, contactless payments.

Digital Payments Evolution

Last month, I visited Vancouver, BC, for the first time. As a tourist (and payments enthusiast), I was ecstatic to see that Translink accepts contactless payments. As I explored the city, I tapped my credit card to pay for bus and subway fares without having to calculate the distance or number of rides I would take in advance. I also did not have to worry about exchanging USD for CAD to pay for transit. I could tap to pay for my Tim Horton’s coffee, new John Fluevog shoes, and transit rides in the same way.  

Many transit systems also offer fare capping by setting a maximum limit on daily, weekly, or monthly fares. It has been well received by riders who appreciate the flexibility of not having to purchase passes ahead of time. Nearly half of riders (47%) said they would use public transit more often if rides were fare-capped, according to the Visa survey.

Some riders prefer using fare cards for budgeting purposes or to track their transit expenses. These customers can also tap to pay, as more transit agencies update their fare card systems. New York City’s MTA is introducing contactless OMNY card vending machines at select subway stations that will replace magnetic stripe MetroCards. Additionally, MTA riders can reload their OMNY cards online. Mobile wallet users can also save digital transit cards, such as Chicago’s Ventra, Portland’s Hop Fastpass, San Francisco’s Clipper, and Washington’s SmarTrip cards in Apple Pay and Google Pay.

However, for riders who want to pay with their credit or debit card and track how much they have spent, Google Pay will offer a new feature showing a customer’s ride history and how much they have saved from time-based fare caps. This new feature will begin rolling out later this year, initially available with Brighton and Hove Buses in the UK, with plans to bring this feature to more cities next year.

Digital technology is enhancing transit experiences for riders in cities worldwide with more convenient payment options, real-time information, and end-to-end trip planning features that help consumers optimize their journey to their final destination.

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Starting next week, commuters will be able to use MTA’s OMNY contactless payments system to travel to and from John F. Kennedy International Airport.

The OMNY “Tap and Go” readers will be installed at select gates in the Jamaica and Howard Beach stations, and travelers will be able to tap their phone, smartwatch, or contactless card to pay for the $8.25 fare.

According to New York Governor Kathy Hochul, this is the first step of the integration, and she expects more OMNY readers to be integrated into all fare gates by the end of next year.

“At the airports, our job is to provide a consistent, world-class customer experience for travelers from around the world,” said Kevin O’Toole, Port Authority of New York and New Jersey Chairman in a prepared statement. “Contactless readers offers travelers an intuitive, hassle-free fare payment option and will greatly improve the customer experience at AirTrain JFK.”

Janno Lieber, MTA Chair and CEO also added: “In September subway and bus customers tapped more than 2 million times on a single day, and now they’ll be able to use OMNY at the AirTrain JFK for much quicker passenger flow to and from the airport. Whether you’re headed to catch a plane or returning home to New York, AirTrain riders can now take full advantage of this time-saving and seamless way to travel in the city.”

Contactless Transit Systems

New York isn’t the only region that’s embraced contactless payment systems. In fact, riders in the U.S. can also use contactless payments with Chicago’s Ventra, Dallas’ DART or Portland’s TriMet.

Globally, transit systems in London, Japan, and South Korea—to name a few—have also embraced contactless payments in a move to offer riders convenience and choice in the way they pay.  

And more regions are modernizing their transit systems as well. Earlier this year, the Netherlands launched a contactless payment system, which works across its public trains, buses, and trams, letting riders pay seamlessly without worrying about purchasing different tickets or having to use different types of payment systems.

The post AirTrain JFK Will Soon Accept Contactless Payments appeared first on PaymentsJournal.

Amazon is doubling down on its Just Walk Out technology, with plans to expand to sport arenas in Toronto and Calgary.

The e-commerce giant hasn’t divulged when its stores will launch in Scotiabank Arena and Scotiabank Saddledome, though various reports say it may happen later this fall. Jon Jenkins, Vice President of Just Walk Out at AWS told Yahoo! Finance that the company plans to further expand its presence in Canada, beyond just sport arenas.

A Cashierless Experience

Similar to the experience at its other locations, soon sports fans will be able to head into an Amazon store and pick up the items they want. Each location is equipped with overhead cameras and sensors, which leverage computer vision, generative AI, and machine learning to monitor which items are picked up or placed back on the shelves.

Once they’re done shopping, the credit or debit card consumers used for entry will be charged automatically and they’ll get a receipt.  

Frictionless Shopping

Cashierless shopping continues to grow in popularity worldwide. And what’s not to like? Consumers appreciate the convenience it offers as it saves them time without having to wait in line. For merchants, it helps reduce theft as the newest innovations—such as computer vision—enable them to keep track of what items shoppers take off the shelves and what gets put back.

Earlier this year, we covered Japan’s venture into the world of biometrics with its self-service point-of-sale (POS) cash register that enables shoppers to pay using biometrics such as facial recognition. To use this service, consumers simply register by providing their facial image on a website that is connected to Yahoo! JapanID and PayPay account. Once consumers are ready to check out, they scan the barcode on their product, choose the “Face Recognition Payment” option, and look into the camera provided.

Overall, it’s an area Amazon is betting big on. The e-commerce giant has been making waves with its Amazon One technology, recently announcing a partnership with Whole Foods. Beginning with a select number of Whole Food locations in Colorado, customers can link their palm and payment card at a point-of-sale station or kiosk. Once registration is completed, the customer can check out with their items by scanning the palm of their hand over a scanner.

The company has also been working with Panera Bread and Starbucks on similar initiatives.

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Eastern Bank Ltd. (EBL), headquartered in Bangladesh, has introduced a suite of wearable payment devices branded as WEAREBL.

According to The Daily Star, the bank worked with Mastercard and Visa on the wearable devices, which include a ring, a phone holder, a wristband, and a compact portable fob sleeve. These devices will contain a near-field communication chip that will allow users to make contactless payments.

WEAREBL represents an exciting development in the fintech industry. By combining wearable technology with contactless payments, EBL is paving the way for a new era of financial transactions. Historically, contactless payments work long-term when the wearable technology it is tied to has functionality on its own. And it seems likely that WEAREBL will partner with other technology companies to create multipurpose devices in the future.

Are Wearables Making a Comeback?

Transacting via wearables isn’t anything new—let’s not forget Google Glass’ “Nod to Pay” feature, which was released in 2017. But this global trend towards contactless payments, particularly via a wearable device, can be attributed to the pandemic, as well as the popularity of devices such as Apple Watch. 

Wearable payment technology is a competitive market. Last year, more than 100 million people were reported wearing an Apple Watch, and Google’s Fitbit—which has a built-in NFC chip—had roughly 120 million registered users as of 2022. That’s a good target audience for many banks and financial institutions.

While these devices are used for a variety of reasons—monitoring steps, observing health patterns, paying for goods—it’s the latter that’s been getting a lot more focus lately, particularly because of convenience.

And many brands and financial institutions are looking to capitalize on the potential opportunities. For example, Lyle & Scott teamed up with Barclays to launch a contactless payment jacket powered by bPay, Barclay’s cashless payment system. The Contactless Jacket features an NFC chip that’s hidden in the cuff of the right sleeve, and allows customers to purchase items on the go in the UK.

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Google and Apple have enormous influence over how tap-to-pay technology and open banking develop over the long term, according to a recent report by the Consumer Financial Protection Bureau.

At the heart of the issue lies the dominance of Apple’s iOS and Google’s Android operating systems. As of the second quarter of 2023, Apple’s iOS was found on 55 percent of smartphones shipped in the United States, with Google’s Android on 45 percent. These tech giants effectively control the tap-to-pay market, regulating app developers’ access to the near-field communication (NFC) technology required to enable the transactions.

Apple goes a step further by forbidding third-party payment apps from accessing NFC, effectively monopolizing tap-to-pay through Apple Pay.

NFC technology plays a pivotal role in contactless payments through mobile devices. Its inclusion in mobile devices and payment terminals has driven the growth of tap-to-pay transactions. Financial services providers are eager to facilitate point-of-sale payments, but the stranglehold of Apple’s iOS restricts their access to NFC capabilities. This means widely used payment apps like PayPal and Cash App can’t rely on NFC technology, forcing consumers to use Apple Pay exclusively.

Although Google’s Android operating system currently allows third-party access to NFC capabilities, the CFPB warns that this could change given Google’s market position and relationships with hardware manufacturers.

These mobile device restrictions have far-reaching consequences. They inhibit choice and innovation in consumer payments, potentially hindering the growth of open banking. Lower-cost open-banking-powered payment innovations could also be at risk, making it harder for consumers to make POS transactions directly from their bank accounts. In a world striving for open ecosystems, these restrictions limit competition and interoperability.

“The CFPB joins the European Commission in taking issue with Apple’s ability to restrict access to NFC technology on iPhones for digital wallets,” said Daniel Keyes, Head of Merchant Services at Javelin Strategy & Research. “If Apple ever opened up access to iPhone’s NFC technology it would put Apple Pay’s competitors on more even footing with Apple’s mobile wallet, but Apple Pay’s years-long head start would likely enable it to remain popular and continue as the leading mobile wallet on iOS devices.”

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J.P. Morgan Payments has launched Tap to Pay on iPhone, enabling its U.S. merchant clients to accept contactless payments at the point-of-sale.

Sephora will be the first merchant to leverage the service.

“J.P. Morgan’s launch of Tap to Pay on iPhone brings software point-of-sale technology much closer to being widely available in the U.S.,” said Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research. “The technology, which enables merchants to accept contactless payments with just a standard smartphone, has been on the rise, and now that another leader in the payments acceptance space is rolling it out, it will only gain more momentum.”

“What’s particularly interesting about this announcement is that it’s launching with Sephora. SoftPOS technology has generally been associated with small- and medium-sized businesses because of its ability to lower costs, but beginning with Sephora shows that there should be interest in softPOS technology from merchants of all sizes,” he added.

The Allure of Contactless Payments

Apple first introduced Tap to Pay on iPhone last year, giving merchants more options at checkout, particularly if consumer prefer to pay via their iPhone or Apple Watch using Near-field Communication (NFC) technology.

Overall, contactless payments are one of the most preferred forms of payment among consumers. In fact, the number of U.S. Apple Pay users is expected to increase by 9 million between 2022 and 2026, according to data from Statista.

As evidenced by growing adoption within various sectors—including transit, retail, and hospitality—enabling and simplifying contactless payments will make a lasting impact for all involved. And J.P. Morgan is certainly thinking about the continued impact it can make on the space long-term.  

“Today’s announcement marks a critical moment in time for the evolution of our business. Enhancing the ability for consumers to pay with their preferred method of payment is part of our broader, customer-centric approach to simplify omnichannel payment acceptance for our merchant clients. As consumer payment needs continue to rapidly evolve, this is a significant demonstration of our ability to innovate at scale to support our merchant clients through this ongoing transformation,” said Takis Georgakopoulos, Global Head of Payments at J.P. Morgan in a prepared statement.

The post J.P. Morgan Launches Tap to Pay, Teams Up with Sephora appeared first on PaymentsJournal.

Commuters in the southeastern state of Victoria will be able to tap and pay for public transport using their mobile device or payment card.

The Commonwealth Bank of Australia (CBA), which was appointed by Victoria’s Department of Transport and Planning, will enable the transactions via its ticketing system. While a launch date has not been set just yet, once rolled out, residents and visitors will have the option to pay in a contactless manner.

“With the Victorian Government’s announcement of planned improvements to the myki system, Victorians, international and interstate visitors alike, will enjoy the simple, frictionless experience that contactless payments provide public transport users,” said Andrew Hinchliff, Group Executive Institutional Banking & Markets at CBA in a prepared statement.

“We are excited to work with the Department of Transport and Planning to bring contactless payments to the State. Public transport is an integral part of daily life for many Victorians, so we are proud to play a part in improving the commuter experience,” he said.

Contactless Transit Payments Are Gaining Momentum

Contactless payment adoption within the public transport landscape is becoming more widespread, particularly as more countries see the advantages of offering travelers a more seamless payments experience.

In a research study by Interac, 68% of Canadians said using contactless payments would make public transit quicker and more convenient. What’s more, a large share (83%) of respondents said they always have their bank card with them once they leave the house and roughly 67% of respondents said “they would be likely to pay for transit by tapping their debit or credit card, if the option was available.”

Major cities in the U.S., including New York, are making headway in adopting contactless payments for public transport. In fact, the Metropolitan Transportation Authority (MTA) of New York announced that there were one billion taps logged using its OMNY fare payment system as of August 1.

The Netherlands also launched a contactless payment system this year, which works across its public trains, buses, and trams, offering consumers that convenience they crave without having to worry about purchasing different tickets or having to use different types of payment systems.

“The new updates follow the trend of transit systems modernizing ticking options to ease entry with contactless payments,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “While the existing prepaid passes will still be a prominent feature, it also puts focus on the shift from repaid to postpaid, especially for the occasional rider.”

The post CBA to Transform Commuting with Contactless Transit Payments   appeared first on PaymentsJournal.

CPI Card Group recently announced that it is adding a contactless tungsten card to its encased metal card portfolio. The tungsten card is a weighty card at approximately four times that of a standard plastic card, which provides a tactile feel. The card is functionally considered to be dual-interface, allowing cardholders to swipe, dip, and tap to pay. 

Metal cards add a luxury feel to the card and are typically found in premium card products like the American Express Platinum, Chase Sapphire Reserve, and Capital One Venture X cards. As brands seek new ways to attract consumers, metal solutions offer a way to differentiate the card portfolio and generate loyalty.

The addition of dual-interface gives consumers more ways to pay, and dovetails with trends in contactless card payments that accelerated over the pandemic¹. Credit card products have been historically the leaders in tap-to-pay functionality but issuers are now starting to convert debit card portfolios into dual-interface. Javelin Strategy & Research found that last year, 57% of consumers owned one or more debit cards that had a tap-to-pay feature as compared to 59% of credit cards. Tap-to-pay isn’t just for premium credit cards anymore. 

I personally own a metal credit card, and there is something about its rigidity and weight that makes it feel like a premium product. There is also something satisfying about the audible clank when I put my card on the POS to initiate a contactless payment.

The post CPI Launches a New Contactless Encased Tungsten Card Product appeared first on PaymentsJournal.

For commuters and visitors, taking public transit often requires waiting in long lines to purchase tickets and reload cards, deciphering different fare types, and navigating the transit system itself. More transit operators around the world are rolling out new contactless fare payment systems, making it easier and more convenient for riders to tap their credit or debit card or mobile phone to pay. According to Visa’s 2022 Future Of Urban mobility survey, 91% of public transport users worldwide expect transit services to offer contactless fare payment options, and 45% prefer to make contactless payments for their transit fares.

Transport for London (TfL) was one of the first transit systems to accept contactless payments over a decade ago. Today, contactless payments make up 71% of all pay as you go trips on buses, Tube and rail services in and around London, and 25% of taps are made using a mobile device.

New York’s Metropolitan Transportation Authority (MTA) reported that its contactless OMNY fare payment system had been tapped more than one billion times by customers last week. OMNY was rolled out across the entire MTA system in 2020, comprising 472 subway stations, 204 local bus routes, and 31 express bus routes. Nearly half of all subway ride are bought with Apple Pay, Google Pay, or a tap of a credit/debit card, with 2 million riders tapping daily.

Riders can also use contactless payments with Chicago’s Ventra, Dallas’ DART, Portland’s TriMet, and several other U.S. transit systems. Many global cities worked with Visa, Mastercard, and transit technology firms, such as Cubic and Masabi, to launch new contactless fare payment systems recently, including Mexico City, Lisbon, and Venice.   

In addition to contactless payments, some transit agencies are exploring other new payment technology. Jacksonville Transportation Authority customers can now use Cash App to purchase tickets on the MyJTA mobile app. South Korea’s Seoul Metro is testing a “tagless” fare payment system using Bluetooth Low Energy (BLE) technology and mobile sensor devices to automatically charge a fare to payment card stored on a rider’s smartphone. It enables Seoul Metro riders to pay for their tickets by walking through a fare gate without tapping a card or device. Similarly, Genoa’s Azienda Mobilità e Trasport (AMT) launched a hands-free Bluetooth ticketing feature with its GoGoGe app that allows users to pay for their trips without having to take their devices out of their pocket or bag.  

Contactless and other digital payments improve efficiency and cost savings for transit operators and customers. Transit agencies reduce costs associated with maintaining ticket vending machines, printing fare media, and cash handling. More important, contactless payments help drive increased transit ridership. Transit customers especially like fare capping that many contactless fare payment systems offer. Fare capping limits how much a rider pays for their total rides in a day, week, or month. Visa’s survey found that 61% of transit users would be encouraged to use transit services more frequently if fare capping was offered. For commuters, it eliminates the need to tie up funds on a monthly pass, and for new riders, it can speed up the boarding process by reducing confusion over how to pay.

The post New Payment Technologies Drive Growth in Global Transit Ridership appeared first on PaymentsJournal.

In the UK, there’s been a growing preference for contactless payments over cash. According to a recent survey from takepayments, which polled more than 1,000 UK residents, nearly half of respondents (48%) said they preferred contactless card payments—more so than cash (17%) and and Chip & PIN transactions (11%).

Mobile payments, such as Apple Pay and PayPal, edged out cash, with 20% of respondents opting for these convenient alternatives.

The dominance of contactless payments in the UK reflects a growing trend that’s taking place worldwide. Not surprisingly, younger consumers are spearheading this change in behavior, leaning on mobile payments to pay for their purchases. Older consumers, however, are more likely to still hold onto their physical wallets and pay via cash.  

All About Convenience

Contactless payments offer unparalleled convenience. Indeed, 88% of respondents in the takepayments study cited contactless payments to be “the most convenient option.” What’s more, the ease of tapping a card or phone eliminates the need to carry cash, and that’s primarily why  31% of respondents said they never carry cash.

That’s not to say that cash is going away. Many consumers are still clinging to cash for its perceived security and budgeting advantages. When asked why they choose to use cash over other payment methods, more than half (53%) of those polled said they find cash to be the most secure option, and nearly as many respondents (52%) said it helps them stick to a budget.

Interestingly, the survey revealed a gender gap in payment preferences. Men were 22% less likely than women to prefer contactless payments. And out of the various regions in the UK the survey looked at, London ranked low on the contactless preference list.

Payment Method of Choice

For businesses, accommodating cashless transactions is becoming essential to attracting and retaining customers. Only 47% of survey respondents said they were willing to shop at cash-only businesses, with 13% admitting they would avoid these establishments altogether.

The key takeaway for businesses is clear: embracing contactless payments and card solutions is crucial to staying competitive. As more businesses and consumers embrace this new way of paying, the contactless trend shows no signs of slowing down, firmly establishing itself as the preferred payment method in the UK.

The post Contactless Payments Are Taking Center Stage in the UK appeared first on PaymentsJournal.

The Metropolitan Transportation Authority (MTA) reported that its contactless OMNY fare payment system had been tapped more than one billion times by customers, according to Gothamist.

This marks a significant shift in the way New Yorkers access public transportation and showcases the growing popularity of contactless payment systems. Nearly half of all subway riders—two million riders a day—use the system.

As of 2020, OMNY was rolled out across all NYC stations. To put this even further in perspective, it’s now available across 472 subway stations, 204 local bus routes, and 31 express bus routes. Its seamless integration and ease of use has undoubtedly contributed to its success.

“The implementation of programs like OMNY highlight the changing nature of transit payments,” said Jordan Hirschfield, Head of Prepaid at Javelin Strategy & Research. “The days of solely depending on either token purchases or use of stored-value transit cards will be merged into a singular experience where a rider can just tap a device, that may or may not have an account balance, or even just tap their payment card and go.”

The rising popularity of OMNY reflects a broader global trend in favor of contactless payment systems. Worldwide, there has been an accelerating shift towards cashless transactions. As a result of the COVID-19 pandemic, many individuals have become increasingly conscious of hygiene practices and have embraced touch-free payment methods to reduce physical contact with surfaces.

By eliminating the need for physical tickets or cards, public transport agencies can reduce costs associated with printing and maintenance, as well reducing boarding times.

Attracting people to use public transit involves making it a pleasant experience. Part of Uber’s success has been making its interface simple and easy to use. Public transit advocates would be wise to take a leaf out of their book. Improving the payments infrastructure is a small step that may increase, or at least retain, buy-in to public transit.

The post NYC’s OMNY Contactless Payment System Logs a Billion Taps appeared first on PaymentsJournal.

Paying for groceries via biometrics may soon be much more mainstream, as Amazon installs its Amazon One palm payment technology throughout all of its Whole Food stores. The e-commerce giant plans to execute the effort by the end of the year.

With Amazon One, customers can pay for their goods by hovering their palm over an Amazon One device, rendering wallets and phones unnecessary. Palm recognition offers a unique advantage over traditional credit cards and passwords, as the palm signature cannot be replicated, ensuring enhanced identity matching.

The rapid expansion of Amazon One highlights a growing demand for seamless and secure payment options. Based on the millions of transactions that have been already processed with Amazon One, demand is certainly there.

Biometrics as a Service

Currently, Amazon One has been implemented in 400 various retail locations in the United States. Companies such as Panera Bread are using Amazon One’s loyalty linking capability, providing customers with personalized experiences and streamlined payment processes. At Coors Field, home of the Colorado Rockies MLB team, Amazon One’s age verification feature allows adult consumers to purchase alcoholic beverages. Travel retailers and sports venues are also on board, recognizing the benefits of palm payment in busy environments.

As demand for contactless, secure, and convenient payment methods grows, Amazon has positioned itself at the forefront of this trend, presenting an alluring proposition to both retailers and consumers.  

That said, contactless payments may not be for everyone, As evidenced by Amazon’s pilot program in Starbucks a few months ago. Amazon picked a very specific location in Seattle to trial the program and found that most consumers who frequented that location—the average customer was roughly 45-years-old—didn’t quite take to the technology.

Reactions were understandably mixed since this new way to pay requires more of a learning curve—and Amazon is essentially asking consumers to change their behavior. It’s too soon to tell what adoption may look like, but as long as the technology gives consumers more convenience, a learning curve may be something they’ll be fine to accept.

The post Amazon Is Bringing its Pay-by-Palm Technology to All Whole Foods Stores appeared first on PaymentsJournal.

According to a 2022 Visa Consumer Payment Attitudes study, which looked at cashless habits within Southeast Asia, digital payments have become a preferred payment method of choice among consumers in Malaysia, with seven out of 10 Malaysian consumers now actively using contactless card payments—a substantial increase from the 56% of consumers who used it a year prior.

The data, which was recently highlighted in The Star, demonstrates a remarkable surge in the adoption of contactless payment systems among consumers in Malaysia, with more than 90% of the population saying they’re familiar with the technology.

Visa’s Malaysia country manager, Ng Kong Boon, hailed Malaysia as one of the most developed contactless payment markets in the Asia-Pacific region, with eight out of 10 Visa transactions being contactless. Boon further noted that contactless payments have experienced remarkable growth in recent years, particularly during the COVID-19 pandemic. For context, only three in 10 Visa transactions were contactless in 2019, illustrating the rapid pace of adoption among Malaysian consumers.

The Visa study, which surveyed 1,000 Malaysians ages 18 to 65, also found that 92% of respondents have used credit or debit card payments, and more than three-quarters have attempted to adopt a cashless lifestyle, with 67% saying they’ve tried to go completely cashless for a few days.

Over the years, the shift to contactless payments has become more prevalent worldwide, with attempts to go cashless particularly higher among younger consumers. According to Visa’s research, Malaysia will become a predominantly cashless society by 2030, with a majority of consumers relying on cashless methods for their daily transactions.

The shift that we’re seeing towards contactless payments reflects broader global trends in the finance, fintech, and tech sectors. The pandemic has accelerated the adoption of cashless transactions worldwide, with consumers prioritizing safety, convenience, and hygiene. The increasing penetration of smartphones and the proliferation of digital wallets have also made cashless payments more accessible and user-friendly.

But it’s important to note that while significant strides have been made—and we continue to explore the future of cashless payments—there’s still a ways to go before we can expect a fully cashless society.

The post Malaysia Emerges as a Leading Contactless Payment Market in Asia appeared first on PaymentsJournal.

PayPal has introduced its Tap to Pay for Venmo and PayPal Zettle businesses in the U.S., enabling small businesses to accept contactless payments, including credit cards and digital wallets, directly through their mobile devices. This innovation eliminates the need for additional hardware or upfront costs, making it easier for businesses to integrate modern payment methods into their operations.

Growing Usage of Contactless Payments

Nearly 80% of consumers have used contactless payments for purchases, according to PayPal. However, small businesses previously needed to invest in point-of-sale systems and manage card readers to meet this growing consumer demand.

Empowering In-Person Card Payments

Tap to Pay for Venmo and PayPal Zettle represents a significant step in democratizing in-person card payments, allowing businesses to accept payments swiftly, without setup costs. This technology provides access to millions of businesses using Venmo and PayPal Zettle, helping them boost sales through seamless payment options.

Competing in the Contactless Payment Market

This development strengthens PayPal and Venmo’s position against competitors like Square and Stripe, which have led the market in mobile payment solutions for small businesses. Traditional players such as Visa and Mastercard have also introduced their contactless payment technologies to keep up with this growing trend.

Pandemic-Driven Shift Towards Contactless Payments

The COVID-19 pandemic has accelerated the adoption of contactless payments as businesses and consumers sought to reduce physical contact. As a result, contactless payment methods, including Venmo payments, have become more prevalent, with continued growth in adoption.

Converging Mobile Payment Features

The ability to manage a Venmo balance and card payments within a single platform underscores the increasing convergence of mobile payment apps. This trend reflects the rise of “super apps” that offer various financial services, including checking accounts, debit cards, and credit cards, beyond just payments. Users can transfer money, send money, and receive money seamlessly through the Venmo app.

Enhancing Financial Services on One Platform

Incorporating features like instant transfer (subject to credit approval), PayPal Cashback Mastercard, and a robust rewards program (terms and exclusions apply), PayPal and Venmo are enhancing their platforms to meet diverse user needs. This consolidation aligns with the broader industry trend of offering comprehensive financial services within a single, user-friendly app.

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The NFC Forum, the governing body that promotes the use of near field communication technology, is letting customers initiate contactless transactions with their NFC-enabled smartphone from a distance of 3-4 cm. The boost, previously at 2cm as per the current standard, will enable the technology to be more user-friendly. 

According to a Digital Transactions article, NFC Forum’s decision comes at the heels of Mastercard’s latest research, which revealed that more than 50% of U.S. consumers are using their mobile phones and contactless cards to make in-store purchases.  

Contactless payments are no longer a passing trend, as their notable use can also be attributed to making payments faster and easier than swiping cards.  

In a presentation for Contactless World Congress, NFC Forum Executive Director Mike McCamon said that the expansion of the NFC Transaction range “will make the technology more useful and more user friendly and actually will make the experience seem faster as well.” 

“The idea is that, as your phone comes in contact or close proximity of the payment terminal, the connection could start and then also complete the transaction much quicker. And also you won’t have to be as precise,” he added. “All of us have had this experience of taking our phone and kind of moving it around trying to find the right sweet spot on the terminal. The idea is with your increased range, you’d be able to not have to do that.” 

NFC’s Technology Roadmap 

The increased transaction range is only one of the many new features within NFC Forum’s technology roadmap over the next five years. It also includes the addition of support for multiple purpose tags, the modernization of device-to-device communication, expanded data sharing options, and more power for wireless charging.  

With more consumers demanding a more frictionless payments experience, it’s no wonder that the use of contactless payment methods such as mobile wallets is growing. This is especially true among the younger demographic of consumers.  

The post NFC Forum Aims to Make Contactless Transactions Easier  appeared first on PaymentsJournal.

Transporation companies in the Netherlands have collaborated with Dutch public transport system developer Translink and Mastercard to establish OVpay, a payment system for public transport, which facilitates contactless payments on all modes of public transport, including metros, buses, trains, and trams.  

Commuters in the region can now use multiple modes of transportation without needing to buy separate tickets or use different payment systems. They can tap to pay using their credit card, debit card, or digital wallet on all public transport throughout the country. 

According to Mastercard’s Jan-Willlem van der Schoot, The Netherlands is the first country in the world to enable checking in with a credit or debit card in public transport available nationwide. “We see that many people face hurdles when wanting to take public transport,” he said in a prepared statement. “From now on, there is no need to separately buy tickets or miss your train because the balance on your public transport card is too low. This has been an amazing team effort.”   

Contactless Payments Are on the Rise 

The use of contactless payments has impacted many sectors, and growth and adoption has particularly been prominent within the transport industry.   

There’s no doubt that the pandemic has accelerated adoption of contactless payments on public transport ,and major cities—including New York—have been making strides to elveate the payments experience on public transport.    

What’s more, a survey conducted last year found that commuters in Canada would be more likely to take public transportation if they were able to pay in a contactless manner. And even across the globe, more countries are seeing the advantages of giving consumers the option to pay for public transport—whether that’s with their credit or debit cards or just traditional tokens. contactless payments. Earlier this year, Malaysia’s Ministry of Transportation enabled travelers to make digital payments for their public transportation systems.  

Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research highlighted the importance of meeting riders at their preferred points of payments in his report, “Return To Office Doesn’t Equal Return to Patterns in Prepaid Transit,” He also covered how the future of mass transit can be massively improved by not only investing heavily in enhancing its current infrastructure, but its technology as well by reducing or eliminating cash payments, thereby elevating the customer experience.  

“The move by Tran slink represents a growing trend in transit, modernizing systems to meet riders at their preferred points of payments,” he said. “While the move may reduce uses of prepaid transit passes in favor of alternatives, it opens access to more travelers including infrequent participants that seek to pay on an as needed basis.” 

The post The Netherlands Is Supporting Contactless Payments on Public Transport  appeared first on PaymentsJournal.

More people are using debit cards, bank transfers, and cryptocurrency to pay for goods than ever before. In 2021 alone, there were $989 billion of non-cash transactions, while future estimates predict that $2 trillion of cashless payments will take place every year by 2026.

However, the future of cashless payments is still a little murky. A future without cash would impact individuals without bank accounts and many consumers are concerned about the ethics of shared e-commerce data.  

That said, the benefits of cashless payments still vastly outweigh the drawbacks. Consumers who embrace cashless payments can manage their money and businesses can use social commerce to bolster their revenue and reduce their operational costs.

Cashless Payments Trends

Cash is still king, but non-cash payments like contactless cards and peer-to-peer payments (P2P) are steadily gaining popularity. This trend is likely driven by young consumers, who feel more comfortable navigating a cashless world. A recent Pew Research Center survey even found that only 45% of Americans aged 18 – 45 “try to have cash on hand”, compared to 71% of those aged 50+.

Pew Research Center surveys also found that less affluent Americans are far more likely to be reliant on cash than their wealthier peers. 30% of households with an income below $30,000 say they use cash for “all or almost all” purchases, while only 6% of households with income about $50,000 use cash today.

A widespread increase in digital and social commerce will drive the future of non-cash payments, too. Social commerce is a subsector of e-commerce that has been on the rise in recent years due to the increased popularity of social media channels like TikTok and Instagram. Online consumer-to-business (C2B) transactions can help consumers use their connected bank account and innately enhance the consumer journey.

The Benefits of Cashless Payments

Going cashless is good news for those of us who struggle with mental arithmetic. Financial tech (fintech) like contactless card payments is extremely convenient, too. Removing the need to visit the bank for cash withdrawals frees up time and may encourage greater consumer spending.

Small to medium businesses (SMBs) can also reap the rewards of cashless payments. The benefits of going cashless as an SMB include:

• Increased Revenue: Cashless transactions will dominate the payment industry in the future. SMBs that embrace cashless can enjoy increased customer retention which, in turn, bolsters revenue.
• Speed: Consumers don’t want to wait in line to make their purchases. Queue times can be slashed by installing cashless devices that complete the transaction process in moments rather than minutes.
• Lower Operating Costs: Storing and transporting cash is costly. Cashless SMBs can save the money they would spend on armored couriers and reinvest profits to support growth.
• Account Accuracy: Non-cash payments remove the risk of human error. SMBs that utilize cashless payment can usually find accounting software that integrates with their payment portals, too.

Going cashless is great for businesses. Quicker transactions improve the customer experience and may translate into increased sales volumes.

Carrying around less cash can improve security, too. Coins and notes can be lost, stolen, or counterfeited. Cashless payment systems, however, are usually encrypted and can be easily tracked to improve security.

Challenges and Solutions 

Businesses and financial institutions are gearing up for a cashless future. However, before we turn our back on nickels and dimes, it’s worth considering the drawbacks of a cashless society.

Going cashless puts vulnerable people at risk. That’s why cities some cities and states have introduced legislation to prohibit cashless businesses.  The argument behind proposals like these is that folks who do not have access to a bank account are still able to buy goods and procure services just like everyone else. This is particularly important for folks with lower incomes, who may struggle to keep up with credit card payments and feel disenfranchised by the move towards a cashless future.

Going cashless may exacerbate some financial cybersecurity concerns, too. In an entirely cashless enterprise, malicious actors may be able to gain access to private data and expose personal financial information This is a real concern for people who bank online, as “open finance” features give authorized users a 360-degree view of their banking details. If a person’s banking details are stolen, their entire life savings may be at risk.

Fortunately, the future of cashless payments is evolving in response to these challenges. Today, many financial institutions have embraced a “zero trust” approach to their cybersecurity ecosystem. This minimizes the risk of malicious actors gaining access to accounts and firms up data protection efforts.

Conclusion

Cashless payments are on the rise. Going cashless is convenient, secure, and time-efficient for businesses and consumers alike. However, companies and government agencies need to respond to the rise of social commerce and contactless transactions. Advancements in cybersecurity are needed to keep personal data safe, and more pro-cash legislation may be necessary to ensure everyone can still pay for basic goods and services.

The post Exploring The Future of Cashless Payments appeared first on PaymentsJournal.

Amazon has added age verification capability to Amazon One—its palm-based identity service—after seeing that consumers were hitting a snag when it came to producing a government-issued ID to complete their purchase. 

To make sure they’re ready at checkout, consumers can visit Amazon One’s website, and upload the front and back photos of their government-issued ID, as well as a selfie, to verify their identity. Consumers who aren’t enrolled on the Amazon One platform can do so by pre-enrolling online or at kiosks where Amazon One is offered. 

“Accounting for age-restricted goods like alcohol is an important step for Amazon One and any similar payment technologies,” said Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research. 

“Amazon One offers consumers a convenient and fast checkout option, but if consumers can’t use it consistently, like when they want to purchase alcohol, they can’t rely on it for all of their purchases. That will potentially lead them to use it less often. Uploading an ID initially does create friction and some consumers won’t follow through on the process, but it is a one-time issue that many consumers will likely accept in order to use Amazon One more consistently.” 

Verify to Pay

With this new feature, Amazon has confirmed that Amazon One does not store government-issued IDs, but rather, they’re verified by an ISO 27001-cerfified identity verification provider.  

Coors Field, home of the Colorado Rockies Major League Baseball team, will be the first site offering Amazon One’s age verification capability. 

“Hearing from Amazon One customers across the country, we understand that they love the convenience it delivers: shorter wait times, quick access to buildings and locations, being able to link their loyalty memberships, and now an easy way to grab their beer,” said John McKay Senior Director, Food Service Operations and Development, Colorado Rockies, in a prepared statement. 

At the venue, consumers can place their palm over an Amazon One device and the bartender will be able to verify their age by seeing both the “21+” message, along with the selfie the customer loaded on the screen. After the verification process, consumers place their palm over the Amazon One device to complete the purchase. 

Amazon first introduced its palm payment feature in 2020 in an effort to enhance the customer shopping experience. We previously covered Amazon One’s foray into Whole Foods Market in 11 locations in Colorado. Furthering the acceleration of both contacts and biometric payments, Amazon One has also been piloted at Starbucks in Seattle and in Panera Bread.   

The post Amazon Enables Alcohol Purchases via Palm Payments appeared first on PaymentsJournal.

From large retailers to market stall holders, businesses of all sizes in Australia can now accept in-person contactless payments via Apple’s Tap to Pay on iPhone. 

Contactless payments are becoming more widespread in Australia. From supermarkets to public transport, contactless payment systems are becoming more common, providing a quick and easy way to make transactions without the need for physical contact. This latest effort from Apple better equips businesses in the region by giving them the ability to accept Apple Pay, contactless debit and credit cards, and other digital wallets, by just using their iPhone and a partner-enabled iOS app—without the need for any payment terminals or additional hardware.  

Tap to Pay can be enabled via a supporting iOS app on an iPhone X—or any newer mode— running on iOS 16.4 or later. Once it has been enabled, merchants must instruct customers to position their iPhone or Apple Watch to pay with Apple Pay, their contactless debit or credit card, or digital wallet close to the merchant’s device. The payment will then be processed with NFC technology. The Tap to Pay function will also support PIN entry. 

“Australia is a nation of entrepreneurs and innovators, and small and medium-sized businesses are at the heart of the country’s workforce, employing millions of Australians. Now, with Tap to Pay on iPhone it’s easier than ever for businesses of any size to seamlessly accept contactless payments using only their iPhone, wherever they do business,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, in a prepared statement.  

“The convenience of Tap to Pay on iPhone empowers Australian businesses to offer easy, secure, and private contactless payment experiences to their customers, and help them run and grow their business,” she added.  

Contactless payments have surged since the pandemic and have become a preferred payment method, especially among younger demographics. As it continues to grow in popularity worldwide, it may very well become the standard payment method. 

The post Apple Launches Tap to Pay in Australia  appeared first on PaymentsJournal.

Gen Z, Millennials, and Gen X prefer frictionless experiences in all areas of their lives and have embraced contactless payments. Baby Boomers also prefer this payment method in many circumstances, but are often bamboozled by a lack of standardization in contactless payment technology.

Unlike credit card terminals, contactless payment experiences are not as standardized, which creates friction and confusion. And as merchants continue to elevate the consumer experience, and meet their customers where and how they want, they’ll need to prioritize accepting payment methods such as Apple Pay and Google Pay—ensuring their use in-store is as frictionless as possible.

During a recent PaymentsJournal podcast, Suresh Dakshina, Co-Founder of Chargeback Gurus, and Daniel Keyes, Senior Analyst of Merchant Services at Javelin Strategy & Research, discussed how the pandemic pushed more consumers to try contactless payments, as well as the security benefits they present for consumers and merchants.

How Contactless Payments Work

Contactless payments are a popular way to make purchases without physically touching a card or exchanging cash. There are several ways to make a contactless payment, among them tapping a card, scanning a QR code, and using a mobile device to access digital wallets, such as Apple Pay or Google Pay.

Although contactless payments have been around for a while, the pandemic accelerated adoption as many consumers avoided touching payment terminals. “Contactless payments became even more prevalent during the pandemic and transactions really skyrocketed,” Dakshina said. “Now, it’s become a way of life.”

Keyes agreed that the pandemic sped up the inevitable.

“Just before the pandemic, contactless payments were starting to gain a little bit of steam in the U.S., but they were not as popular as overseas,” Keyes said. “People didn’t want to change how they were paying because they were very set in their ways. I remember thinking and writing at the time that something significant would need to happen to drive adoption. The pandemic did that because it forced people to consider this option that’s convenient.”

Security and Comfort Drive Adoption

As with any payment method, security is of the most importance. With contactless payments—unlike swiping a card or entering a card number at a payment terminal—merchants don’t see a credit card number, and the transaction details are encrypted. This reduces fraud significantly in retail stores, especially from practices like card skimming.

“Contactless payments are truly secure because the data on the credit card is transmitted through encryption,” Dakshina said. “And that is the maximum protection you can have. It’s very challenging to hack a contactless payment.”

Although merchants are aware of how secure contactless payments are, there may still be some uncertainty among consumers. “People feel like someone could hack into your phone if you’re using a mobile wallet,” Keyes said. “But it’s still extremely safe. There’s room for education there.”

Among younger consumers, mobile wallet adoption is reaching a point where a significant percentage are using digital wallets exclusively and refuse to carry credit cards.

“I saw a person who walked into a smoothie shop asking the store owner if they accept Apple Pay. The owner said no, and the customer said, ‘I don’t have a credit card. If you don’t accept Apple Pay, then I cannot do business with you.’ There’s a large volume of consumers who do not want to carry credit cards and want to use a digital wallet to pay for their transactions. Businesses, especially retail stores, can capitalize on this younger generation who embrace cardless payments,” Dakshina said.

What’s more, merchants have an additional financial incentive to accept contactless payments.  

“Contactless payments are considered a card-present transaction and provide security to the merchant as the liability falls on the issuer in the case of fraud disputes,” Dakshina said.  

Keyes noted older consumers may be intimidated by the inconsistency of contactless payment experiences across various physical stores.

“If you swipe your credit card, it’s pretty much the same experience every time, even if you use a chip,” Keyes said. “But when you’re tapping [to pay], there are a lot of different terminals, which have different readers, and you’re not sure what you’re tapping especially if it’s a phone vs. a card.”

But, as older consumers consistently pay this way, any intimidation they may have initially felt with contactless payments will decrease.

Trends In Contactless Payments Among Young People

Younger consumers flock to frictionless experiences, where they have fewer steps to get what they want, Dakshina noted. And they want seamless experiences in all facets of their life.

“I have seen apartment complexes that target younger consumers. Their apartments are accessible exclusively by keypads instead of traditional keys,” Dakshina said. “The younger generation doesn’t want keys because they might lose the key and it [creates] friction. The world is starting to adapt to the needs of the younger crowd, which oftentimes goes untapped.”

Traditionally, merchants don’t target younger consumers—at least not right away. But this group has a great deal of spending power, and those in it expect merchants to meet them where they are and accept the payment methods they prefer.

“Merchants [need] to adapt to these technologies, because this is the crowd they want to attract, the ones going into the workforce,” Dakshina said. “They’re the ones who are very open to spending money on things they like.”

According to Keyes, merchants should prioritize mobile wallet acceptance. “Accepting Apple Pay and Google Pay is a good baseline,” he said. “The next step is making it clear that you accept those payment types and making it easy to use them in-store.”  

Contactless Payments Catching on Throughout the World

The adoption of contactless payments is increasing worldwide, though use cases vary depending on where you look. For example, China and Europe have advanced in simplifying the checkout process by using mobile wallets that allow users to add items to their cart and pay through their phones before leaving the store.

India is also moving toward a cashless society, with more people using mobile payment apps instead of credit cards or cash.

“In India, more people are sending payments through peer-to-peer apps,” Dakshina said. “In our office, the younger crowd does not carry credit cards since they use mobile wallets for their transactions. They don’t carry cash anymore. Even a street vendor accepts contactless payments.”

The United States, by contrast, has been slower to adapt—though that’s changing.

Keyes noted that more sophisticated point-of-sale technology will ease the transition.

“Eventually every merchant in the U.S. will accept contactless payments soon,” he said. “For small businesses that don’t want to invest in any large terminal product, this will keep costs low.”

“Contactless is only going to get more popular. It may become the default and even the exclusive option at certain merchants, just like how some places used to only accept cash and not credit cards.”

Dakshina agreed and said contactless payments will see continued growth in the U.S.

“Payments are the lifeline for any merchant, and you have to make it seamless for your customers to do business with you,” he said. “Less friction in your customer experience always leads to more revenue.”

Find out how EMV will simplify contactless payment acceptance.

The post The Importance of Enabling and Simplifying Contactless Payments appeared first on PaymentsJournal.

The prospect of paying for public transport in Dublin using contactless payments has been pushed back due to outdated ticketing systems, according to the Irish Times.

Anne Graham, the Chief Executive of the National Transport Authority (NTA), said that the launch of a contactless payment system is still “years away” and new equipment—including a modern ticketing system—will need to replace the current system used by the Dublin Bus and other transport services.

Graham noted that the NTA is trying out contactless payments on a few Local Link rural services. Local Link’s ticketing equipment is more modern and capable of processing contactless payments. The NTA is also currently in the middle of procurement to find a contractor who can develop a system for contactless cards, but Graham said it would require new infrastructure and IT systems, which would take some time to implement.

The delay in contactless payments reflects how digital payment system adoption can be slowed down by outdated infrastructure. The implementation of contactless payment systems has been successfully rolled out in London since 2012, with other cities in Europe also adopting the technology. However, the challenges faced by Dublin highlight the need for significant investment in infrastructure and IT systems.

With the rise of digital payments, there is an increasing demand for convenience, speed, and security in payment transactions. People are looking for seamless payment experiences across all areas of their lives, including public transport. Delayed implementation of contactless payments in public transport means that Ireland risks falling behind the rest of the world in adopting innovative payment technologies.

The post Outdated Ticketing Systems Delay Rollout of Contactless Payments in Dublin appeared first on PaymentsJournal.

Consumers are used to tapping their card to make payments. The problem is, not all merchants can afford the onboarding and maintenance fees of legacy point of sale (POS) systems. This is a notable obstacle, especially because the pandemic accelerated digitalization, leading to a surge in contactless payments. The volume of these transactions is expected to expand rapidly from 195 billion in 2022 to 408 billion by 2027. Merchants across a host of verticals, including traditional retailers, public transport operators, the hospitality industry and more, must find a reliable, secure, yet affordable solution.

SoftPOS (Software Point of Sale) solutions transform a regular smartphone—also referred to as Commercial Off-The-Shelf (COTS) device—into a contactless payment terminal. This makes it easy and affordable for merchants to accept digital payments, opening up new markets and new customers. As a result, the number of merchants deploying SoftPOS solutions is predicted to grow by nearly 500% between 2022 and 2027. As merchants prepare to embrace the technology, let’s explore what the future of SoftPOS looks like.

Embracing the Opportunity

There are already 5.3 billion mobile phone users worldwide. These devices are now an essential part of daily life. Merchants can easily obtain a COTS device—or expand the use of the one they already own—and transform it into one that is able to accept digital payments. This allows them to bypass some of the costs that come with traditional POS systems.

It isn’t just small and medium-sized merchants that can use SoftPOS to enhance their digital payment networks. SoftPOS can also be used as an accompanying solution. For example, if a standard POS terminal fails, the SoftPOS solution can be used while waiting for a replacement.

Additionally, the flexibility of SoftPOS can greatly enhance the checkout experience. As COTS devices are relatively inexpensive, they can be issued to more staff, giving customers more options for where to pay. In retail, assistants can carry SoftPOS devices with them, allowing customers to pay for products on the shop floor. In hospitality, restaurant staff can use the devices already issued to digitally send orders to the central POS system to take payments. Likewise, within the transport industry, ticket collectors can collect fares on-board, eliminating the need for consumers to queue at ticket machines. By giving more options for where customers can pay, merchants can significantly reduce congestion around traditional checkouts by removing the need for all customers to pass through them.

In the future, SoftPOS could potentially also simplify the online and in-app payment experience. In this use case, it’s planned that the consumer would be able to simply tap their card on the back of their smartphone when they reach the checkout in their online payment journey. This could mean no more entering card details or storing them with retailers.

However, as more use cases for SoftPOS emerge, stakeholders must be mindful of some of the risks that still must be addressed.

Implications of Certification for SoftPOS

SoftPOS environments can make it difficult to secure payments as they frequently lack the hardware security features found in conventional POS devices. And with a new PCI SSC certification released in Nov. 2022, compliance is more important than ever.

Mobile payments on COTS (MPoC) is a new mobile standard relying on existing PCI standards to support the future evolution of mobile payments. This update means that COTS terminals will be able to support both PIN and PINless transactions, offline transactions, and manual card data entry. It also helps SoftPOS devices accept both contactless NFC transactions and transactions that utilize an external chip or magnetic stripe card reader.

This will also allow the components of SoftPOS solutions to be tested individually, before being tested together as the full solution. By standardizing approaches to security evaluation, this is making the certification process clearer and easier to manage, helping solution providers reduce both development costs and time to market while prioritizing security.

Looking Ahead

The number of merchants deploying SoftPOS solutions is expected to skyrocket, and use cases are expected to continue to develop as more major global tech companies prepare to enter the SoftPOS industry. To meet demand, compliance and certification should continue to be at the center of the conversation around this innovative approach to digital payments. Compliance with functional and security certification requirements is mandated by both international and domestic payment schemes. Meeting these needs is key to success, however, if these are accounted for in the initial design and development phase, manufacturers can ensure that they are not impacting time to market.

Meanwhile, cloud-based kernels are being developed specifically to meet the needs of the SoftPOS ecosystem. These can simplify payment device management, as the ability to make automatic updates removes the need to push new kernels to each device individually after every scheme update.

The post Future Gazing: The Evolution of SoftPOS appeared first on PaymentsJournal.

Square has rolled out Tap to Pay in the U.S., Australia, Ireland, France, Spain, and the UK, equipping sellers to accept contactless payments from their Android device.

In September 2022, the company launched Tap to Pay on iPhone, and this effort widens Square’s positioning—on a more global scale—within the contactless space. It now opens more opportunities for sellers, regardless of the device they use to accept payments.

Using an Android device, sellers can enter their sale, present their smartphone to the customer, and close the loop on that purchase by having them choose a contactless way to pay—whether that’s via a credit card, debit card, or their digital wallet.

In a press release, Alexis Sowa, General Manager of Square Point of Sale at Square, said:

“Square’s goal is to make sure that our sellers, no matter where they are or who they are serving, never miss a sale. Our launch of Tap to Pay on Android brings a unique technology to millions of sellers globally, giving merchants a simple way to accept payments and access world-class, integrated software for their business. Even though Tap to Pay technology has only been available for a short time, the breadth of applications and use cases we’re seeing across our seller base already reinforce its staying power.”

One of Square’s clients, Overhead Door Company, also noted that Tap to Pay on Android is helping to streamline their work, saving them time and effort in the long run. “When our technicians are wrapping up an onsite job, they can just take out their phone, have the client tap their card or phone, and hit the road for their next appointment. Meanwhile, we’re able to keep track of all the sales our crews make in the field right from our Square Dashboard.”

The post Square’s Tap to Pay on Android Launches in 6 Markets appeared first on PaymentsJournal.

Amazon is continuing to expand its contactless payments service, Amazon One, via partnerships with several retailers—including Whole Foods Market, which will be letting consumers pay with just the palm of their hands in 11 of its locations in Colorado.  

How It Will Work 

Whole Foods Market shoppers will need to link both their palm and payment card at a participating point-of-sale station or kiosk. Once that’s completed, they’ll be able to check out by holding their hand above the scanner before leaving the store.  

Amazon will also be rolling out its Amazon Dash Cart feature in Colorado, the fourth store in the nation, which is a smart shopping cart that identifies items in the shopping cart, by using computer vision algorithms and sensor fusion.  

As shoppers leave through the store’s Amazon Dash Cart Lane, sensors identify the cart, and the payment is processed using the credit card on the customer’s Amazon account. The receipt is then emailed to the shopper. 

To use this feature, shoppers will need to log in through a QR code that is available via the Whole Foods Market app. Back in August 2022, 65 Whole Foods stores in California launched the Amazon One checkout solution as well as palm payment technology.  

Whole Foods, which is owned by Amazon, is the latest retailer to leverage the e-commerce giant’s contactless technology. Last month, Panera Bread also announced its partnership with Amazon One, as another way consumers can pay for goods at their locations.  

By and large, more businesses are realizing the benefits of drawing and retaining customer loyalty by gathering data about customer behavior. It is with this vital information that businesses can gain valuable insights into what they can do to provide more personalized offerings and recommendations for their customers, as well as reward them for their repeated patronage. 

The post Amazon’s Palm Reading Payment Option Will Soon Come to Whole Foods Market  appeared first on PaymentsJournal.

DIGISEQ, a UK-based tech company that enables wearable contactless payments, announced last week that it’s partnering with financial super app Curve to expand its wearable payment technology to millions of users across 31 European countries.  Customers will be able to pay quickly and securely, using a variety of elegant, yet functionable items such as a bracelet or a ring.

Fashionable, Functional, and Speedy Contactless Payments 

Choice of payment methods is the hallmark of any successful venture as more customers are paying in a wider variety of ways than ever before. And contactless payments, especially, have seen accelerated growth in recent years, as more consumers turn to their devices—including smartphones and smartwatches—to pay for goods and services.  

Through the partnership, consumers can integrate their Curve payment account directly onto their wearable by using their smartphone.  

“In addition to payments, [we’re bringing] a much richer consumer interaction experience with ’Promo-Ready’—simply tap your wearable against your NFC smartphone to receive offers, upgrade your account, see your account balance, and more. This delivers huge benefits to brands looking to interact more frequently with their customers, and also streamline costs and incentivise more daily transactions,” said Terrie Smith, Co-Founder of DIGISEQ in a press release. 

This effort is the latest seen in the payments space of companies giving consumers more choice in how they pay. By offering this kind of flexibility, companies can deepen their relationship with their customers and continue to personalize their experience by providing offers that would better serve them.  

In his report, “2023 Payment Trends & Predictions,” Javelin Strategy & Research’s own Marco Salazar explores how consumer choice will be the main driver of payment technology and increasing user-centricity. 

As wearable payment technology continues to rise, with a projected growth of more than $150 billion until 2023, there’s something to be said about what this partnership means for the future of payments. More payment choice and convenience are what consumers want.  

The post DIGISEQ Teams Up With Curve to Support Contactless Payment Technology  appeared first on PaymentsJournal.

In an effort to modernize its systems, the U.S. Department of Agriculture Food and Nutrition Service (FNS) will begin a five state pilot utilizing contactless mobile payments for recipients in the Supplemental Nutrition Assistance Program (SNAP). Emily Crowe of Progressive Grocer adds details on the program launching in Illinois, Louisiana, Massachusetts, Missouri, and Oklahoma:

“The FNS will work with state agencies and electronic benefit transfer (EBT) processors, mobile wallet providers, retailers and others to roll out the pilot program. Retailers and households receiving SNAP benefits can decide whether to use the new technology. Shoppers can continue to use their EBT card as preferred.”

This move is a massive step forward in modernizing payment systems for government benefits and represents a positive shift to meet both customers and retailers at established and growing points of technology. Previous research from the North American PaymentsInsights study shows that 53% of Apple iOS users and 41% of Google Pay consumers used a digital wallet in a 12-month period to make an in-store purchase.

By allowing contactless and mobile-driven payments, the FNS is creating a more flexible program that accounts for the changing behaviors of consumers at all income levels. As covered in a recent Javelin Strategy report on the prepaid mobile ecosystem, prepaid mobile plans are attractive to underbanked and underserved consumers who can use the easy entry points to gain access to the now ubiquitous service delivered through smartphones, including mobile and contactless payments. The prepaid mobile market, while easily transferable from one service to another, currently serves approximately 65 million U.S. consumers utilizing just the three most prominent carriers: AT&T, T-Mobile, and Verizon.

The strategic advances of FNS also support the market growth of the Nutritional Assistance category, which Javelin predicts will reach $141 Billion by 2026, even after the temporary COVID-related benefits expired recently. The impact of inflation and relate adjustments to food costs will drive much of that growth to ensure that impacted families can continue to afford basic necessities.

The next step for FNS will be to work to accelerate the pilot and ensure a full national rollout in a timely manner that allows all impacted consumers to realize the benefits of contactless payments within the program. The major concern would be a protracted pilot program that misses out on continued product evolution within the contactless payment, mobile payment, and point-of-sale ecosystems.

Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Javelin Strategy and Research.

The post USDA Piloting Contactless SNAP Payments appeared first on PaymentsJournal.

Singapore, long considered among the most tech-savvy countries in the world, has reached a tipping point: Card use has overtaken cash as a payment vehicle there, according to the Visa Consumer Payment Attitudes Study.

The move away from cash is reflected in the penetration of contactless cards among consumers in Singapore. More than four in five consumers (82%) use the cards, which have become the payment preference across a broad swath of purchase categories. Visa reported that more than 95% of the transactions processed on its platform were contactless. That’s one of the highest rates in the world.

“Singapore’s tech-savvy consumers lead hyper-digital lives, and our nation’s advanced payments infrastructure has made it possible for many to go cashless,” said Adeline Kim, Visa’s Country Manager for Singapore and Brunei.

Singapore Prime Minister Lee Hsien Loong used his National Day Rally 2017 speech to lay out a vision for a cashless society, and initiatives in that direction soon followed, with e-payments proposals, QR codes, peer-to-peer (P2P) services, and others crowding in.

Why Singapore Stands Out

Now, Visa says, Singapore is the regional leader in both the usage of and preference for contactless cards, with 74% of consumers using them and 29% preferring them.

More findings in the Visa report:

• 60% of consumers in Singapore have succeeded in going cashless.
• On average, they go 10.5 days without using cash.

A Trend That Spans Borders

Although the move away from cash is particularly acute in Singapore, it is occurring in general terms across the globe. In the United States, for example, Javelin Strategy & Research shows that cash ranks third among consumers’ most used payment methods, well behind major credit cards and at about half the rate of debit or check cards.

What’s remarkable about the trend in Singapore is the degree to which that shift is reflected in the use of contactless cards and the way the government is pushing the initiatives.

Certainly, some of the movement away from cash was driven by the onset of the COVID-19 pandemic, which forced consumers into payment channels that didn’t involve contact with others. In Singapore, Visa said, the pandemic accelerated consumers’ expectations of becoming a cashless society by three years.

Elsewhere, Cash Has Its Place

In the broader view, beyond Singapore’s borders, cash remains a hardy vehicle for payments. According to Health of Payments, a Javelin report sponsored by NCR, cash remains the preferred method of paying others in the United States.

According to the report by Marco Salazar, the Director of Tech & Infrastructure at Javelin, the prevalence for cash in such payments at least doubles the preference for non-bank P2P services like PayPal and Venmo and the use of personal checks. A range of factors—convenience, security, lack of fees, spending control, and the preservation of privacy—came into play for consumers’ affinity for cash.

Two-thirds of U.S. consumers want cash as a fundamental option for payments, the report indicated. That’s in line with a general preference for a range of payment options, so consumers can pick the one best suited for them.

The post In Singapore, Cash is Not King appeared first on PaymentsJournal.

Businesses across six markets can now accept contactless payments via Android devices, as part of Stripe’s Tap to Pay expansion.  

This push opens more opportunities for merchants, and according to TechCrunch, Stripe is “the only payments company providing Tap to Pay on Android currently.”  

“Stripe’s launch of Tap to Pay on Android puts contactless payments hardware into the pockets of millions of businesses around the world,” said John Affaki, Stripe’s Terminal Business Lead. 

As a feature of Stripe Terminal, Tap to Pay offers an alternative to card readers. It’s currently live in six markets—Singapore, Australia, New Zealand, Canada, the U.S., and the UK. Its transactions are supported via mobile payments such as Google Pay, as well as American Express, Visa, and Mastercard. 

Last year, Stripe partnered with Apple to offer Tap to Pay, enabling businesses to scale their operations. It converts any iOS device into a payment initiating or payment processing terminal. As of last year, this feature was only available within the US market.  

Tapping Into Android Users 

With millions of Android users worldwide, businesses can accommodate consumers with Android devices more easily.  

Since the pandemic, contactless payments have seen an increase in demand. Currently, 20% of all in-person debit and credit card payments are contactless in the U.S. alone. As contactless payment demand continues to grow, businesses, regardless of size, must be equipped to accept this form of payment.  

The post Stripe Launches Tap to Pay for Android Devices  appeared first on PaymentsJournal.

Several big banks, including Wells Fargo, U.S. Bank, and PNC, are developing a digital wallet using Early Warning Service’s platform, which also runs Zelle. It will be launched later this year and aims to “address longstanding payment problems in e-commerce.” What’s more, there will be roughly 150 million Visa and Mastercard credit and debit cards connected once the digital wallet is launched. Additional card networks will be added in the future.  

This new initiative will enable consumers to pay securely, without having to enter their card numbers—which can increase the risk of fraud. Increased incidences of fraud translate into an increase in rejected payments, which can negatively impact sales.  

Late To the Digital Wallet Game? 

The introduction of this new digital wallet poses a question of whether these banks are late to the digital wallet arena, especially since digital wallets including Apple Pay and Google Pay have been around for years. According to Jim Marous, co-publisher of The Financial Brand and host of the Banking Transformed podcast, it’s “too little, way too late. Financial institutions may participate, but it is the consumer who drives scalability.”  

Many customers have already entrusted their credentials to the likes of Apple, Google, PayPal, and Amazon. And customers who heavily use mobile wallets and mobile payments have already made their choices of payment partners. 

At the end of the day, it’ll come down to convenience and potentially, rewards. Marous suggested that perhaps the wallet can beef up its security and incorporate rewards into the wallet.  

The post Big Banks Are Working on a New Digital Wallet   appeared first on PaymentsJournal.

A recent survey from Interac reveals data round contactless payments. Consumers may be more likely to use public transportation if there was a simpler way to pay for it. For example, they may pay with contactless payments. In fact, more than two-thirds (68%) of respondents said so and indicated it would be something that would incentivize them.

The Interac study also found that this particular payment option is more appeal than having a standard transit pass or even an app. According to Andrew Yablonovsky, Associate Vice President of Product Strategy & Growth at Interac:

The consumer experience needs to become more seamless if we are to entice people to use transit. Right now, transit is seeing a slow post-pandemic recovery with daily ridership having dropped by approximately 44% since the pandemic. This can have consequences for our economy since it stands to benefit from greater transit ridership. Our survey results also show that over half of Canadians view transit as important for economic recovery.

Research from Interac is in line with data that Amex Trendex published last year. The company found that contactless payments were how many consumers in the U.S. who take public transportation preferred to pay for their fares. More than a quarter (27%) said it was.

Overall, consumers are becoming more comfortable paying this way—and not just when it comes to public transportation. Whether they’re paying for an in-store purchase or in a restaurant, consumers are becoming more comfortable simply tapping their device or debit/credit card. This shift in behavior has increased amid the pandemic, and has certainly stuck because of the comfort and ease of contactless payments.

And this is happening at a global scale. Though it’s more prominent in some regions, including the United Kingdom. In fact, in the UK, consumers use contactless payments in nearly 90% of face-to-face payment transactions. That figure was roughly 65% at the beginning of the pandemic, according to data from Lloyds Bank.  

“As consumers continue to move further into mobile payments, there is a likely expectation that contactless card payments become completely ubiquitous in all geographies, with similar adoption curves of mobile spreading as use is further accepted,” said Jordan Hirschfield, director of prepaid at Mercator Advisory Group.

The post Can Contactless Payments Increase Transit Ridership in Canada? appeared first on PaymentsJournal.

Contactless technology has been a popular term after the COVID-19 outbreak exposed us to increased contamination risks. To adapt to new realities, the travel and tourism industry had to embrace contactless payments as a way of aiding social distancing.

This has hastened the adoption of next-generation technology, and contactless payments in travel and hospitality are now the norm. Each customer-to-merchant interaction may be done digitally, giving customers a secure, worry-free, and seamless experience.

According to Identiv, the global contactless payments market will rise to $18 billion over the next five years, representing an 11.7% compound annual growth rate (CAGR). As a result, 27% of small businesses have noticed an increase in consumers’ contactless spending habits, and alternative payment technologies such as BNPL services are now included in Apple’s iOS 16 release as part of Apple Pay.

Contactless payments in touristic services

Customer expectations have changed drastically as they emerge from pandemic life. Many see digital services as the ‘new normal,’ so expect this to be replicated when going abroad. Yet, as hotels try to meet these needs, without the right assets and processes in place it’s proving a challenge.

If you’ve been in the travel industry for a while, you’re probably getting tired of hearing people complain about how long it takes to get paid by credit card processors. Transaction values in travel are getting higher and systems are getting older. The manual processing of customers is one of the greatest pain points and hotels find it hard to collect and keep customer information all into one secure database.

In the modern travel industry, businesses can no longer afford to use inefficient and dated payment methods. Sophisticated technology that automates routine payment processes is needed. This will help hotel operators reduce operational costs and allow them to be more efficient with collecting guest payments. Omnichannel services will help staff to monitor and swiftly issue payments and be comfortably integrated into self-service machines, alleviating pressures for staff from the front desk.

The future of alternative payments

As it stands, the travel industry should rethink travel, putting payments first as many other industries have done. The popularity of digital wallets, contactless payments, and Buy Now Pay Later (BNPL) methods has accelerated. Customers look for a simple, stress-free experience and don’t want to book a room at a hotel which doesn’t accept their preferred payment method or lack a guest checkout option. Without this wide range of choices, hotels will fall victim to their competitors as customers will go elsewhere.

Swapping to an omnichannel end-to-end payment is the competitive advantage hoteliers have been looking for. A unified end-to-end payment process can help manage online booking fees and accommodation deposits. These fees can be collected swiftly, while customer data is easily tracked on a scale and recorded all in one place.

International payments processing

As a hotel owner, the importance of multi-language payment should not be underestimated. It allows travel businesses to cater to both a local and broader audience, reaching new possible customers across the globe.

Multi-currency payments are also important for any hotel business. This choice can attract customers who are more likely to decide when to buy, especially when it’s a currency they are familiar with.

Finally, hotels that integrate Dynamic Currency Conversion (DCC) features on their website allow the customer to pay in their local currency and save money on exchange rates. Full payment transparency is shown on the terminal at the point of sale (POS), benefitting the experience of both the customer and the business. 

Secure end-to-end payments

Implementing an innovative payment method has a multitude of benefits for hotel businesses. The centralised nature of end-to-end payments means transactions can be processed faster. With a rise in late bookings and last-minute cancellations, hotel owners can easily accept payments and issue refunds.

A centralised system can help with tracking real-time customer data. Complete visibility allows businesses to cater to every customer exclusively, including tailored support and opportunities to give rewards to returning customers. The result? The golden ticket to customer loyalty and retention.

With unnecessary admin being largely taken care of, businesses can focus on high-priority tasks and ensure more can be done to improve the business. A dependable and trustworthy solution will reflect positively on your team experience that stands out as seamless and flexible is a feature most customers look for in hotel stays and distinguish one business from the other.

Sophisticated technology that automates routine payment processes is needed. This will help hotel operators reduce operational costs and allow them to be more efficient with collecting guest payments. Omnichannel services will help staff to monitor and swiftly issue payments where needed. In addition, multi-language and currency software automatically reduces time spent worrying about exchange rates and language barriers. The power of innovative technology can allow payments to be comfortably integrated into self-service machines, alleviating pressures for staff from the front desk.

Digital payments as a service

Contactless payments are the way forward in a post-pandemic future, and early adopters will undoubtedly have an advantage.

From making reservations to hotel check-ins and check-outs, ordering catering and room service, sightseeing, and learning about events and tourist attractions, there is nothing contactless hospitality solutions cannot do more efficiently while maintaining brand integrity.

The industry-wide message is clear: businesses should no longer neglect the value-added services these modernized payment systems provide.

The post Contactless payments: How technology is changing the traveler experience appeared first on PaymentsJournal.

Lloyds Bank data shows that consumers in the United Kingdom use contactless payments in nearly 90% of face-to-face payment transactions, an increase from 65% prior to the onset of the Covid-19 pandemic. The results in the U.K. are also above what other studies have indicated for other countries. Karl Flinders of Computer Weekly highlights the findings of the bank:

“According to the numbers from the UK bank, 65% of face-to-face payments were made using contactless debit cards in June 2019, in the early stages of the pandemic – but by June 2022, this had reached 87%. The bank said that in June 2020 the proportion of face-to-face payments made by contactless debit cards was 72%, and in June 2021 it was 83%.”

Use in the U.K. is advantaged by the county’s position as an early adopter of contactless payment technologies, especially in low value transactions that demand convenience in processing the payment, which has given confidence to increase limits over time, as Flinders explains:

“Contactless cards were first made available in the UK in 2007. Back then, there was a £10 spending limit. That limit increased to £30 by 2020, but has seen significant increases during the pandemic. It was increased to £45 in April last year, and now it is £100.”

The data from the UK compares similarly to Mercator’s research into payments for Canadian consumers where 86% of consumers used a chip card for a transaction and 81% had used a tap-to-pay card in 2021. In contrast, contactless payments did not fully launch in the United States until 2015 with the U.S. launch of EMV. This paved the way for chip and signature transactions ahead of the eventual further expansion to fully contactless tap-to-pay transactions utilizing Near Field Communications technology. With the late start, Mercator’s North American Payments Insights research indicates there is considerable acceleration in use of contactless payments, but not at the levels of the UK. Our research shows that 45% of Americans use tap-to-pay, with roughly half starting because of the pandemic. In addition, 73% use chip payments, which were already more ubiquitous before the pandemic, as only 14% of those surveyed began using chip cards because of the pandemic.

The increase of use, especially of tap-to-pay was aided in most geographies by the easy transition of card methods, as a simple transition versus a blunt change in a move to a mobile payment. The Computer World article adds more details:

“Covid-19 spurred the take-up of contactless. When the pandemic took hold, people were told to limit physical contact, including reducing their use of cash. Contactless payment technology, as the name suggests, was an ideal replacement for cash because, unlike mobile phone payment apps, most people already used payment cards. This led groups of people such as the elderly, usually slow to adopt the latest technology, to take it up.”

As consumers continue to move further into mobile payments, there is a likely expectation that contactless card payments become completely ubiquitous in all geographies, with similar adoption curves of mobile spreading as use is further accepted.

Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group.

The post UK Contactless Payments Continues to Surpass Rest of World appeared first on PaymentsJournal.

Contactless Transactions at Vending Machines Soar During COVID-10

A new study from  Cantaloupe and Michigan State University brings additional support to the decline of paper payments and increase of contactless payments, either through mobile payment or tap to pay, even in formerly cash and coin heavy vending machines. Kevin McIntyre reports further in CStore Decisions:

“A study conducted by Cantaloupe and the Broad College of Business at Michigan State University revealed that contactless transactions at vending machines soared during the COVID-19 pandemic compared to cash payments. The data collected for the study analyzed a sample set of 160,000 Cantaloupe ePort cashless devices across various location segments.

The “Payments in Unattended Retail” study saw the overall share of cashless transactions increase dramatically from 51% in January 2020 to 62% in October 2021 compared to cash transactions, which decreased to from 49% to 38% in the same time period.”

There continues to be an increase in the adoption of contactless payment options, especially among younger consumers. This includes such technologies as tap to pay, mobile wallets, and mobile applications.

40% of Canadians Use Less Cash due to Pandemic – Going for Contactless Payments?

The results from the Cantaloupe/Michigan State study in the specific vending market show similar findings to Mercator’s findings overall and specifically in as reported in the Mercator Advisory Group North American PaymentsInsights report on digital and contactless payments use in Canada following the pandemic. That report showed 40% of Canadians reported using less cash as a direct result of the pandemic with 18% using no cash at all in a given week.

The move away from cash wasn’t unexpected, but there is increasing evidence that card swipes are also on the way to being replaced by either card or phone taps which should have a significant impact on vending and other self-service purchase locations, as Cantaloupe concludes:

“When we analyze our entire network of devices throughout the first half of 2022, we’re seeing contactless payment methods make up nearly half of all cashless transactions,” said Sean Feeney, CEO of Cantaloupe. “And these trends aren’t slowing down. The data indicates that by the end of 2022, more than two thirds of all transactions will be cashless, driven by consumers preferring to tap. For vending operators, this underlines the importance of offering contactless payment options if they want to increase revenue and remain competitive.”

Overview by Jordan Hirschfield, Director of the Prepaid Advisory Service at Mercator Advisory Group

The post Vending Consumers Indicating Strong Preference For Contactless Payments appeared first on PaymentsJournal.

SAN FRANCISCO (July 12, 2022) – Adyen (AMS: ADYEN), the global financial technology platform of choice for leading businesses, has officially launched Tap to Pay on iPhone, which allows businesses to use iPhones to accept contactless payments. 

By partnering with NewStore, businesses like Vince and Burton can accept payments via the new product. Adyen is also partnering with New Black to enable the product for retailers like G-Star and Scotch & Soda. In addition to offering the solution to partners, Tap to Pay on iPhone will also be made available directly to retailers and platforms including Nike, Lightspeed and Fresha.

“We’re excited to expand upon our partnership with NewStore and Adyen to become one of the first retailers in their network to bring Tap to Pay on iPhone to our retail store locations,” said Jack Schwefel, Chief Executive Officer, Vince. “Our customers expect an elevated in-store experience and we are confident that the ease and convenience of this new payment option will resonate with both current and new Vince shoppers.”

“NewStore and Adyen are always on top of the emerging trends that allow us to provide the best shopping experience possible, and bringing Tap to Pay on iPhone to our stores this quickly and easily is a great example of that,” added Brian McAllister, Director of Global Operations, Consumer Direct, Burton. “The biggest advantage of this feature is it eliminates our dependence on traditional payment terminals, which means we can now offer an even more seamless and secure way to accept payments.”

“Tap to Pay on iPhone is easy to use, and leverages the built-in security features of iPhone to keep your business and your customer data private and secure,” says Kamran Zaki, COO at Adyen. “This new way of paying will change how consumers and businesses view mobile payments. We are proud to officially be live, enabling businesses to give customers more choice and flexibility.”

Tap to Pay on iPhone will enable Adyen’s customers to stay at the forefront of innovation by:

• Simplifying in-person payments by removing the dependence on payment hardware to accept transactions giving them access to a complementary way to accept payments
• Getting up and running quickly with installation and onboarding that allows businesses to scale up their payment operation easily
• Providing seamless checkout experiences that increases mobility on location to provide an easy and fast checkout experience for shoppers.
• Allowing for a convenient, safe, and secure way to pay for customers since transactions are encrypted and payment data is protected by the same technology that makes Apple Pay private and secure. 

To learn more, visit here.

About Adyen
Adyen (AMS: ADYEN) is the financial technology platform of choice for leading companies. By providing end-to-end payments capabilities, data-driven insights, and financial products in a single global solution, Adyen helps businesses achieve their ambitions faster. With offices around the world, Adyen works with the likes of Facebook, Uber, H&M, eBay, and Microsoft. Adyen continuously improves and expands its product offering as part of its ordinary course of business. New products and features are announced via press releases and product updates on the company’s website.

The post Adyen Goes Live With Tap to Pay on iPhone appeared first on PaymentsJournal.

If you’ve ever been in a store and tried to pay with a credit card only to be told that they don’t accept cards, you know how frustrating it can be. Luckily, there’s a new way to pay that’s sweeping the nation: tap to pay. With this new technology, you can simply tap your phone against the reader at the register and your payment will go through instantly. No more fumbling for cash or waiting for your card to be approved – tap to pay is fast, easy, and convenient.

Apple’s new Tap to Pay feature has reached beta testing and with other investments, such as the Credit Kudos acquisition, could be a sign of an ongoing strategy to increase use of the iPhone as a full payments platform. Jonny Evans adds details in his Apple Holic report for Computerworld:

Tap to Pay is expected to launch for real this spring (both Stripe and Adyen say they will enable the services around then) and I imagine other payment service providers who are already working with Apple Pay will also introduce support for it over time. Businesses using Tap to Pay should also register with Apple Business Register.

Apple is doing a lot of work to shore up and extend its Apple Pay services and systems, including steadily introducing on-device support for government ID.

Of course, once an iPhone becomes your passport and your driving license, it also becomes a point of trust for additional payment and identity services.

The continued potential extensions within Apple’s wallet allow a robust portfolio from servicing merchants with Tap to Pay to serving unbanked consumers through Apple Pay currently and possible extensions to BNPL opportunities. Evans notes the possibility of the full-service opportunity:

It is interesting that activity around this side of Apple’s business does appear to be intensifying just over three years since Apple launched Apple Card. Cupertino clearly sees a big opportunity as the entire payment sector transforms into a digital and frictionless opportunity spot in which taking and or making payments becomes as easy and habitual as switching on a water tap.

In the near-term look for additional support for Tap to Pay beyond already announced plans from Adyen and Stripe to help Apple build share among merchants.

Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group

The post Apple Tap to Pay Is in Beta Testing… Full Payments Platform Forthcoming? appeared first on PaymentsJournal.

Google’s mobile payments and pass service appears to be returning to the Google Wallet branded umbrella as Google looks to streamline its multiple branded offers. Kyle Bradshaw writes further in 9to5Google:

On Android, things have been a bit messy in regards to contactless payments, mostly due to what feels like an ever-changing strategy on Google’s part. For most of the world, “Google Pay” is and has been run through a standalone app that solely manages your contactless payments alongside other supported tickets and passes.

Meanwhile, in select countries like the US, Singapore, and India, there’s an entirely different app, “GPay,” which hosts a number of social features, deals, and peer-to-peer payments, as well as once being home to Google’s cancelled ambitions for banking. This app has less of an emphasis on contactless payments, with the work of managing your cards and passes being handled by Google Play Services rather than GPay.

The wallet would serve as a digital storage location for contactless payment cards, loyalty cards, passes, etc. Bradshaw reports that payments would still likely be processed through Google Pay as a separate service.

The top of Google’s Wallet app has a dedicated place to showcase your default Google Pay contactless payment card. The phrasing here (and in the intro graphic) is interesting as it suggests that the act of payment still happens “with Google Pay” though you’re adding the card to “Wallet.” The implication being that the two are distinct and that both brands may be sticking around.

These moves highlight the development of growing wallets beyond payments and into adjacent sectors with the branding aligned to those goals.

Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group

The post Google Wallet Might Be Back, but Google Pay Is Sticking Around Too appeared first on PaymentsJournal.

Multiple research studies are indicating continued adoption of contactless payment options, with COVID-19 creating additional impacts in utilization. Consumers are finding that contactless payments create speedier transactions and can be simple to complete. Insider Intelligence breaks out several recent surveys:

“In Germany, a combined 46% of adults ages 16 and older said they use a contactless card in-store once a week, daily, or several times a day, according to May 2021 data from Bitkom Research. In the UK, 48% of consumers said they either began using contactless payment methods, or used them more often, because of the pandemic, according to a June 2021 Elavon survey conducted by Ipsos MORI. Meanwhile, in France, 40% of adults cited speed as a big advantage of contactless payments and 29% noted their simplicity, according to a September 2021 poll from OpinionWay and Fortuneo.”

Mercator Advisory Group research confirms that U.S. consumers are also adopting technologies, especially amongst younger generations (Gen Z and Millennials), where 50% of people utilize technologies, such as tap to pay, mobile wallets or retailer specific mobile applications. Inside Intelligence also reports that the growth in contactless payments is encouraging merchants such as Aldi to invest in autonomous checkout technology for its stores, similar to Amazon’s Just Walk Out solution.

Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group

The post Survey Says… Show Me Contactless Payments! appeared first on PaymentsJournal.

The news of Apple’s recent decision to make NFC capabilities for payment cards available to app developers continues to grab headlines as fintech investors ruminate on where disruption in the payments ecosystem will be felt most.

In this clip from “The Future of Fintech” on Motley Fool Live, recorded on Feb. 10, Motley Fool contributors Matt Frankel, Jason Hall, and Will Healy discuss and analyze Apple’s recent announcement that could potentially put a dent in fintech stocks but could also be a big win for small businesses. 

A persistent misconception that comes up again in this discussion is that this new feature gives any iPhone user the ability to accept card payments, and facilitates P2P payments just by tapping phones together or tapping a card on the phone. This is not the case; there is no inherent payment processing capabilities in the iPhone. This announcement simply makes NFC card-reading capabilities available to developers that have payment processing apps, and is why Stripe was announced as being the first to integrate this technology with their payment processing app.

This will be a potential win for Square as well. Square was first to market with an innovative card reader that connected to the audio jack on an iPhone and enabled the user to swipe credit/debit cards. Since that time, iPhones no longer have audio jacks, and cards have evolved from magnetic stripe technology to EMV chips and NFC. Square has a Bluetooth-connected chip card reader that works with its payment processing app, but connecting, charging, and managing a separate device is sub-optimal for Square users. The iPhone’s ability to read cards directly, eliminating the need for a separate device, has the potential to increase the utility of Square’s app if they integrate to the new functionality.

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

The post Apple Continues to Make Waves with NFC Capabilities appeared first on PaymentsJournal.

The Danish fintech start-up Vibrant has seen an exponential increase in the use of its tap-to-phone payment solution. Between August 2021 and January 2022, it recorded 1,131.97 per cent growth in the number of transactions made via its app.

This has been matched by a 736.41 per cent expansion in transaction values (the amount of money changing hands in payments) and a 606 per cent boost in the number of merchants using Vibrant, which is backed by VISA.

The Vibrant app is a revolution in payments for the smallest businesses. Instead of requiring bulky contactless card readers, it allows micro-merchants to receive contactless payments directly on an Android phone, using only the app to accept it.

The simplicity of the system is attracting people quickly in the markets where it’s available: Cyprus, Denmark, Greece and Spain. The fee is low and transparent at 1.39 per cent for all card transactions, providing an added draw. What’s more, there’s no binding period and payments appear instantly. There are no monthly expenses for customers either.

Commenting on the stratospheric growth, CEO, Kasper Enggaard Krog, says, “Making and receiving a contactless payment should be easy. Yet it isn’t – especially for micro businesses. It has often meant expensive ongoing fees, slow settlements, lots of admin and called for an up-front investment in cumbersome and basic technology.

“We’ve changed that by allowing hairdressers, car washes, market stalls, cafés and many other small traders to take a payment with nothing more than their phone and our app. It simplifies everything.”

The pandemic has accelerated the growth in contactless payments. In 2019, about 40 per cent of micro businesses didn’t accept card payments. This is despite there being six billion contactless cards in the world and 47 per cent of people preferring to pay with one when at a physical point of sale.

Since then, businesses have made the change and are looking for the simplest and most cost-effective ways to accept contactless payments. Vibrant is meeting that need and expects to continue growing at pace as more traders become aware of the brand.

Vibrant plans to continue expanding throughout Europe and will develop the app to include payments, insights, and integrations, which will make merchant’s lives easier and support business growth. With Apple having just announced it will allow tap-to-phone payments in the near future, Vibrant plans to extend its app to iPhones.

The post Payment Transactions Exploded by over 1,000 Percent in Six Months for Danish ‘Tap-To-Phone’ Start-up Vibrant appeared first on PaymentsJournal.

Apple has withheld access to the NFC chip on the iPhone ever since it was first shipped to protect its wallet business. While this article speculates that perhaps things will be different as Apple roles out the ability to accept cards using the iPhone’s NFC chip, I’d bet dollars to donuts it remains an Apple-only product that competes with Square and all other iPhone acceptance solutions. While eliminating the need for hardware is an advantage, it also creates a disadvantage in that the solution can’t accept EMV or mag stripes without the added hardware. 

Then the question becomes: What happens to the money? When Square enables a merchant to accept a card, the value is cleared through a Square merchant account that moves the funds to the merchant’s demand deposit account (DDA). To compete with Square, Apple needs a similar construct, but nothing in the announcement suggests that is happening. This is a build vs. partner question. Perhaps, as with Apple Card and Goldman Sachs, Apple will find a partner willing to play by Apple’s rules:

“In order to accept payments on an iPhone today, merchants need to use payment terminals that plug in or communicate with the phone via Bluetooth. The upcoming feature will instead turn the iPhone into a payment terminal, letting users such as food trucks and hair stylists accept payments with the tap of a credit card or another iPhone onto the back of their device.

The move could impact payments providers that rely on Apple’s iPhones to facilitate sales, such as Block Inc.’s Square, which dominates the market. If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware. If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square. A Block representative didn’t immediately respond to a request for comment.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Apple to Deploy NFC Acceptance on iPhone appeared first on PaymentsJournal.

Across most of the world, the adage “cash is king” is beginning to lose relevance in recent years, as newer technologies like mobile wallets come to light. The emergence of smartphones is a major driver in the transition of the financial world to the digital platform, triggering a massive change in the way users connect, interact and conduct business.

Once considered a luxury item for a select faction of the global populace, smartphones have now become an intrinsic part of modern life, necessary for even the simplest of day-to-day operations. According to Data Reportal, the number of smartphone users has grown by nearly 100 million over the past year.

This development has fostered the shift of not just individuals but also major industrial sectors like finance to the digital world. As consumers worldwide become more acquainted with the merits of digital payment solutions, the burgeoning use of smartphones will put technologies like mobile money on a significant growth trajectory in the modern era. Global mobile wallet market size is set to cross $700 million by 2027, suggests a report by Global Market Insights Inc.

COVID-19 spurs innovation in contactless digital payments

Payment technology has undergone significant evolution over the decades. This evolution has been eventful, to say the least, starting from cash, to checks, to credits cards, and finally to digital payments. Each of these technologies, at some point, was the latest in payment technology, a title that has now been claimed by e-wallets. However, mobile money has made considerable progress since its initial rise to prominence following Google’s introduction of the Google Wallet in 2011.

Even though the technology came into existence nearly a decade ago, it was initially met with mixed emotions, which proved to be a challenge to its adoption. However, the onset of the coronavirus pandemic has turned this sentiment around over the past year, creating an unprecedented upsurge in need and demand for contactless digital payment options, including mobile wallets.

Based on a Visa Back to Business study, over 60% of consumers expressed that they would switch to a business with contactless payment options installed, with almost half claiming that they would stop shopping at stores that only offer cashier or shared machine-led transactions. In 2020, mobile wallet payments became the most sought-after POS payment approach across the world. This boom, according to TradingPlatforms.com, was fueled mainly by the rising fear among consumers regarding the possible transmission of the Sars-COV-2 virus via the exchange of paper banknotes.

Contactless digital payments is one of the few industrial areas that emerged relatively unscathed from the COVID-19 pandemic, making it essential for businesses to recognize and adapt to the trend of adding contact-free functionalities to their mobile wallet offerings. A notable example of this is ICICI Bank, which introduced a new contactless payment service through its iMobile Pay banking app, to enable its user base to make transactions by waving their phones nearby POS devices as various outlets. Powered by NFC (Near Field Communication) technology, this functionality was added to provide consumers with convenient and contactless mobile wallet payment methods on the bank’s official mobile banking app, eliminating the need for carrying physical cards.

QR code technology to become a standard feature in digital wallets

In most emerging economies such as China and across Southeast Asia, QR codes have become a core functionality in e-wallet solutions. According to GMI estimates, the mobile wallet industry from the optical/QR technology segment is poised to register a 15% CAGR through 2027, driven by the widespread adoption of QR code-powered mobile wallets by businesses and consumers alike.

Despite this burgeoning popularity in Eastern countries, however, the growth of QR code technology has been relatively slower in Western regions such as the United States. Considered a technological solution to a non-emergent problem, QR codes moved to the sidelines in terms of development in the initial years of the technology.

In recent times, however, as the pandemic raised worldwide concerns regarding health and safety, QR codes witnessed a renewed interest from myriad sectors, especially as key functionalities in mobile wallet payments. Contactless digital payments have become an area of focus of late, creating a massive flurry among QR code advocates, with more and more consumers urging merchants to inculcate touch-free digital payment options for a more comfortable shopping experience in physical stores.

Aside from the big tech giants like Apple and Google who have joined the bandwagon, retailers and merchants are also beginning to capitalize on the trend of QR code-powered mobile wallets. For instance, in September 2020, the NFL team Jacksonville Jaguars introduced QR-based mobile payment functionality at various concessions and retailers at the franchise’s stadium, through the official team app’s Jags Pay mobile wallet.

With mobile devices such as smartphones taking up an increasingly important role in the daily lives of consumers, the shift towards contactless digital payments, specifically e-wallets, has become a major differentiator for fintech vendors worldwide. In this scenario, as consumers and industries become more accustomed to conducting transactions on digital platforms, mobile wallets are likely to become a core contributor to more seamless, convenient, and fast payments in the future.

The post Global Shift Towards Contactless Digital Payments to Underpin Significance of Mobile Wallets appeared first on PaymentsJournal.

The simple answer is yes. Card network payment types almost never go away completely. This article, however, is focused on restaurants and mobile solutions. Pay at the table and “order online, pick up in-store” are new use cases that open up the opportunity to introduce new payment methods, from QR Codes to direct debit or prepaid:

“The food industry continues to evolve in ways of making things faster and easier for consumers. Starbucks recently launched a Pickup store in partnership with Amazon go.

“Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go or deciding to stay in the lounge for the traditional third place experience Starbucks is known for.” Katie Young, senior vice president of global growth and development at Starbucks said in a statement.

These types of convenient partnerships have carried over in the hotel industry as well. Hospitality tech company Criton has partnered with restaurant tech firm Hungrrr to add a safe, contactless food ordering system to its hotel guest app. The app allows guests to self-order and pay for food and drinks, both in the hotel restaurant or in-room, from their mobile device. This solution was designed to help hoteliers drive food-and-beverage revenues while also safeguarding the health of their guests.

With the need for a convenient way to order growing, Grubhub has created a partnership to extend it’s restaurant network to Transact’s CampusCash program to offer universities an off-campus meal spending program for students. The CampusCash program now allows its over 12 million students to use their cashless payments at over 300,000 restaurants nationwide.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Is Contactless Forever? appeared first on PaymentsJournal.

NEW YORK, December 15, 2021 – For adults who take public transportation, contactless payments are a preferred payment method, making mass transit a fast and easy way to get around this holiday shopping season. In markets that have greater public transit infrastructure, Amex Trendex data shows more than a quarter of transit riders (27%) in the U.S. say contactless is their preferred payment method when paying for public transportation.

Amex Trendex data also shows that seven in 10 adults (69%) in the U.S. say they plan on using contactless payments for at least some portion of their holiday shopping this year. Purchasing gifts in-store (53%), purchasing food for holiday meals in-store (44%) and eating/drinking while out holiday shopping (43%) are the leading occasions where adults plan on using contactless payments.

Plus, more than two-thirds of adults (68%) agree that contactless payment options make purchasing items more seamless, which is especially true for Millennials (79%). With nearly a third of adults (29%) saying they would seek out a retailer that offers contactless payment options when doing last minute holiday shopping, now is the time for businesses to enable and encourage this payment option. 

“We’re working closely with both merchants and consumers this holiday shopping season on a multi-city campaign to show how easy it is to Tap, Pay, and Go, both in-store and on public transportation where available. Whether you’re going from SoHo to the Upper West Side, the Pearl District to Downtown Portland, or Lincoln Park to the South Loop, you can Tap to Pay along the way,” said Colleen Taylor, President, Merchant Services – U.S. at American Express.

To learn more about contactless for everyday purchases, please visit: https://www.americanexpress.com/us/credit-cards/features-benefits/contactless/index.html

ABOUT AMERICAN EXPRESS
American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success.  Learn more at americanexpress.com and connect with us on facebook.com/americanexpress, instagram.com/americanexpress, linkedin.com/company/american-express, twitter.com/americanexpress, and youtube.com/americanexpress.

Key links to products, services and corporate responsibility information: personal cards, business cards, travel services, gift cards, prepaid cards, merchant services, Accertify, Kabbage, Resy, corporate card, business travel, diversity and inclusion, corporate responsibility and Environmental, Social, and Governance reports.

The post Tap to Pay along the Way: More than a Quarter of US Adults Say They Prefer Contactless Payments for Public Transportation appeared first on PaymentsJournal.

As today’s world becomes increasingly digital, merchants across all industries have seen a dramatic shift in the way businesses and consumers make purchasing decisions. Fueled by the pandemic and rising concerns over the Delta variant, the transportation industry in particular, is going through its own digital evolution. In the last year, digital payment experiences became a critical part of the trucking business. Drivers needed a way to earn money, pay for fuel, and other on-the-road expenses safely while worker shortages and supply chain constraints thinned out margins.

Prior to the pandemic, some players in the transportation industry were trapped in a time capsule of manual processes and paper invoicing, paired with a “why fix what isn’t broken?” attitude from drivers and fleet managers who had decades of experience operating in the same way. Once additional strains were placed on fleets to increase efficiency, technology companies like Comdata, who have roots in digital payment technology, were called upon to accelerate digital transformation.

Today, the need to protect drivers and keep them on the road remains a top priority. As such, the industry is seeing a rise in the use of contactless payments and digital transactions for the delivery of goods. Comdata’s Virtual Comchek, for example, was adopted by several operators to maximize flexibility and accessibility of funds as well as reduce the need to exchange physical checks and documents with suppliers for peace of mind.

The long-term benefit for both drivers and fuel merchants to adopt changes is operational efficiency and cost-savings. Drivers make money from the miles driven, the volume of deliveries completed, and limiting deadhead time in between deliveries. Right now, there are several points of friction in the fuel payment process that delay a driver from continuing their mission to deliver goods. For example, once a driver pulls up to a pump, they are instantly inundated with several prompts and questions before the transaction can even begin. These seem like small interruptions but for a professional truck driver, they add up to cause unnecessary delays. Fueling is a necessity but requires efficiency to keep drivers on the road.

Fuel merchants have begun to embrace the digital efficiency trend by coming out with their own mobile apps that allow drivers to use their fleet card in a completely contactless transaction. Merchants such as Pilot, Loves, TA, and Exxon, have all adopted this technology and leverage GPS tracking to automatically detect the driver’s location for a frictionless payment experience resulting in increased customer loyalty.

Logistical challenges and solutions

The payments industry still faces roadblocks to fully adopting the new digital transformation– the primary one being hardware infrastructure. Even with several merchants making strides to accept digital payments, the technology is still not universal, and the hardware component remains as the biggest obstacle to overcome.  Some contactless payment technologies leverage near-field communication (NFC) or Radio Frequency Identification (RFID) which require extensive and costly hardware retrofit or replacement at each pump.

To illustrate this further, one could imagine an average national fuel chain could have tens of thousands of pumps to retrofit to accept contactless payments.  As it stands, this effort is simply not justifiable in terms of ROI.

In the short term, native apps put out by merchants will remain as the most feasible option as this solution requires only software updates to a central data source. These cloud-based transactions require communication between the customer’s phone and the single computer or cloud process that controls each pump. This is ultimately, a much more reasonable cost for the merchant to take on and implement.

The future of payments

It is safe to say that the effects of digital transformation fueled by the pandemic are here to stay. Contactless payments went mainstream with retail consumers first and it’s picking up steam for long-term adoption within the fleet industry.  The adoption of contactless payments by fleets can help improve operational efficiencies, cuts costs, and reduce fraud – an issue that has plagued the industry for a long time. Just as Uber popularized ambient payments for taxi rides, shifting the focus of the transaction away from the payment experience will allow fuel merchants to redirect the focus of the customer on the seamless experience and build trust and repeat business.

In the next ten years as the transportation industry continues to evolve and keep up with the increased demands for fast and efficient deliveries, the process of manual payments will be a distant memory in the minds of the end-user. Moving forward, the transportation industry will see an evolution that shifts the focus of fueling away from payments and towards getting drivers back on the road as quickly as possible to increase profit margins for drivers and fleet operators alike.

The post Cloud-Based Contactless Payments Are Critical to Supply Chain Efficiency appeared first on PaymentsJournal.

BULVERDE, Texas, September 30, 2021 — Futurex is pleased to announce its CPoC 360 service, a technology platform to help organizations fulfill cryptographic requirements of the PCI Security Standards Council’s Contactless Payments on COTS (CPoC) standard for SoftPOS developers. The CPoC standard allows contactless payment transactions from commercial off-the-shelf (COTS) devices such as smartphones or tablets without the need for additional hardware. Hosted in Futurex’s VirtuCrypt Cloud, the CPoC 360 service is designed to help anyone building SoftPOS applications get to market with less cost and in less time by helping them meet a range of data security requirements of the standard.

This standard accelerates adoption of contactless payments for individuals and small businesses, while ensuring a high level of security. It provides large retailers with news ways of improving the customer payment experience, and is also expected to be widely adopted in developing economies.

Contactless Payments with CPoC: Low Cost; High Level of Security

Contactless payments extend the point of sale beyond the checkout counter. This is made possible with near-field communication (NFC) chips embedded in smartphones and tablets available off-the-shelf. Futurex’s CPoC 360 service, with its transaction processing functionality and high level of security, provides substantial advantages for merchants who need payment agility and scalability. Using Futurex’s CPoC 360 service, consumer data is protected at each stage of the transaction (including cloud payment transactions) by Futurex’s FIPS 140-2 Level 3 and PCI HSM-validated hardware security modules (HSMs).

“Contactless payments, and the emergence of SoftPOS, will give merchants new tools for how they interact with customers, whether it’s queue busting at a department store during the holiday rush or making it easier for micro merchants to sell produce at a farmers’ market,” said Ryan Smith, vice president of global business development at Futurex. “With Futurex’s CPoC 360 service, we are delivering a truly integrated, compliant, and contactless payments service — secure, fast, and flexible — to help SoftPOS developers bring merchant solutions to market in less time and more easily meet compliance requirements.”

CPoC Represents the Next Big Opportunity for SoftPOS Applications The entire Futurex CPoC 360 service is implemented on highly available cloud HSMs in Futurex’s VirtuCrypt cloud, with tools application developers need to achieve compliance with the CPoC standard. Most importantly, it ensures transactions are completed safely and securely.

The CPoC 360 service incorporates the following technologies:

• Device and code signing
• Remote key loading
• FIPS-validated entropy source
• Device attestation
• Transaction processing
• Redundant cloud hardware security modules (HSMs)

As a complete, cloud-based offering that meets the cryptographic and key management compliance requirements of the CPoC standard with a flexible API, CPoC 360 is designed to help anyone building a SoftPOS application get to market with less cost and in less time, with security at every point.

Futurex will unveil the Futurex CPoC 360 service at the Futurex Virtual Summit 2021, taking place today. Click here to register.

About Futurex
For more than 40 years, Futurex has been a trusted provider of hardened, enterprise-class data security solutions. More than 15,000 organizations worldwide, including financial services providers and corporate enterprises, have used Futurex’s innovative hardware security modules, key management servers, and enterprise-class cloud solutions to address their mission-critical systems, data security, and cryptographic needs. This includes the secure encryption, storage, transmission, and certification of sensitive data. For more information, please visit futurex.com.

The post Futurex Introduces CPoC 360 Service to Secure Contactless Payments Worldwide appeared first on PaymentsJournal.

Amazon continues its relentless quest to improve the user experience for anyone buying anything anywhere with the announcement that ticketing company AXS will deploy Amazon One palm readers at the Red Rocks Amphitheatre in Denver, CO.  Amazon made news recently when it deployed its grab-n-go cashierless technology at two full-size Whole Foods locations, where arrays of cameras and sensors track basket contents and allow shoppers to skip the checkout at the end of their shopping trip.  While the grab-n-go aspect of the technology stole the headlines, less talked about is the Amazon One palm reading technology that uses biometric algorithms to verify payment transactions based on a scan of your palm. 

Consumers use the Amazon One kiosks to complete a scan of one or both of their palms, which is then stored as a digital signature, and in this application linked to their AXS Mobile ID.  Customers can attend subsequent shows by simply hovering their palm over the reader for admission to the venue.

“We are proud to work with Amazon to continue shaping the future of ticketing through cutting-edge innovation,” said Bryan Perez, CEO of AXS, in a statement. “We are also excited to bring Amazon One to our clients and the industry at a time when there is a need for fast, convenient, and contactless ticketing solutions. At AXS, we are continually deploying new technologies to develop secure and smarter ticketing offerings that improve the fan experience before, during, and after events,” he added.

The last serious attempt at scaling a biometric payment system was in 2003 by Pay By Touch, a silicon valley start up that developed a thumbprint reader that they deployed in over 3000 locations before folding their operations.  In addition to challenges with the technology, the business model struggled to become profitable since neither businesses nor consumers would pay a fee to use biometric payments as an alternative to existing payment methods.  In that context, it’s unlikely that ApplePay or any other e-wallet would be profitable as a stand-alone company either. 

Unlike e-wallets, Amazon One doesn’t require your phone or other device to communicate your credentials to the reader, simply hovering your palm over the reader is all that’s needed to activate your linked payment credentials.  This technology could easily replace NFC and improve throughput at venue concession stands, amusement parks, stadia, and other applications once the technology matures.  No word yet on what these palm readers might cost once in full production.

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

Photo Credit: Amazon.

The post AXS to Deploy Biometric Amazon One Palm Readers at Entertainment Venues appeared first on PaymentsJournal.

Pulse announced the availability of their latest report on the U.S. debit market. They have been conducting this report for 16 years which creates a great repository of data to follow trends. Certainly, the debit activity of the last year has been anything but typical.

While we all know that more transactions migrated to card-not-present channels, and the number of transactions went down while dollar volumes went up, there were also some data points in this report that aren’t readily available elsewhere. For example, contactless debit card transactions increased six-fold among the financial institutions that participated in the Pulse study, but still represent just 1.6% of all debit activity, so there is plenty of room to grow. 

Here are some more highlights from the 2021 Debit Issuer Study:

Contactless Payments – The rollout of contactless debit cards is well underway, with contactless penetration jumping from 11% of all debit cards in 2019 to 30% in 2020. Of cardholders with contactless cards, issuers report one-third (33%) used the capability. The study projects contactless cards will make up 64% of all debit cards by the end of this year. While the number of contactless debit card transactions at tap-and-go terminals increased six-fold year-over-year in 2020, such transactions still make up less than 2% of all debit transactions.

Mobile Wallets – Approximately 2 billion debit transactions were completed using the three major mobile wallets – Apple Pay, Samsung Pay and Google Pay – in the U.S. in 2020, a year-over-year increase of 51%. Apple Pay expanded its lead over the other two wallets, accounting for a noteworthy 92% of these transactions. The average ticket size of debit mobile wallet transactions jumped from $15 in 2019 to $23 in 2020.

Money Transfers – Account-to-account (A2A) money transfers using debit are booming. These payments encompass peer-to-peer transfers, business-to-consumer transactions such as payments to gig-economy workers, and cardholders funding their digital-wallet accounts. A2A transactions per active debit card per month jumped nearly 60%, building on 100% growth in the prior year. The average active debit cardholder made about one monthly A2A debit transaction in 2020. Peer-to-peer solutions such as Venmo, Cash App and Zelle^®, are the main driver of A2A volume.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Pulse Publishes Its 2021 Debit Card Study appeared first on PaymentsJournal.

I still shop regularly at two stores that use the mag stripe.  Mastercard insists these will be abolished by 2033 and will start being phased out in the U.S. starting in 2027. We’ll see how that works out, I look forward to hearing the swoosh deadlines make as they go past:

“Mastercard is phasing out the use of magnetic stripes on its credit and debit cards over the next decade, as the industry moves towards more secure or convenient alternatives like chips and contactless payments, the company has announced. It says it will be the first payments network to phase out the technology, which dates back to the 1960s.

Mastercard says the transition will start in 2024 when the stripe will no longer be required on new cards in regions like Europe where chip cards are already widely used. In the US, where the adoption of chip payments has been slower, the transition will start in 2027. From 2029, no new Mastercard debit or credit cards will come with a magnetic stripe, and they’ll be gone completely by 2033.

THE MAGNETIC STRIPE WAS INVENTED IN THE 1960S

Magnetic stripes were a huge improvement over the flatbed imprinting machines (aka “knuckle-busters”) that cashiers used to have to use to record card details. But in the 1990s the global EMV chip standard was introduced, which paved the way for cardholder details to be held more securely on small integrated circuit chips embedded into cards. Nowadays, 86 percent of in-person card transactions globally use EMV chips. These are typically authenticated using a PIN, but biometric fingerprint authentication is also emerging as a more secure alternative.

Interestingly, the US hasn’t adopted EMV chips to the same extent as the rest of the world. Last year, the percentage of in-person card transactions using the technology in the country was lower at around 73 percent, despite efforts to encourage adoption. The US has historically been an outlier for a number of reasons, including its size and low fraud rates.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Mastercard Says Mag Stripe Will Be No More by 2033 appeared first on PaymentsJournal.

GoCardless, a firm that describes itself as a global fintech for account-to-account payments, published a report regarding consumers’ current and intended use of credit card and debit cards.  In 2020, with an uncertain future, many consumers in the U.S. shifted their payment habits to prefer debit as they became increasingly concerned about their ability to pay for credit card interest.  The results of GoCardless’ study, which includes results of a survey they conducted, suggest that a majority of consumers plan to continue that practice.

While some purchases, like purchases for vacations and travel, will likely be made on credit cards, the survey finds that overall, debit will be favored, at least in the near term.  Below is an interesting finding that shows the preference for debit and credit plus Buy Now Pay Later payment plans broken out by age group:

                                                                                  Age:     18-25   25-40   57+       All

Would like to decrease use of credit cards:                      84%     84%     63%     76%

Would rather use debit than credit cards:                         89%     87%     54%     78%

Would rather use no-interest installment                         

payment providers (e.g., Klarna or Affirm)

over credit cards:                                                            87%      87%     43%     70%

The firm had this to say about the results:

A majority of Americans (63%) say they are less likely to use credit cards for purchases now than before the pandemic. This number is significantly higher among Gen Z and Millennials, rising to 76% among 18-24-year-olds and 74% among 25-40-year-olds. 

Of those using their credit cards less due to the pandemic, most are doing so out of financial concerns. Reasons include:

-Wary of getting into debt (46%)

-Fear of not being able to pay off the balance each month (27%)

-Concerns about managing the minimum payment (26%)

“The pandemic put people in tough positions financially, and that likely accelerated the move away from credit cards. But this is part of a larger trend, particularly among young Americans,” said Hiroki Takeuchi, co-founder and CEO of GoCardless. “Alternative payment methods such as Buy Now Pay Later are booming, and Americans are also discovering the benefits of account-to-account payments such as ACH debit, which have been popular in other parts of the world for years. Though they’ve dominated in the U.S. for decades, it’s clear that a seismic shift has started, and credit cards will be obsolete in a generation or two.”

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Will Debit Remain King of Cards? GoCardless Publishes a Survey of Consumers’ Card Preferences appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Report: 2021 Annual U.S. Debit Card Market Data Review: Unprecedented Double-Digit Growth

Contactless Payments Seized the Moment in 2020:

• Contactless payments received a lot of attention in 2020 as a means to allow cardholders to keep their distance from potentially germ-infested point-of-sale devices.
• Visa now reports that 70% of card transactions occur at a merchant that can accept a contactless card or mobile wallet.
• 24% of consumers who had not used a contactless card prior to the pandemic have since used one at least once.
• Similarly, 20% of consumers who had not used contactless mobile wallet prior to the pandemic have since used one at least once. 
• This is real growth for contactless, but contactless still accounts for less than 10% of total transactions. 
• In the near term future, Mercator anticipates slow growth for contactless. 

About Report

Dollar volume spent on debit cards in the U.S. rose by 14% as a result of generous government benefits and a change in consumers’ payment preferences that shifted away from checks, cash, and credit cards. This and other aspects of the current market for debit cards are reviewed in Mercator Advisory Group’s report, 2021 Annual U.S. Debit Card Market Data Review: Unprecedented Double-Digit Growth.

”This past year the market experienced a unique environment where consumers sharply shifted their payments towards the use of debit cards and because some of this shift came at the expense of credit cards, this was positive for debit issuers and, at the same time, positive for merchants as credit card transactions are nearly always more expensive to process than debit cards. Issuers are interested in encouraging the continued top-of-wallet position that debit cards have achieved, but competition from fintechs plus likely regulatory changes will make this an uphill battle,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post Contactless Payments Seized the Moment in 2020: appeared first on PaymentsJournal.

The QR code technology gives developers and their merchant communities a frictionless, no-contact payment option for enhanced customer satisfaction and increased sales.

HOWELL, N.J., June 28, 2021 /PRNewswire/ — Cardknox, a leading developer-friendly, omnichannel payment gateway, today announced its Quick Response (QR) code capability, allowing developers and their merchants to deliver a contactless payment option that reduces friction and boosts sales. With QR code technology, merchants can improve customer satisfaction by offering a quick, safe, and secure checkout experience. 

Using the Cardknox API, developers can now generate unique QR codes that can be displayed on their clients’ receipts or point-of-sale devices so that customers are able to make payments with ease. Customers simply scan the QR code with their mobile device and are redirected to a custom online payment form with pre-filled fields.

This latest addition to Cardknox’s extensive omnichannel payment solutions will prove increasingly valuable as customer expectations move toward contactless payment methods. According to a Mastercard global consumer study, nearly eight in 10 say they use contactless payments. 

Cardknox QR code technology supports a wide range of use cases, reflective of Cardknox’s extensive experience in various industries. For example, a restaurant can print a QR code on a receipt for the customer to scan and pay at the table without ever handling a credit card. Or, a healthcare provider can put a QR code on an invoice to direct the patient to a payment form that’s pre-filled with account information and dates of service.

Some unique benefits of Cardknox’s QR code feature include:

• Increased speed of payments: Contactless payments, on average, are at least two times faster than standard payments. With transactions taking place at a quicker rate, merchants will increase customer satisfaction while improving cash flow.
• Accuracy of payment information: Since QR codes can store large volumes of data that are then passed on to pre-filled payment sites, inaccurate data input is significantly reduced.
• Higher security: Developers and merchants can rest assured that payment data is secure since any data processed via the QR code’s web page is hosted on Cardknox’s secure and PCI-compliant payment infrastructure.
• Boosted sales: A brand that delivers fast, secure transactions will garner more sales than one that is slow and arduous.

Mark Paley, Cardknox’s VP of Sales, adds that “Our QR code solution allows ISVs and developers to set up merchants with a touchless checkout experience that consumers are demanding. We’re excited to add this to our lineup of payment features that cater to the rapidly-evolving payment and retail landscapes.”

To learn more about the Cardknox payment gateway and QR code functionality, visit www.cardknox.com/qr-code-payment.

The post Cardknox Launches Quick Response (QR) Code Capability for Developers appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: Commuters Win with the Evolution of Transit Payments

The COVID-19 Pandemic Has Profoundly Influenced Transit Payments:

• Nationally, transit ridership declined by 73% and fare revenues were down 86% in April 2020 compared to April 2019. 
• In April 2021, ridership was still down 50% from April 2019.
• To draw ridership back, transit systems will need to impress upon the general public that mass transit is safe. 
• Frictionless payments, including the move toward contactless, will be a part of achieving these goals. 
• The shift to contactless payments for transit has accelerated due to the pandemic. 
• The use of Google Pay for transit has increased by 30% in 2021, even as overall ridership is just now beginning to recover. 
• Over 80 transit systems in the United States alone accept Google Pay as a payment method. 

About Viewpoint

Transit payments are becoming faster, digital, and contact-free.

Paying for transportation runs the gamut from cash and checks to modern, contactless mobile apps that let riders pre-plan and pre-pay for trips. Financial institutions have an opportunity to support the millions of riders in the U.S. that use mass transit and other forms of transportation that constitute billions of payment transactions annually. The new mobile-based transit payment apps are not only digitizing cash and check payments at the fare box, but extending to mobile payments for other purchases along the journey.

The post The COVID-19 Pandemic Has Profoundly Influenced Transit Payments: appeared first on PaymentsJournal.

A cashless world is still a long way from reality, says GlobalData

The much discussed ‘cashless society’ is coming closer to reality across the world amid changing consumer attitudes and widespread technological adoption. However, while some markets such as Sweden, the UK, and several countries in Asia-Pacific (APAC) have adopted cashless payments quite swiftly over the last few years, many are still progressing very slowly. Different markets have their own unique circumstances and there is no one-size-fits-all model, says GlobalData, a leading data and analytics company.

According to GlobalData’s report, ‘The Cashless World – Evolving Payment Environments in Key Asia Pacific and Western Markets’, the UK and Sweden are two of the developed economies that have adopted cashless payments most swiftly. Countries that are trying to push for further cashless payment adoption can learn from some of the steps they have taken.

Cashless progression in the UK has been due to the comprehensive rollout of NFC payment acceptance and adoption by consumers – specifically contactless payment cards. Meanwhile, Sweden took a very different approach, taking advantage of its existing digital national identification and bank account system called BankID. With around 80% of the Swedish population signed up to BankID, the Swish mobile wallet was able to piggyback on this system to gain a high level of penetration. The tie-up between the two systems encouraged consumers in Sweden to embrace mobile wallets almost instantly.

Arnie Cho, Senior Payments Analyst at GlobalData, says: “In developed markets, consumers are used to payment cards for cashless payments, and they feel no urgency to switch to mobile wallets. However, in developing markets where consumers can leapfrog directly from cash to mobile wallets, they tend to have faster cashless progression due to the fact that mobile wallets are a big leap ahead and often times resolve issues around financial inclusiveness.”

In markets that are still developing, industry and government efforts are mainly focused on the adoption and acceptance of mobile payments, with consumers shifting directly from cash to mobile wallets. The digitization of banking and payment services in developing nations is being pushed to help include financially underserved individuals in the formal economy. In these countries, QR code-based mobile payments are being adopted. For markets in Southeast Asia, QR-based systems are much cheaper than accepting payment cards (and mobile wallets are generally more widely held than payment cards), which encourages merchants to accept cashless mobile payments. Mobile wallets offer a digital payment method to underserved individuals while also helping progress the journey towards a cashless payment environment.

Cho adds: “Over the next few years, the push for cashless adoption and acceptance will continue in many parts of the world. The payment environment is developing at different rates in each country. Each market will progress at its own pace and adopt a path that is most suitable to its unique circumstances. However, in terms of achieving a true cashless society, there is still a long way to go even for countries such as Sweden, as certain segments of society are still dependent on cash.”

The post A Cashless World Is Still a Long Way from Reality, Says GlobalData appeared first on PaymentsJournal.

There has been a lot of investment around healthcare payments in the last 12 months. And for good reason. Payments for healthcare amount to approximately 17% of U.S. GDP and many are still made by check. 

The impact of the pandemic forced a great deal of change in payment practices in this vertical as it has in so many others. U.S. Bank announced the results of a recent study they conducted to understand consumers’ thoughts about the way that they pay for health care. The full announcement can be found here. 

Some of the key findings from the survey conducted in February of this year are as follows:

• Virtual care and contactless payment methods rule: 64% had a telehealth appointment in 2020, and 68% were in favor of expanding access to telehealth when feasible.Device sanitation became more important than ever during the pandemic: 76% of consumers said they were somewhat or extremely concerned about touching payment devices.
• Digital payment options are gaining traction, but there’s room for improvement: Within the last 12 months, 44% paid for their care at the doctor’s office at the appointment, 28% paid via the provider’s online portal, and 23% paid via mobile app. However, more than 32% paid by mail, and 21% called in to pay their bills.
• Patients want more digital options to pay their bills: Nearly half would like their provider to offer the option to pay via contactless credit or debit card, and nearly 60% said their perception of their provider would improve if he/she offered contactless options. Forty-three percent said they would be more likely to use a portal if they could pay their balance and view payment history.
• Many find paying their bills difficult: Nearly a third (28%) said they wished healthcare was more like the banking industry when it comes to payment types and payment options. Nearly a third said their provider’s digital options did not provide enough information about their payment history or balances due.
• Consumers are worried about the security of their data: Consumers continue to worry most about their Social Security numbers and credit/debit card information being stolen, but healthcare is perceived more positively now than in the past relative to other industries.
• Affordability of care is a challenge: 37% consider a medical bill of $100-$500 too expensive, and nearly half of those surveyed were surprised by a high medical expense in the last year. Of those who could not pay for an unexpectedly high expense right away, 38% chose to make recurring payments, and 26% used a credit card.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post U.S. Bank Finds Digital Payments for Healthcare are Gaining Traction appeared first on PaymentsJournal.

Canada’s card payment market, which has been on the rise for the past few years, registered a decline of 2.8% in 2020 due to COVID-19 with reduced consumer and commercial spending. However, with the gradual recovery in economic activities, card payments are expected to rise by 6.8% to reach C$872.3bn (US$683.9bn) in 2021, according to GlobalData, a leading data, and analytics company.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The payment card market in Canada is mature, with each individual holding at least three cards in 2020. Canadian consumers are avid users of card payments, with high frequency of card payments (218 times per debit card in 2020), according to GlobalData.

“Persistent efforts from the country’s financial authorities and banks to ensure a robust banked population, a high level of awareness of electronic payments, and increasingly developing payment acceptance infrastructure have been successful in encouraging consumers to use electronic payment methods for day-to-day, recurring transactions. Though the COVID-19 pandemic has impacted consumer spending, it has also highlighted the importance of non-cash payment methods, pushing the use of card payments in the country.”

The outbreak of COVID-19 has resulted in a significant shift in preference for consumers towards the use of electronic payments-especially contactless payment methods. According to the results of a survey conducted by Payments Canada in November 2020, approximately 47% of Canadians surveyed report using their contactless debit and credit cards more often than pre-COVID. To encourage the shift away from cash, the contactless payment limit was increased from C$100 ($78.41) to C$250 ($196.02).

The overall decline in consumer spending was somewhat offset by a rise in online spending, as wary consumers stayed at home and used online channels for purchases. According to a study from Payments Canada dated May 2020, 28% of credit card users were using them more frequently for online payments compared to pre-pandemic levels. With credit and debit cards accounting for over one-third of total e-commerce payments, the rise in e-commerce will drive the overall card payments market. Mr Sharma adds: “Canada’s card payments market is all set to rebound and grow, with revival in economic activities, rising consumer spending and growing demand for digital payments such as contactless and e-commerce payments. Overall, the card payments market is expected to grow at a compound annual growth rate (CAGR) of 6.1% between 2020 and 2024 to reach C$1 trillion (US$811.6bn) in 2024.”

The post Card Payments in Canada Set to Rebound and Rise by 6.8% In 2021, Says GlobalData appeared first on PaymentsJournal.

Guarantees 1.5X Increase in Loyalty / Payments Program Performance

Philadelphia, PA, June 10, 2021 — Stuzo, the leading provider of intelligent 1:1 loyalty, contactless commerce, and cross-channel customer experience solutions for Convenience and Fuel Retailers, announced today its commitment to delivering outsized Business Outcomes for its retail partners.

Stuzo now offers a 1.5X Performance Guarantee for retailers that make the switch from their current loyalty / payments technology supplier to Stuzo. The money-back guarantee covers:

• A 1.5X lift in the number of enrolled members
• A 1.5X lift in the number of transactions generated

The 1.5X performance baseline is available to new Stuzo customers and is empowered by Stuzo’s Wallet Steering™ System, which includes Stuzo’s Open Commerce^® product suite, Stuzo’s Know & Activate Method, and Stuzo’s Program Management Services.

“We are positioning Stuzo as the company that competes and focuses the most on tangible Business Outcomes,” said Gunter Pfau, Founder & CEO, Stuzo. “Our Wallet Steering System has proven to perform and generate meaningful Business Outcomes at scale. Given our confidence in delivering an incremental 1.5X lift in enrolled program members and transaction volume for our retail partners, we’re putting our money where our mouth is and are offering a performance guarantee. Moreover, we believe our approach will further align us with operators that think similarly about prioritizing customer experiences that drive Business Outcomes over having the longest list of shiny new product features.”

As an example of the level of performance Stuzo delivers, a retailer after having made the switch to Stuzo, recently announced that its number of active rewards program members went up 243% and transactions per day went up 80%.

Stuzo’s journey to build its Wallet Steering System – the basis for its 1.5X Performance Guarantee – has been four years in the making. It began with Stuzo’s release of its Open Commerce Transact product for digital payments, accelerated in 2019 when Stuzo acquired Hatch Loyalty and launched its Open Commerce Activate product for intelligent 1:1 loyalty, and was solidified in 2021 with the launch of its Open Commerce Experience product for cross-channel customer engagement.

Stuzo’s mission – to unlock maximum value for retailers by activating data from its unified loyalty, payments, and customer experience technology – was supercharged in May 2021 when Stuzo received a strategic investment from Longshore Capital Partners.

“The battle for share of wallet is more fierce now than ever,” said Aaron McLean, Chief Marketing Officer, Stuzo. “Retailers are facing greater competition from across categories, such as grocery, dollar, and restaurant/QSR. To win the battle for share of wallet, Stuzo believes it is critical for retailers to set more aggressive goals and have technology partners that contractually guarantee performance against those goals.”

For more information on Stuzo’s 1.5X Performance Guarantee, visit here.

The post Stuzo Commits to Delivering Outsized Business Outcomes for its Retail Partners appeared first on PaymentsJournal.

Consumers are typically impatient and avoid standing in line whenever possible. Enter self-checkout, or self-service, lanes at grocery stores and other retailers, which became especially popular during Covid-19.

While shoppers and store staff were initially wary, this reluctance has all but disappeared. Consumers like the faster checkout and stores are happy to oblige. Even more forms of self-checkout are now available with scan-and-go mobile apps as well as the fully autonomous grab-and-go version.

Now a Canadian study confirms the self-checkout has found wider shopper adoption. Merchants will also find shorter checkout lines and less cash handling are here to stay.

The following excerpt from a Lake Superior News article reports more on the topic:

Only a few years ago, self-checkouts were seen as job killers by many Canadians.

Grocers just didn’t know what to think of self-checkouts. And consumers had a love-hate relationship with them. Some saw them as job killers, replacing humans who desperately needed employment. Others quietly used them, either preferring a speedy exit or simply avoiding unnecessary human interaction, making self-checkouts valuable for anti-socialites.

But with the pandemic, self-checkouts are becoming more popular, and grocers have noticed.

Since the start of the pandemic, 25 percent of Canadians have changed where they typically shop for groceries, according to a recent survey by the Agri-Food Analytics Lab at Dalhousie University, in partnership with Caddle. The survey was conducted in mid-to-late May 2021 and included 10,024 Canadians.

Twenty-five percent is an astonishing number. Of this group, a good portion of respondents admitted that a switch was necessary due to declared COVID-19 cases related to the store they regularly visited. Consumers are clearly concerned about potential exposure to the virus – or anything else, for that matter.

In the same survey, Canadians were asked how they intend to exit the grocery store in months to come. A whopping 53.2 percent of respondents intend to use self-checkouts regularly over the next six months or so. And 60.1 percent of generation Z members (born between 1997 and 2005) and millennials (born between 1981 and 1996) are planning to use self-checkouts more often. Self-checkouts are almost as popular as cashiers now.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Merchant Self-Checkout Winning Over Canadian Shoppers appeared first on PaymentsJournal.

The worldwide chip shortage has been widely reported to be a significant issue for car manufacturers and computer makers.  The supply chain was disrupted during the pandemic, a large manufacturer in Japan suffered a fire and other trade issues all have played a part.

The American Banker highlighted a lesser-known issue which is the supply chain disruption in computer chips is also showing up in the production of cards with EMV compliant chip technology. 

The questions that come to mind are; will the projects to speed up the migration to contactless cards have to slow down, and will financial institutions start to horde chip cards like its toilet paper in early 2020?  Here’s what the American Banker found:

“If a serious shortage hits, issuers could drop cards they consider inactive, which is fine for those that hold a few credit cards or a couple of debit cards, but for those with a single credit or debit card and rarely use them—such as marginalized consumers—they could be left without a card to use,” said Oliver Manahan, director of business development at Infineon Technologies, which provides technology for chip-enabled payment cards.

At the very least, chip-delivery times could stretch out from a few weeks to a few months. To avoid a crisis, issuers and card networks could prepare to fast-track card certification while issuers could strategically manage inventories and optimize card-reissuance.

The Electronic Transactions Association, representing thousands of merchants along with many card networks and issuers, said it’s watching the chip-shortage situation closely.

Wells Fargo is not concerned about the chip shortage affecting its operations.

“Wells Fargo is aware of concerns in the market around a possible global chip shortage, and have placed orders to get ahead of potential impacts on supplies. We feel confident in our ability to generate physical payment cards without disruption while continuing to support our customers’ payment choice,” the bank said in a statement.

Several other card issuers declined to comment on the status of their supply of chips for payment cards.

There’s probably room to prune some cards; the average U.S. consumer has four credit cards, according to Experian’s 2019 Consumer Credit Review. But the timing of sunsetting inactive cards this year could be bad for payment card competition and financial access — including the cards needed to access cash from ATMs — as the economy climbs out of the pandemic.

“Issuers may need to reevaluate what constitutes an active card and drop those they consider inactive,” Manahan said.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post The Chip Shortage Creating Havoc for New Cars Impacts Payments, Too. appeared first on PaymentsJournal.

Ever been to a game and missed the big play because you were standing in a long concession stand line? American Express is helping sports fans get back to the action as fast as possible.

The card company is launching its own self-checkout shop at Brooklyn’s Barclay Center, home of the New York Nets. Similar to an Amazon Go type store, customers will find grab-and-go shopping with a seamless payment transaction. There’s only one requirement—only American Express cardholders can enter, so don’t leave home without it.

The following excerpt from a The Points Guy article reports more on the topic:

Following in the footsteps of Amazon’s contactless stores, American Express has opened up its own check-out free store in the Barclay Center arena in Brooklyn. The store, exclusive to Amex cardholders, offers concessions and merchandise to help fans avoid long lines and get back to the action faster. The store is a partnership between Amex and the sports arena to keep fans safe from COVID-19.

According to the American Express Trendex: Experiences Survey, nearly two-thirds of live-entertainment consumers agree that because of COVID-19, contactless payment options have never been more important to them. And 70% say that having a contactless payment option available would make them feel more comfortable returning to live sports, music and entertainment events.

Card members can tap their contactless Amex card, mobile wallet or insert their card to enter the shop. There may be a $1.00 hold on the card, which will be updated after purchases are completed. Technology tracks movements in the store, with each item having a unique weight that is tracked through weight-sensitive shelf sensors.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post American Express Sets Up Autonomous Checkout At Barclays Center appeared first on PaymentsJournal.

Friday May 21^st 2021: – DIGISEQ announces a breakthrough in payment wearable technology giving consumers the functionality to turn any object of choice into a payment device with a user friendly application on their mobile. The new solution, Rapid Contactless Personalisation (Rcos), is available for any Android and iOS device, delivering Mastercard payment data, via secure tokenisation, quickly and by just downloading the Manage Mii^TM mobile App.

The pandemic has accelerated the pace of adoption of the IoT technology market and contactless applications, which is now forecasted to extend to over 41 billion devices by 2027¹. The Rapid Contactless Personalisation technology means DIGISEQ continues to be the most disruptive player globally. The solution can be used for both prepaid and tokenised accounts.

Rapid Contactless Personalisation enables consumers to pay with any object at millions of acceptance points globally. This is a game changer in the passive wearables market, breaking down the technical barrier to making payments simple and secure on any object, and will be the catalyst for scaling passive wearables for mass market adoption.

Brands, including RosanPay and STISS, are brought to life with digital services as wearables are now payment ready without the need for the manufacturer retailer or card issuer to do anything beyond embedding the NFC chip into the device. Previously, the chip embedded within the wearable would need to go through the cumbersome process of being personalised by the manufacturer or at a retail kiosk before being ready to use.

Rapid Contactless Personalisation puts control in the hands of the consumer as they can provision any wearable with a suitable NFC chip through the Manage Mii application, transforming it into a contactless payment device in place of a card and speeding up the process of purchasing with payments functionality. Manufacturers can now offer payment enabled items for sale from rings to watches and virtually anything at retail outlets and via online stores without any need to be involved in the payment card delivery. The development also offers untold benefits for issuers and banks; previously confined to existing payment methods (Apple Pay and Android Pay), they’re now able to maintain better relationships with their customers and their finances, and begin to distinguish themselves by delivering new and innovative experiences for the user.

Commenting on this industry first, Non-Executive Chairman of DIGISEQ, David Birch, said: ‘The team behind Rapid Contactless Personalisation, Terrie Smith CEO and Colin Tanner CTO, know this space intimately, having led the product development of tokenisation at MasterCard in 2014 that supports solutions such as Apple Pay. They co-founded DIGISEQ to revolutionise services in the contactless wearables and smart objects space and they are delivering on that promise by building a fantastic company which they are now scaling up to deliver mass market payments for the internet of things, in the new contact-free economy.’

David continued: ‘This week Colin Tanner and I filmed a live transaction where I provisioned my own Alioth Pay ring with Mastercard using my own iPhone 12. I’m delighted that together we are making wearables a reality for the mass market.’

Terrie Smith, DIGISEQ CEO, said: ‘The pandemic has disrupted many traditional payment methods, and as a result customers are looking for easier, more seamless ways to purchase goods or services. Rapid Contactless Personalisation is the next step in this process, and will help brands and manufacturers place passive wearables at the heart of the payment ecosystem as the trend develops. We’re confident that the removal of obsolete, cumbersome processes will ultimately lead to greater adoption from brands, and empower customers to pay in safer, more flexible ways.’

‘While consumers are looking into new ways for payment, DIGISEQ’s Rapid Contactless Personalization enables just that. The secure provisioning of payment credentials into a ring, a wristband, a fitness tracker or pretty much any accessory you can imagine, becomes as easy as a tap on a smartphone. Together with Infineon’s expertise in security controller, contactless performance and scalable turn-key payment solutions, the vision of “anything can be a payment thing” is becoming reality’ commented Björn Scharfen, Head of Product Line Payment and Ticketing solutions at Infineon.

The post Digiseq Unlocks the Mass Passive Wearables Market with Rapid Contactless Personalisation on iPhone appeared first on PaymentsJournal.

Commonwealth Bank of Australia (CBA) shared information on the use of contactless payments in this Finextra article.  From 2020 to 2021 the use of contactless wallets through universal apps like Apple Pay, Google Pay and CBA tap-and-pay increased 90%.  

In the midst of the global pandemic, this is not entirely surprising, but what is perhaps a little more interesting is the data showing that mobile contactless is catching up with the use of contactless cards. 

Here are the details:

As of March 2021, more than 40% of the bank’s combined debit and credit card contactless transaction count was via a digital wallet.

CBA’s executive general manager for everyday banking, Kate Crous, says: “We know customers continue to value the ease and security of digital wallets and over the last year we have seen Covid play a part in accelerating the trend. As more customers use digital wallets, they are also using more features in the CommBank app to monitor and manage their spending.”

The bank’s figures also revealed that many Australians have started making higher value purchases via their digital wallets with the average dollar value of a digital wallet transaction increasing from $41 to $44 (credit) and $26 to $29 (debit) over the past 12 months.

“People mostly use digital wallets to pay for everyday expenses such as public transport, groceries, food and beverage, retail shopping and petrol. As customers are becoming more comfortable with paying this way, we have seen the average amount being spent using digital wallets continue to rise, both for credit and debit purchases on average, over the year.”

Based on the current trends, Crous believes that it is likely that digital wallets will be the most popular contactless way to pay by the end of the year.

The post Aussies Opt for Mobile Contactless Payments In-Store appeared first on PaymentsJournal.

Self-checkout became more popular for in-store shopping during the height of the pandemic as many consumers wanted to scan and bag their own items, as well as to avoid checkout lines. Different forms of self-checkout continue to grow including mobile apps to scan and pay, as well as various autonomous checkout versions, such as Amazon Go stores.

Now southwestern U.S. C-store operator, Delek, is partnering with tech developer, Mashgin, on a self-checkout station. Shoppers place items on the tray for the AI-based system to quickly recognize and price the merchandise. Customers then pay via an adjacent POS terminal. This system will work well with small basket items and quick-stop shopping which makes C-stores an ideal target market.

The following excerpt from a CStore Decisions article reports more on the topic:

Delek US Holdings has selected Mashgin to provide frictionless, AI-powered self-checkout technology to 70-plus Delek convenience stores across Texas in by late summer 2021.

Delek customers will be able to walk in, select the items they want, place them on the Mashgin kiosk tray and have all items instantly recognized and simultaneously totaled in less than half a second — without the need to look for and scan barcodes. Customers use mobile pay, credit or debit card to complete their transaction with Mashgin (without touching anything but their purchase and form of payment), and can be on their way in as little as 10 seconds.

“The Mashgin touchless experience in Delek’s DK stores truly supports our mantra of ‘Making Your Day A Little Easier.’ This mantra is prominent on the front signage of all of our new and reimagined stores as a commitment to our brand promise,” said Tony Miller, executive vice president, Delek US. “Mashgin’s autonomous self-checkout is 300% faster, frictionless, and social distance-friendly. Mashgin is the first initiative of a comprehensive innovation strategy Delek is employing to create a unique shopping experience for its customers.”

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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We see it more and more. A consumer taps or hovers a card over the wave-like symbol until the light turns green and the terminal beeps. They’ve just made a frictionless payment using the same secure encryption methodology as an inserted EMV card in a fraction of the time.

Consumers may have just adjusted to insertion a couple of years ago, but the pandemic accelerated contactless card migration at a rapid rate. 451 Research found that 86% of consumers plan to keep making contactless payments even when the pandemic is behind us.

Many industry experts have written about the benefits of dual-interface EMV before, but now we have more consumer data to confirm them. And it didn’t take nearly as long for consumers to embrace the contactless shift as it did for inserted EMV cards. Contactless cards’ ease of use leads to an improved customer experience and a transactional lift, which results in higher interchange for financial institutions.

Why Embrace Contactless Cards

Whereas fraud liabilities incentivized financial institutions to shift from magstripes to inserted EMV chips, contactless cards may not seem like a critical need. In CSI’s recent 2021 Banking Priorities Executive Report, only 15% of executives listed it as their highest payments priority.

However, contactless cards can be a revenue generator for financial institutions. They also continue to rise in popularity, especially among younger consumers. Institutions that embrace contactless can therefore maximize and better monetize their card programs while simultaneously benefitting consumers and merchants. Consider the following trends that emerged in Visa’s research. With contactless cards:

• Consumers benefit from the speed and convenience of transactions. Many consumers use digital wallets, but a significant number either don’t have a smartphone or are more comfortable with the habit of using a physical card.
• Issuers benefit from higher interchange revenue with each tap. Consumers also tap contactless debit cards at a higher rate than credit cards (4.9% compared to 2.8%), and CSI found that consumers use contactless cards approximately 3-4 times more per month.
• Merchants benefit from additional transactions (consumers spend roughly $125-$200 more per month) and the speed that mitigates customer checkout bottlenecks. As a result, 95% of new terminals shipped have contactless capabilities.

While digital wallets make up a large portion of contactless sales, contactless card users are distinct from mobile wallet users. Over 90% of cardholders who have tapped in stores via card have never done so by digital wallet. This trend suggests that consumers favor digital wallets like Apple Pay for eCommerce but cards in physical stores.

How COVID-19 Accelerated the Demand for Contactless

A few years ago, the transition to inserted EMV debit cards presented a groundswell in the payments space. But adoption in the United States was slow-moving. According to Visa, the technology saw just a 1.6% increase in payment volume in 2015. However, by 2019, EMV card payments represented 99% of overall payment volume in the United States.

Dual-interface EMV has been a different story. The United States initially lagged due to higher costs and low consumer demand. But as awareness of its convenience and security spread, so did the demand. By 2019, these contactless-enabled cards had already begun to boom.

During 2020, the COVID-19 pandemic amplified contactless card appeal as consumers reframed spending habits and sought ways to decrease cash and physical contact. Aite found that 1 in 5 consumers made a contactless payment for the first time during the pandemic. 56% of them were from contactless cards.

Throughout the pandemic, contactless debit cards have become critical for everyday non-discretionary spending. Through the uncertainty of a global pandemic, debit outperformed credit overall. This trend partly stems from consumers preferring to spend money they already have rather than the money they may have in the future.

In all likelihood, many of the habits and preferences formed throughout the pandemic will continue once it subsides, as consumers have experienced contactless firsthand.

“COVID-19 has been more effective at bringing awareness to the advantages of a contactless checkout than any marketing campaign could have ever hoped to achieve. Consumers are looking for opportunities to use contactless and merchants want to respond with both mobile and card-based solutions to meet the broadest audience possible,” said Sarah Grotta, director of debit and alternative products advisory service at Mercator Advisory Group. 

“Financial institutions have moved up their contactless card issuance projects to meet their customers’ and members’ needs while also hoping to capture more transaction volumes as users opt for contactless over cash at the point-of-sale,” she added.

Continued Retailer Holdouts and Promising Trends

Presently, contactless terminals enjoy roughly 67% market penetration overall and are poised to expand. For some issuers, that majority isn’t persuasive enough, as popular merchants such as Walmart have not yet installed contactless terminals in their stores.

However, trends from previous major retailer holdouts suggest that even those businesses could soon follow suit. Many that joined the Merchant Customer Exchange (MCX) to provide their own payment scheme were met with controversy and a consumer push to diversify their payment capabilities.

As consumer frustration seemed to hurt the bottom line for companies like Kroger, many began to enable payments via EMV contactless cards and digital wallets such as Google Pay or Apple Pay. Best Buy, Walgreens, CVS and eventually Target all eventually conceded to consumer pressure.

“Contactless payments are now mainstream. COVID-19 health and safety measures raised both merchant and consumer awareness of contact-free ways to pay. While the pandemic accelerated contactless in 2020, payment providers and merchants now see that no-contact POS transactions can be a differentiating strategy to engage and expand their customer base through 2021 and beyond,” said Raymond Pucci, director of merchant services at Mercator Advisory Group.

Walmart remains a holdout in the United States, as the company continues to promote Walmart Pay. However, after a concerted effort, Walmart locations have begun to accept contactless cards across Canada, where contactless has become the dominant form of in-person payment. Walmart’s branded Capital One credit card is also contactless enabled, which could be a promising sign for the future.

With shifting consumer preferences and habits, experts expect contactless payments to increase. Until such time, dual interface users can still insert the chip to transact as usual or use its magstripe as a last resort for those terminals that do not provide contactless capabilities.

Contactless Debit Cards Moving Forward

Perhaps more telling, merchants in everyday spend categories are adopting contactless-enabled POS terminals at a faster rate. According to Visa, 73% of face-to-face transactions occur at a contactless-enabled merchant, with exceedingly high adoption at quick service restaurants, convenience stores and grocery stores. This is fantastic news for issuers and consumers, as these “everyday spend” merchants have seen the most debit card use over the past year.

Also, many gas pumps that haven’t already done so will finally implement EMV-accepting hardware to eliminate magstripe fraud. These terminals will almost universally add contactless capabilities.

Concerning the cards themselves, Aite found that 52% of all payment cards are contactless, and forecasts 56% by 2022. Card issuers can meet the growing consumer demand by embracing contactless EMV cards and promoting their availability and use.

Refer to CSI’s Digital Payment Trends in Banking white paper for a wider examination of the latest payments trends, and the role each plays for financial institutions.

Matt Herren is the Director of Payment Strategy at CSI. With a strong focus on emerging technologies and how they apply to the financial industry, Matt has led CSI’s effort to drive innovation in the payment space. In his role, Matt has worked to enhance customer experience and helped direct innovative product offerings to increase bank profitability, allowing banks to realize industry-leading results and maximize program performance.

The post Contactless Cards: Displacing Cash, Improving Consumer Experience appeared first on PaymentsJournal.

Research released by Paysafe shows almost 60% of North Americans and Europeans tried a new payment method in the last 12 months

May 5^th, 2021. Houston, Texas – More than eight in ten (86%) of U.S., Canadian and European consumers say that their payments habits have changed since the start of the pandemic, with 59% trying a new payment method for the first time, rising to 77% in the 18- to 24-year-old age group. That’s according to new research released by leading specialized payments platform Paysafe (NYSE: PSFE), in which 8,000 consumers were surveyed for the company’s latest Lost in Transaction report.

The research*, which was conducted on behalf of Paysafe by Sapio Research in March and April 2021 and covers the U.K., Germany, Italy, Austria, and Bulgaria as well as North America, explored changing consumer behaviors towards payments. Unsurprisingly, the key driver cited by respondents for adopting new payments methods was due to being unable to make in-person payments (33%), but the need to track spending more closely (26%) and concerns over fraud (25%) also came up as strong trends.

In terms of awareness, more than a third (38%) of consumers say they are now more informed of the wide range of different payment methods available to them than they were prior to the pandemic, and almost a third (31%) are now more likely to use an alternative payment method when making an online purchase, rather than just automatically reaching for their credit or debit card.

That said, card payments continue to be the dominant online payment method overall, with more than half of global consumers having used a debit (54%) or credit (51%) card to complete a transaction in the past month. Against this backdrop, however, digital wallets are emerging as the most popular alternative payment method (APM) with 43% of respondents using them globally in the last month. While monthly usage is significant in the U.S. (40%), it rises as high as 47% in the U.K. and 55% in Italy.

Overall, 32% of consumers globally are using digital wallets more frequently than prior to the pandemic. Prepaid cards are being used more frequently by 13% of global consumers, with their popularity higher in the U.S. (16% of Americans). And 8% of Europeans and North Americans are using online cash, or eCash, solutions more regularly, with specific U.S. usage again slightly higher (11%).

The research also reveals that having a choice of payments at the online checkout has been a key differentiator, even more so during the pandemic, with more than half (53%) of global consumers agreeing they would not return if they suffered a poor experience or lack of choice. Although a large proportion of consumers (63%) seek tighter payment security measures, the number of consumers prioritizing convenience has increased by 110% in the past 12 months.

When it comes to in-store shopping, 43% of consumers also noticed which retailers made efforts to upgrade their checkout in reaction to the pandemic, with 28% saying that businesses did not react quickly enough to make it safer. However, 48% of global consumers and half (50%) of Americans reveal they are planning to shop in stores as frequently as they did pre-COVID-19, highlighting the importance of an updated checkout for offline retailers too. Offering contactless payments in-store appears essential, with 28% of Americans refusing to shop at retailers without tap-and-pay.

And, indicating the perhaps surprising comeback for cash after the pandemic, 50% of global consumers plan to make at least 25% of their transactions using cash in the future. Leading European countries and Canada, a third (33%) of Americans will avoid stores where they can no longer pay with cash.

Philip McHugh, CEO at Paysafe, commented: “Consumers have adapted and gotten to grips with alternative payment methods over the last year, partly because they had to due to the pandemic.  Through our ongoing research into payment trends, we continue to witness that COVID-19 has been a real accelerator in the adoption of alternative payment methods and choice is everything.  The good news is, it’s now easier than ever for merchants to integrate into a payments platform and access a huge range of payments methods via one connection.”

McHugh added: “Concerns around payments security have also been a constant theme coming through in our research, and consumers are increasingly alert to the threat of cyber risks, so it’s not just about offering choice, it’s also about ensuring peace of mind from a security standpoint, coupled with a frictionless experience.  No doubt about it, this has been a tough year for retail, but we’re also seeing many merchants – both online and offline – swiftly adapt to these trends and modify their payments offering to remain competitive; the ones that succeed to do this will be the ones who emerge from this crisis stronger than before.”

To read additional key takeaways from the research, as well as further analysis, read the full report.

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Macy’s mobile shop and pay self-checkout app is proving to be a hard sell to store employees. Other retailers that have self-service methods may be facing some opposition as well. Regulatory issues and labor grievances have surfaced related to cashless store operations, employee staffing levels, and compensation which need to be addressed by retailers, as the emerging checkout technology and hybrid shopper behavior changes the retailer-consumer relationship.

Cashless restrictions can be solved fairly easily as autonomous shopping stores do have in-store employees for stocking and customer service, and they can have a staff member accept cash or a SNAP EBT card. Crediting in-store mobile app sales to commissioned employees will not be as straightforward since collective bargaining agreements (CBAs) will have to be re-negotiated and then the related technology changes made as required.

Self-service checkout is here to stay and there are different iterations for retailers to leverage. At Mercator, we segment self-service into: 1) express self-scan, bag, and pay stations (usually adjacent to regular checkout lanes; 2) scan and pay mobile devices (provided by store); 3) scan and pay mobile apps (from customer phones) 4) order and pay kiosks (usually in restaurants); 5) autonomous checkout, which is the Amazon Go model, now also found from several tech developers and retail partners that are operational or in testing.

The following excerpt from a CNBC article reports more on the topic:

When Macy’s rolled out a new self-checkout feature in its mobile app in 2018, the department store touted how customers could browse stores but skip the hassle of the checkout line. For some store associates, however, that set off alarm bells — and concerns that it would jeopardize their jobs or dock their pay.

Three years later, a union that represents Macy’s employees has scored a victory in challenging the tech-based approach and how it cuts them out of commissions. An independent arbitrator ruled last week that Macy’s violated its bargaining agreement and said the company must exclude departments, such as men’s suits and cosmetics, that have commission-based pay from self-checkout.

The grievance was filed by about 600 employees at six stores in the Boston area and Rhode Island who are part of the United Food and Commercial Workers. UFCW represents 1.3 million workers, including over 11,000 Macy’s workers in major cities including Seattle, San Francisco and New York City.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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In a press release from Amadeus, the Spanish travel technology company, the company summarizes a recently conducted business travel survey (accessible through a link) that suggests business travelers are eager to get back on the road, but some things should be in place before they do. 

Now that vaccines are more widely available, and expectations growing for international travel to more fully return by year-end 2021, companies with existing or new travel programs, if they have not already done so, should be thinking about how to improve the employee travel experience. 

Through ongoing corporate card research, we have been advising about various employee travel preferences for years, so there are some repeatable preferences and now some new ones in the pandemic era.  So the desire is there and the survey provides some insight as to what business travelers miss most, which will likely resonate with readers who have been cooped up for a year+. 

87% of frequent travelers are keen to travel again for business.

One of the areas that companies have been focusing on for business travel is the duty of care concept, which implies a legal requirement by definition but when applied to business travelers, it means that companies are mitigating risk and ensuring travel safety for their employees. This has been a focus for years but the indicated survey says that employees now expect certain things to be in place for them to feel comfortable returning to business travel. 

These things include COVID-19 medical coverage, accurate and available information about destination country restrictions, and a contactless hotel check-in procedure, among other things.  We have been advising about demand for contactless payments in corporate cards for years, which pre-pandemic had a surprisingly tepid rate of growth.

That has changed as demand for mobile solutions will be high, which will likely include a high instance of virtual cards.  Another area needing improvement is one that has been causing traveling employee dissatisfaction for years; which is the expense management process. The survey indicates that employees spend way too much time on the expense reimbursement process and often lose money in the filing due to lost receipts.  Frankly, with today’s technology, this should no longer be an issue. 

Interested readers should link out and take a look at the survey.

‘Rudy Daniello, Executive Vice President Corporations, Amadeus commented: “Our findings show that travelers are eager to travel if the right safety measures are in place, which is hugely encouraging for the business travel industry. Whilst vaccination will take time, there are a range of steps corporations and travel companies can take now to protect and reassure travelers….New innovations in mobile payment and expense are coming online that allow travelers to pay contactlessly using their mobile, directly from the company bank account. This removes the need to touch payment terminals or handle paper receipts whilst expense reporting is automated in the background. Travelers can also access information relating to travel restrictions, COVID-19 prevalence and hygiene factors at the point of booking. While it may be difficult now, technological innovations can make business travel even better than it was in 2019.” ‘

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

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Credit union trade group recognizes Ascend’s expertise to creatively reach new and potential members

MURFREESBORO, Tenn., April 23, 2021 – Ascend Federal Credit Union, the largest credit union in Middle Tennessee, announced today that it has won two Diamond Awards from the Credit Union National Association (CUNA) Marketing & Business Development Council. Ascend was named as the “Category’s Best” winner in the “Email – Single or Series” section and was also recognized in the “Video (Non-Commercial) – Single” group.

CUNA’s Diamond Awards recognize excellence in marketing and business development in the credit union industry. Ascend competed against the country’s largest credit unions (assets of more than $1 billion).

Ascend’s email campaign focused on welcoming new members and increasing the use of key services the credit union offers, including online banking, Ascend’s mobile app, money management budgeting software, financial education offerings, card control security app, financial calculators, contactless digital payment options and more. The series starts the day after a member opens an account.

The video campaign was part of a larger Labor Day giveaway campaign, where Ascend gave away a grilling package – including a Big Green Egg grill, Orca cooler and more – to one member who entered the contest on Facebook. This video features a cooking lesson with the senior kitchen manager at Nashville’s famous Puckett’s Grocery and Restaurant. The video reached 75% of its target audience (more than 12,000 individuals) and was viewed by 4,303 people.

“It is an honor to be recognized by CUNA for our commitment to serving new members and our community,” said Leslie Copeland, chief strategy officer for Ascend. “Ascend is dedicated to building a positive relationship with new and potential members and to introducing them to our company, culture, mission and the benefits they can enjoy. Both the email and video campaigns increased engagement and enhanced our brand awareness, making it a ‘win-win’ for Ascend and our members.”

“The Diamond Awards competition is the most prestigious competition for excellence in marketing and business development in the credit union industry,” said Amy McGraw, Diamond Awards chair and VP marketing/chief experience officer at Tropical Financial CU. “Credit unions that receive these awards should be extremely proud of their accomplishments and know that their work represents the very best examples of creativity, innovation, relevance and execution.”

CUNA’s Marketing & Business Development Council celebrated the 2021 Diamond Awards by announcing winners in 35 categories through a series of daily virtual ceremonies. Judges reviewed 1,278 entries during this year’s competition. Six credit unions won Best of Show Awards, 86 won Category’s Best Awards and 264 won Diamond Awards.

Click here for a full list of this year’s award winners: http://www.adque.com/CUNA/2021/CUNA_Menu.html

About Ascend Federal Credit Union

With more than 229,620 members and more than $3 billion in assets, Ascend Federal Credit Union is the largest credit union in Middle Tennessee and one of the largest federally chartered credit unions in the United States. Based in Tullahoma, Tenn., the member-owned financial institution offers banking, loan, retirement and investment services from its 28 branches, more than 55,000 free ATMs worldwide, online banking portal and mobile app. The credit union’s mission is to serve by offering financial literacy education and giving back to its community in a variety of ways. Ascend is federally insured by the National Credit Union Administration. For more information, visit ascend.org.

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22nd APRIL 2021, CARDIFF: MYPINPAD, a global leader in secure personal authentication solutions has received certification from the Australian Payments Network (AusPayNet), the self-regulatory body for Australian payments. Australian payment regulations stipulate that all new card-acceptance technology must undergo an evaluation to assess the security, integrity and network operability and be approved by AusPayNet prior to market deployment. Today’s announcement makes history as the first Payment Card Industry (PCI) Security Standards Council (SSC) Contactless Payments on Commercial off-the-shelf (CPoC) Solution to attain approval for Australia.

The certification will enable MYPINPAD to deploy its software-based payments solutions to thousands of merchants in the region.

This is a significant step in mobile payment acceptance for Australia. By transforming mobile devices into payment terminals, all types of merchant including micro and SMEs can now securely accept card payments on everyday mobile devices, particularly in situations where cash may have historically been the only accessible payment option.

As of December 2020, Australia had 923,691 active POS terminals, a slight decrease from the same time in 2019. This decrease, however, was caused primarily by the impact of COVID-19 lockdown, making many terminals inactive. With MYPINPAD set to deploy its contactless (CPoC) solution across Australia, this number is expected to increase.

MYPINPAD was the first company globally to have its CPoC solution certified by the PCI SSC.

Morten Hofstad, Head of APAC at MYPINPAD comments: “As the first provider in the world to be globally certified by PCI to accept payments on smart devices without additional hardware, we’re delighted to mark another milestone by being the first to be certified in the incredibly dynamic Australian market.

The APAC region is a hub of innovation for payments and we’re thrilled to gain certification from AusPayNet. We are about to unlock opportunities in seamless payments and customer experience for thousands of merchants in the region and have our first six deployments lined up to go live this year, and we look forward to many more in 2022.”

To discover more about this transformational technology, visit the MYPINPAD website: https://mypinpad.com/

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Self-service checkout continues to gain new merchants. Tech developer AiFi adds another retailer to its autonomous shopping base by partnering with Choice Market in Denver. AiFi now has retail installations across four continents. Contactless checkout found favor with in-store shoppers during the pandemic’s surge in 2020.

Now autonomous checkout will see noticeable expansion in 2021 with several developers having operational systems. C-stores, grocery stores, and unattended retail such as airport shops are target verticals for this checkout technology.

The following excerpt from a Chain Store Age article reports more on the topic:

A retailer that combines the selection of a natural grocer and the footprint of a c-store with the newest technology is looking to reinvent convenience with the opening of its new location in Denver.

Choice Market has opened its largest and most high-tech location to date: a 5,000-sq.-ft. store on the ground level of an upscale high-rise apartment building in Denver’s Golden Triangle neighborhood. Choice Market, which operates four stores (all in Denver), plans to expand in Colorado and beyond in 2021.

The newest Choice Market offers a totally contact-free shopping experience (for those that want it). Using the brand’s Choice Now mobile check-in and cashierless checkout technology (powered by AiFi), shoppers scan the app upon entry, pick up their groceries, freshly prepared meals and other items and then leave without a traditional checkout. A receipt is sent directly to the customer’s mobile device moments after they exit the market. The frictionless-less technology utilizes hundreds of ceiling cameras. 

“This is the largest camera-only store that we’ve launched in the U.S. to date and we’re excited to partner with Choice to bring seamless shopping to its customers,” said Steve Gu, co-founder and CEO of AiFi. 

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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This release in Benzinga discusses the New York-based 2019 startup called Ramp, which has reached unicorn status at $1.6 billion with a new capital infusion of $115 million from various sources.  The company profiles itself as a technology company that develops corporate cards designed to save money for businesses. 

So this very new firm seems to have climbed the valuation ladder fairly quickly.  Ramp is a sponsored issuer of corporate cards, with new and better ways of delivering cost savings in such programs.

‘The round brings total venture and debt financing raised by Ramp to $320M. With a valuation of $1.6B, Ramp has become the fastest growing New York based startup in history, and the first to surpass a $1B valuation in under two years from incorporation….”Ramp has quickly become a key player in the financial services ecosystem by challenging business practices and assumptions that have existed for nearly 50 years,” said Dan Sundheim, Founder and Chief Investment Officer of D1 Capital Partners. “The company attracts new customers by providing value and savings, and empowers CFOs and finance teams to operate at a higher level of efficiency. We look forward to supporting Ramp during its next phase of growth.”  ‘

Now the interesting thing is that due to the lockdowns and lack of business travel during most of 2020 and into 2021, corporate card spend across industries has declined substantially, at least in the traditional ways that corporate cards are used, for T&E that is.  So Ramp seeing large growth in spend (from a smaller base of course) is bucking the trend. 

Since we have not received a detailed briefing we don’t know specific reasons, but a quick view of the website suggests that Ramp is targeting other startups with their pitch and product, and therefore is seeing fresh spend.  The appeal of mobile apps, virtual cards and automated expense management has legs, especially with demographic turnover in the workforce.  

We also expect that some of this volume is associated with MRO spend that would normally be categorized as P card spend.  However, still impressive.

‘Over the past six months, transaction volume on Ramp has grown by approximately 400%, and is nearing annualized transaction volume of $1B. Whether at fast scaling unicorns like Ro, Better, ClickUp, Applied Intuition and more, or at more traditional businesses seeking higher financial efficiency, Ramp has quickly become the spend management platform of choice. A third of Ramp customers switched over from American Express, and more than 90% of customers adopted Ramp as a comprehensive spend management platform, replacing Expensify, Concur or manual solutions. Ramp has saved its customers over $10M through its proprietary software that identifies ways for businesses to spend less on purchases and an additional 5.4 days a month in administrative work for finance teams.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Ramp Raises $115M, Reaches $1.6B Valuation as Fastest Growing Corporate Card appeared first on PaymentsJournal.

Hunter is among several retailers tapping payment leaders to offer a convenient, secure and contactless budgeting tool for consumers

SAN FRANCISCO, April 8, 2021 —  Afterpay (ASX:APT) the leader in “Buy Now, Pay Later”, and Adyen, (AMS: ADYEN), the global payments platform of choice for many of the world’s leading businesses, are joining forces to offer Afterpay’s leading BNPL service to retailers, kicking off with Hunter, the premium British footwear brand.

Leading iconic British outdoor lifestyle brand, Hunter, is among some of the first retailers to offer Afterpay with Adyen.

“We wanted a way of offering our customers more flexibility through payments, as we know giving our customers choice to pay in a way that suits them, drives on-site conversion” said Bryony Longden, senior eCommerce manager for Hunter. “By offering Afterpay through Adyen, we were able to implement this new payment method quickly and effectively to offer a seamless checkout experience. The ability to split payments really helps to make higher price point items accessible to our customers. ”

Hunter can now offer Afterpay, known as Clearpay in the UK – the popular service which allows customers to get their items right away and pay in four installments, without the need to take out a traditional loan or pay upfront fees or interest. The service is completely free for consumers who pay on time. Afterpay now has more than 13 million customers in the United States and close to two million shoppers in the U.K.

With Afterpay, retailers attract a growing segment of the population who prefer to pay without incurring traditional credit-style debt, interest or fees. For this reason, many retailers offering Afterpay see an average increase in conversion of approximately 22% – as well as increased basket size, higher customer satisfaction and repeat customers.  More than 90% of Afterpay transactions are made with debit cards.

“BNPL has changed the retail industry – as young shoppers prefer to use their own money to buy items they need and want – instead of using credit cards which often lead to revolving debt with interest and fees,” said Ben Pressley, SVP of Global Sales Strategy and Operations at AfterPay. “We are so excited to kick off our partnership with Adyen and Hunter to offer a payment solution that delivers real benefits to consumers and retailers alike.”

Merchants of Adyen can offer Afterpay in the UK, the United States, Canada, Australia and New Zealand to their customers.

The post Afterpay and Adyen Partner to Deliver Flexible Payments with BNPL appeared first on PaymentsJournal.

• Less than a year since contactless limits increased across Europe, Visa has hit one billion additional touch-free transactions, 400 million of which took place in the UK.
• Consumers and merchants are increasingly turning to contactless payments as a secure and seamless way to shop – two thirds (65%) of consumers say they would prefer to use contactless payments as much as, or more than, they do currently.
• Contactless remains one of the most secure and convenient ways to shop with Visa following the limit increasing in some countries by as much as 50% last year, and the announcement that the UK contactless limit will increase to £100.

LONDON, 7 APRIL 2021 – Visa today announced that it has processed one billion additional touch-free payments[1], where previously consumers would have needed to enter their PIN, as consumer confidence in contactless payments continues to grow. This milestone has been reached in less than a year since contactless payment limits were increased in 29 countries across Europe in response to the Covid-19 pandemic.

The growth of contactless payments has been a key trend during the pandemic, as touch-free payments have gone from being a convenience to a necessity for both consumers and retailers. Research from Visa shows that two-thirds (65%) of consumers globally would prefer to use contactless payments as much as, or more than, they are currently[2].

Charlotte Hogg, Chief Executive Officer, Europe at Visa, commented: “The demand for touch-free payments indicates that contactless has become the norm for European consumers and retailers. Contactless payments are popular because they combine speed and convenience with security. Indeed, contactless cards experience among the lowest fraud rates of any payment type and in countries where contactless payments are widely used, fraud at the point of sale remains at historic lows.

“Today’s milestone demonstrates how consumers and retailers now rely on digital solutions to make everyday payments. Enabling contactless payments will be key to Europe’s economic recovery and while raising contactless limits alone won’t revitalise the European economy, it is a step in the right direction, giving consumers the confidence to spend, and providing shops, restaurants and other retailers a boost just when they need it most.”

Growing demand for contactless transactions is evident across Europe, with over 80% of in-store Visa payments now contactless[3]. In France and Germany, the number of contactless transactions has increased by two thirds and almost half respectively year-on-year[4]. Of the one billion transactions, 400 million took place in the UK[5], and further growth can be expected given the announcement that the UK contactless limit will increase to £100 later this year.

The popularity of ecommerce is also surging across Europe, with over 15 countries experiencing a 40% or higher increase in ecommerce transactions in December 2020 versus the year before[6].

With many businesses having to operate under restrictions and keep up with changing consumer behaviour, merchants are increasingly moving to online operations and embracing digital and contactless payments. Visa is working closely with its clients and partners to digitally enable over eight million small businesses across Europe, helping them adapt to enable customers to shop the way they want.

Contactless remains one of the most popular and secure payment methods for Visa customers and will be crucial to Europe’s economic recovery when restrictions lift and shops reopen.

[1] VisaNet data

[2] Visa Back to Business Study 2021

[3] VisaNet data

[4] VisaNet data

[5] VisaNet data

[6] VisaNet data

The post One Billion Additional Touch-Free Visa Payments Made As Consumers Embrace Contactless Commerce appeared first on PaymentsJournal.

Everyware, a leading contactless payments and customer engagement solutions company, announces becoming a Technology Partner of Cybersource and Authorize.net, both Visa Solutions. The partnership with these two Visa Solutions will power the payments processing for small and medium businesses (SMBs), while Everyware’s platform delivers seamless two-way communication with secure payment options, to help customer relationships and boost revenue goals. Cybersource will power enterprise level businesses while Authorize.net powers SMBs.

These integrated solutions will enable businesses to provide customers a touchless experience, meaning a safer payment and communications process during the COVID-19 pandemic, to support the modern future.

Here’s how it works: A customer orders items from the local shop and opts (due to COVID-19 safety precautions) for curbside pickup. When the order is ready, the shop texts to let her know, she arrives at the store and texts “I’ve arrived – Waiting in Parking Spot 1”,  to which the shop text-replies “Coming right out” along with a secure payment link. The customer pays from the comfort of her vehicle, never having to physically enter the store, pull up an app, hand off, or even tap a credit card. The communication and payment by SMS are supported by Everyware while the payment processing, fraud management, and other valued payment gateway features are handled by Authorize.net for small businesses or Cybersource for enterprise.

Veterinary clinics,  medical practices and other types of local service providers are ushering in digital and touchless solutions as customers have grown to expect this type of digital transformation since the pandemic began. With these solution offerings, businesses will be able to provide a suite of essential touchless service options paired with paying by text, two-way messaging, chatbot features and more to drastically improve customer service and communications.

“Becoming a Technology Partner of Cybersource and Authorize.net provides a complete packaged solution to local businesses who need to offer innovative, touchless communication and payment options due to high demand,” said Everyware Founder and CEO Larry Talley. “Pay by Text and SMS communications is a safe, simple and easily adaptable technology for any industry. The partnership is a win for everyone involved.”

Consumers’ digital shopping channel use in the U.S. has increased by 60% since March 2020, and those businesses offering digital features such as touchless payments that prioritize consumer convenience were viewed as the most satisfying in the eyes of consumers. (Source: Global Shopping Index, a collaboration between Cybersource and PYMNTS.com – U.S. and SMB Editions). SMBs often don’t have the tools or ability to afford building a mobile app or maintaining effective customer communications. Combining these solutions will allow businesses to connect with customers at a crucial time while collecting payments with ease.

New and innovative user experiences powered by Everyware and Visa Solutions’ Authorize.net and Cybersource, are packaged to empower and modernize businesses well beyond 2021. Everyware’s platform is HIPAA compliant, PCI certified and conveniently contactless, which keeps everyone and their data safe. Users don’t need to download a mobile app or log into a portal. Automated text messages can be easily set up to alert customers to news and offers as well as a tool for immediate SMS communication.

For more information, visit Everyware at Everyware.com or follow on Facebook, Twitter, Instagram and LinkedIn.

The post Everyware® Announces Partnership with Visa Solutions: Cybersource and Authorize.net appeared first on PaymentsJournal.

End-to-end solution, including contactless order and pay capabilities, protects guests, staff

ATLANTA – Mar. 30, 2021– There’s a saying among employees of California-based JINYA Ramen Bar: “No ramen, no life.” And at the onset of the COVID-19 pandemic, the JINYA team quickly realized: “No contactless service, no business.” So, the restaurant turned to NCR Corporation (NYSE: NCR), a leading provider of software and technology that runs restaurants, to enable the digital transformation of its 37 North American locations.

Specifically, JINYA wanted to improve the customer experience by adding digital ordering and contactless payment options, including the use of a QR code.

To date, half of JINYA’s locations have transitioned to NCR Aloha Essentials, a bundle of software, hardware and services that includes 24×7 support, secure contactless payments, handheld point-of-sale (POS) capabilities and an eCommerce platform. The remaining locations are in the process of transitioning.

“The investment in Aloha Essentials is saving us a substantial amount of money, and the franchisees are happy with the profits and customers it’s helping them gain,” said David Huang, senior manager of IT for JINYA Holdings. “It’s like getting a major facelift that provides our customers with an easy-to-use interface and a much better, safer experience.”

With NCR Aloha Essentials, JINYA has online ordering capabilities that can be used for both takeout and contactless order and pay in the restaurant using a QR code, which has been a big hit with customers. For those picking up their orders, the solution has helped reduce wait times significantly.

Since the pandemic began, digital ordering channels have skyrocketed throughout the restaurant industry. In 2020, NCR processed more than 354 million digital orders through its platform.

“Restaurants like JINYA Ramen Bar were smart, knowing they needed innovative technology to pivot to quickly meet diners’ and employees’ changing needs,” said Dirk Izzo, president and general manager, NCR Hospitality. “We’re glad that our end-to-end solutions enables them to run their operations – delivering the ultimate ramen noodles while creating a safe, memorable customer experience.”

Click here for more information on contactless technologies from NCR.

NCR is a full end-to-end provider from order creation to payment settlement that brings together software, services and hardware — trusted by more than 100,000 restaurants, including independent operators, domestic chains and international brands across the globe. NCR’s comprehensive offering includes the signature NCR Aloha POS platform and NCR Silver Pro, to provide everything restaurants need to run their business, boost efficiency and increase growth.

The post JINYA Ramen Bar Elevates Customer Experience Using Innovative NCR Aloha Technology appeared first on PaymentsJournal.

1. 11% of all worldwide online shoppers currently use their m-wallets on a weekly basis
2. In 2021 the total m-commerce will reach USD3.16 trillion and raise to USD3.79 trillion in 2022.
3. By 2022 more than one billion people will be using the three main e-wallets: Apple Pay, Google Pay and Samsung Pay

As businesses open their doors online, payments solutions adjust to the change – and so do people. In a study conducted for Payvision, Kaleido Intelligence reports on the latest trends and forecasts in mobile wallets usage across the globe.

Amsterdam, March 2021 – Payvision, global omnichannel payment specialist, reports that by 2022 more than one billion people will use Apple Pay, Google Pay, and Samsung Pay.

Contactless payments are becoming a necessity, both for customers and businesses. Every week 11% of online shoppers worldwide buy via smartphone, and 34% of them claim making this their primary payment method. In its report commissioned by Payvision, Kaleido Intelligence foresees that 50% of the wearable devices will include a payment functionality.

“Contactless payments reign supreme in a world where strict health regulations call for people to avoid physical interaction. It is certain that people who have discovered the benefits of convenient, contactless online shopping will want to continue enjoying them. More businesses, if not all, will need to allow online payments to keep up with this demand.” says Ellerd Liem, Director POS at Payvision.

As the public is discouraged from using cash, m-commerce and mobile payments are in fact the best solution throughout COVID-19 and beyond. They guarantee a safe, contactless option that meets the needs of both businesses – which are increasingly mobile based, and their customers. As Visa observed in April 2020, cardholders touched a checkout terminal 50% less than usual.

The overall impact of this drove the total m-commerce spend for digital services and physical goods onto an upward trajectory that will reach USD 3.16 trillion in 2021 and USD 3.79 trillion by 2022.

Ellerd Liem of Payvision explains: “Now that people have discovered the benefits and convenience of online shopping, they’ll continue relying on this method. To beat out the competition and keep up with the innovation, businesses must prioritize an omnichannel strategy, that brings faster processes, personalized service, and 24/7 support.”

Payvision’s report confirms it: the way we shop has changed forever, due to the health crisis and the related restrictions we’ve been subjected to.

To read more on the rise of online shopping and contactless payments, download the Payvision report at: https://www.payvision.com/payment-insights/retail/mobile-payments-report

The post Payments Keep Going Digital: 2.7 Billion People to Use Mobile Wallet Apps by 2022 appeared first on PaymentsJournal.

As the spread of COVID-19 appears to be coming under control, commuters are slowly returning to mass transit.  In an announcement made this week and reported by Finextra, officials running the Metropolitan Transit Authority (MTA) in New York are choosing this time to begin a two-year phase-out the 30-year old mag-stripe fare card in favor of contactless options including open-loop debit and credit cards. 

So what happens if you bank with financial institutions that don’t yet issue contactless?  MTA will be setting up vending machines to issue a contactless version of the MetroCard and also a mobile app:

In total, the fare payment system has now recorded more than 50 million taps, and is currently running at 300,000 per day. Seventy-nine percent of those are at subway stations and the other 21% are on buses. The highest one-day tap total since Omny was launched in May 2019 came on March 5, with 339,000 taps.

“Omny is the easiest way to pay the fare and we’re happy to see so many New Yorkers agree and are using it to get where they need to go,” says Sarah Feinberg, interim president of MTA New York City Transit. “Just tap your phone, your card, or even a smartwatch and you’re on your way. It’s faster than swiping and one less card to worry about.”

The MTA is set to roll out its own contactless Omny card and mobile this year and to begin expanding fare options in 2021 with the introduction of reduced fares for senior customers and riders with disabilities and the integration with paratransit services. The card will eventually be available at vending machines in stations as well, completely displacing the old MetroCard by 2023.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post It’s the End of an Era as New York Phases Out the Old MTA MetroCard appeared first on PaymentsJournal.

It’s time to dust off those old leotards and break out the hairspray because Mastercard’s Engage platform is enough to make any merchant want to dance, Olivia Newton-John style. Mastercard is expanding this platform, offering its customers access to a continuously growing network of fintech partners and qualified technology that can efficiently adopt Mastercard Digital First solutions. Through these solutions, merchants will be able to provide their customers with a completely digital payments experience while still offering a physical card option.

“Mastercard is leveraging the integration that it already has with banks through its payment service to offer a range of digital enablement services,” said Tim Sloane, VP of Payments Innovation at Mercator Advisory Group. “These range from a broader range of payment solutions, [from] push payments and virtual cards to solutions for digital onboarding. While the latter requires deeper integration into processes not typically associated with Mastercard, such as bank account opening or new mortgage loans, the fact remains that Mastercard now offers fully vetted solutions that are already connected to every major payment and core processor, which makes the selection process for banks that are starting their digital journey much easier.”

The expansion of Mastercard Engage could not have come at a better time. Consumers are growing increasingly demanding when it comes to contactless, digital experiences, and some financial institutions and digital players are struggling to keep up. Many small and medium businesses (SMBs) in particular do not have the in-house capabilities to meet these consumer expectations. With this growing network of qualified enablers, merchants will now have the ability to quickly launch digital products, start to finish. Some of its partners include, but are not limited to:

A recent report by Mercator Advisory Group revealed that 42% of U.S. consumers fail to complete a purchase if their favorite payment method is not available. Over half of U.S. respondents agree they would stop a purchase if the checkout process is too complicated, and 43% of U.S. consumers avoid using merchants that require repeat entry of payment credentials. “With over 450 significant local payment methods in use across the globe, it can be a challenge for retailers to understand which ones to offer their customers,” said James Booth, VP Head of Partnerships, EMEA at PPRO. “However, this research shows how crucial it is to offer the payment methods the customer prefers.”

The future of payments is here, and Mastercard recognizes that through their ongoing work with technology and fintech partners. The growth of the Mastercard Engage platform is an example of the company’s commitment to the merchants who trust their brand to build a digital first journey for consumers.

The program is currently open to assist with launching Digital First, as well as to provide on-the-ground support, training through the Mastercard Academy, and promotion to Mastercard’s large customer base. For more information, go to the Mastercard Engage website and let’s hear those seamless transactions talk!

The post Let’s Get Digital With Mastercard Digital First Solutions appeared first on PaymentsJournal.

LONDON: MYPINPAD, a leader in PCI certified payments software solutions together with Hong Kong’s leading payment terminal manufacturer and payment solution provider, SPECTRA Technologies, today announced the launch of a software-based contactless payments solution for smart devices that will revolutionise the customer experience for small and micro merchants in Hong Kong.

SPECTRA Technologies, a technology partner with MYPINPAD, has developed SoePay, a ubiquitous SoftPOS solution for accepting contactless Visa and Mastercard card payments on any Android smartphone. SoePay is a mobile payment solution that eliminates POS rental and provides an affordable and secure way for small and micro merchants to accept card payments.

This is a significant step in mobile payment acceptance for Hong Kong. By transforming mobile devices into payment terminals, SoePay enables merchants to securely accept payments from cards and mobile devices in many situations where cash is needed, such as at events, markets and outdoor stalls.

Established in 1993, SPECTRA Technologies provides payment terminals and aftersales services with customers including KFC, 7 Eleven, H&M, and Shangri La Hotels and Restaurants. It exports products and holds partnerships in more than 65 countries and is a key promoter in Asia for cash to e-payment.

The news of the first transaction comes following the October 2020 announcement of the Hong Kong government’s subsidy scheme to promote contactless payment in public markets under the third round of the Anti-epidemic Fund, which the Food & Environmental Hygiene Department opened for applications. The scheme was created to encourage the use of contactless payments to improve public hygiene and reduce virus transmission risk in street markets.

Head of Asia Pacific at MYPINPAD, Morten Hofstad commented: “MYPINPAD’s contactless payment software is the first to be globally certified by PCI to accept contactless payments on smart devices without requiring additional hardware. With Hong Kong so prominent in Asia for contactless payments, we are privileged to work with such a tech savvy company, like SPECTRA Technologies, to deploy their solution and increase the reach of contactless payments in the country. This is just the start of MYPINPAD’s payments software presence in APAC as we continue to deploy solutions elsewhere in the region over the coming months. We very much look forward to growing our partnership with SPECTRA Technologies in developing secure payments and enhancing the customer experience.”

Damien Chow, Director of Digital Payment, Spectra Technologies: “SoftPOS is a key strategic initiative of SPECTRA Technologies to make payment acceptance safe, affordable, frictionless and hassle-free for our customers. We’re proud to be the first in Hong Kong to launch a SoftPOS solution that supports Visa and Mastercard contactless payment.  We look forward to further evolution of SoePay and accelerating contactless adoption in Hong Kong and Asia with MYPINPAD.”

Helena Chen, Managing Director, Hong Kong and Macau, Mastercard: “Mastercard is thrilled to join forces with MYPINPAD and SPECTRA to further expand the Mastercard Tap on Phone acceptance network with the launch of the new SoePay solution, which provides safe, fast and secure contactless payments that meets consumers’ everyday needs. The Mastercard Sonic feature is also applied to SoePay, which accompanies payments with a sound that indicates cardholders’ successfully made payment. The new partnership is in line with Mastercard’s ongoing commitment to promote contactless payment across the city and to support local SMEs’ future development through digitalization.”

Maaike Steinebach, General Manager, Visa Hong Kong and Macau: “Visa is excited to partner with MYPINPAD and SPECTRA to enable off-the-shelf ‘tap-to-phone’ mobile devices to accept contactless payments without additional hardware in Hong Kong. More than seven in ten of all face-to-face Visa transactions are contactless. This new low-cost and simple solution will help micro, small and medium-sized businesses stay competitive on their digital transformation journeys.”

Please visit www.mypinpad.com and https://soepay.com/en/ to discover more about this transformational technology.

The post Innovative Software-Based Contactless Payments Solution Launches in Hong Kong to Enable Safer Payments for Merchants in the Region appeared first on PaymentsJournal.

The latest figures from the National Transit Database report that from the onset of COVID (between February 2020 and November 2020), the number of public transit users in the United States fell by 62 percent, or 482 million rides. While some agencies are focusing on screen dividers and regular sanitation to protect staff and riders, many are looking to contactless technology to facilitate distancing and remove the need for physical cash and fare collection.

With many industries pivoting during the pandemic to offer distanced, virtual and touch-free services, physical interactions have become something to avoid where possible. The apprehension to use physical money is warranted as researchers have found flu viruses can survive on bank notes for almost 17 days, and the act of passing over money makes social distancing very challenging. With many reasons, both internal and external, to shift away from the physical collection of cash and fares on public transit, the door has been opened to digitally transform the industry.

As safety is now the number one concern for almost all public transit agencies, several, such as Lancaster and Reading PA, have already made the move to address this concern by adopting mobile ticketing and fare collection. This isn’t dissimilar to what we’re seeing in other industries too. In fact, contactless payments are already present in healthcare, retail and food services, and now two out of three consumers would prefer to buy from businesses that offer contactless payments instead of using physical cash.

With adoption rates of contactless technology soaring, public transit riders now expect the option to pay with their mobiles on the bus as they would in any grocery store. Not only does this alleviate hygienic concerns for riders, public transit agencies have much to gain too. Research has shown that implementing more convenient and tech savvy services are an effective way to introduce younger generations to public transportation. In this way, transitioning to contactless technology can satisfy everyday passengers while also attracting a new group of riders.

Although it may seem that pandemic pressures are forcing the hand of public transit to make rapid changes, there are also a vast number of benefits that come from adopting this smart technology.  For one, it opens the door to integrating other modal options such as e-scooters, rail, and even parking, creating a one-stop shop for all mobility needs. This technology can also dramatically reduce costs for transit agencies by removing the need for cash fareboxes which require regular maintenance and lack real-time data insights.

Removing these boxes and replacing them with electronic fare validators allow public transit agencies to gain insight into their ridership patterns. They can also use this data to determine which new routes should be created based on rider demand, or even which ones should be removed based on total ridership. This system also provides location tracking for the public transit vehicle and can be used to update schedules in real-time and provide riders with estimated arrival times for their journeys.

In addition, the system can help riders plan their trip from point A to B, offering different routes, and if integrated, different mobility options to get them where they need to go. While it may seem like an unapproachable task at first, digital transformation can be exactly what the public transportation industry needs to bring riders back onboard.

The pandemic came as a shock to all, and for public transit it completely upended the industry. While this disruption has caused significant shortfalls in revenue for agencies, it has also catalyzed the demand for contactless fare collection. Now, there are opportunities to bring about significant changes on public transit, ultimately reducing costs for agencies operating the vehicles, while increasing the functionality and accessibility for users.  Digital transformation in the industry should no longer be a question of why, but a question of when.

The post Pandemic Accelerates Adoption of Contactless Technology on Public Transit appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Blog – 2020 North American PaymentsInsights: Debit – Continued Change

The Trends to Know Around Touchless Transactions: 

• Roughly six in ten people who make contactless payments report they are often touchless.
• The pandemic put the spotlight on truly touchless transactions, despite indications that the likelihood of contracting COVID-19 from a terminal is very low.
• 57% of consumers report that when making a touchless transaction, they never have to touch the terminal at all.
•  25% of consumers report that when making a touchless transaction, they still have to touch the terminal to some degree. 
• Predictably, the rise in touchless transactions has come at the expense of cash.
• On average, the amount of cash spent each week has fallen slightly after two years of growth.
• The median consumer spent $56 a week in cash in 2020, down from $62 a week in 2019.

About Report

Mercator Advisory Group’s most recent consumer survey report, 2020 North American PaymentsInsights: Debit – Continued Change, from the bi-annual North American PaymentsInsights series, takes an in-depth look at U.S. consumers’ current attitudes and behaviors with regard to debit cards and P2P payments.

While the data from this survey indicate a decrease in the number of debit users, actual debit card volume is increasing in the pandemic era.

Nearly one-half of the consumers surveyed report they currently receive rewards on their debit cards. Many consumers who receive debit card rewards say it motivates them to spend more on these cards. However, while the primary rewards are cash back and/or points, the proportion of customers receiving these two rewards appears to be decreasing when compared with last year.

Debit card fraud is on the rise with one-quarter of debit card owners reporting fraud on their debit card. While this is on par with last year, it is much higher than the 17% reported in 2018.

The use of P2P payment apps continues to gain in popularity. In 2017, 57% of American adults reported using a P2P service. That has increased to 70% in 2020. The market is currently dominated by PayPal, but other P2P services, Venmo, Zelle, Google Pay and Square Cash, have all roughly doubled in reported usage since 2017.

This year, the average frequency of use of P2P services has decreased from 9.0 in 2019 to 8.0 transactions annually. This decline has likely been a result of the pandemic, as fewer people are socializing and thus have fewer opportunities to use P2P payments.

This report explores how technology and fraud impact consumers lives and, in particular, the way they shop and pay for things. This includes detail on not only what they do, but also how they feel about these two important consumer issues.

“This report reveals how consumers use of debit cards and P2P payments have changed over the past year. It goes without saying that they pandemic has materially changed consumer payment behavior, but this report explores changes that are pandemic related, as well as those shifts in behavior that started before the pandemic,” stated the author of the report, Peter Reville, director of Primary Research Services at Mercator Advisory Group, which includes the North American PaymentsInsights series.

The post The Trends to Know Around Touchless Transactions: appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Blog – 2020 North American PaymentsInsights: Debit – Continued Change

Surprisingly, Smartwatches Are Used to Pay Most Frequently:

• The device most frequently used to pay are smartwatches, beating out smartphones, tapped cards, or chip cards.
• Predictably, college graduates are more frequent users of smartwatches for payments than non-college graduates.
• College graduates who use a smartwatch to pay do so an estimated 206 times a year, the most of any category.
• Consumers who use a smartphone with a universal wallet to pay do so an estimated 117 times a year, the least of any category.
• Consumers who use a chip card to pay, the largest category by headcount, do so 137 times a year.
• By headcount, chip cards are the most popular new technology, followed by smartphones, waved or tapped cards, and finally smartwatches. 
• Though smartwatches are the smallest category of new technology by headcount, its users use the tech most frequently. 

About Report

Mercator Advisory Group’s most recent consumer survey report, 2020 North American PaymentsInsights: Debit – Continued Change, from the bi-annual North American PaymentsInsights series, takes an in-depth look at U.S. consumers’ current attitudes and behaviors with regard to debit cards and P2P payments.

While the data from this survey indicate a decrease in the number of debit users, actual debit card volume is increasing in the pandemic era.

Nearly one-half of the consumers surveyed report they currently receive rewards on their debit cards. Many consumers who receive debit card rewards say it motivates them to spend more on these cards. However, while the primary rewards are cash back and/or points, the proportion of customers receiving these two rewards appears to be decreasing when compared with last year.

Debit card fraud is on the rise with one-quarter of debit card owners reporting fraud on their debit card. While this is on par with last year, it is much higher than the 17% reported in 2018.

The use of P2P payment apps continues to gain in popularity. In 2017, 57% of American adults reported using a P2P service. That has increased to 70% in 2020. The market is currently dominated by PayPal, but other P2P services, Venmo, Zelle, Google Pay and Square Cash, have all roughly doubled in reported usage since 2017.

This year, the average frequency of use of P2P services has decreased from 9.0 in 2019 to 8.0 transactions annually. This decline has likely been a result of the pandemic, as fewer people are socializing and thus have fewer opportunities to use P2P payments.

This report explores how technology and fraud impact consumers lives and, in particular, the way they shop and pay for things. This includes detail on not only what they do, but also how they feel about these two important consumer issues.

“This report reveals how consumers use of debit cards and P2P payments have changed over the past year. It goes without saying that they pandemic has materially changed consumer payment behavior, but this report explores changes that are pandemic related, as well as those shifts in behavior that started before the pandemic,” stated the author of the report, Peter Reville, director of Primary Research Services at Mercator Advisory Group, which includes the North American PaymentsInsights series.

The post Surprisingly, Smartwatches Are Used to Pay Most Frequently: appeared first on PaymentsJournal.

I think I can safely speak for all of us when I say we just want to put 2020 behind us. But there were a lot of lessons learned by credit unions in regards to credit vs debit payment trends during the pandemic, and that data will continue to prove useful throughout the rest of the pandemic and into the new normal.

To discuss how consumer debit and credit trends in 2020-21 have impacted the payments industry, how debit and credit transactions themselves have been impacted, and what changes should be expected across merchant sectors, PaymentsJournal sat down with Glynn Frechette, SVP, Advisors Plus Consulting at PSCU, Norm Patrick, Vice President, Advisors Plus Consulting at PSCU, and Ted Iacobuzio, VP and Managing Director of Research at Mercator Advisory Group.

Consumer debit and credit trends in 2020-21

Since the beginning of COVID-19, PSCU has been working on a weekly basis to analyze data on year-over-year changes and various payment dynamics. As a result of the pandemic, nobody was immune to the shifts in consumer behavior and payment patterns, which were heavily influenced by the adoption of new technologies. Although the pandemic was a largely negative occurrence, it did help to accelerate the implementation of more digital payment types and methods, which has been invaluable for the growth of the payments industry.

According to the chart below, there has been a substantial upward shift in contactless and card not present transactions. “The blue line shows our debit growth for Card Not Present transactions,” said Patrick. “And in our most current period, ending in January, we’re looking at about 42% year-over-year growth compared to credit card at 24.5% growth.”

While both numbers are impressive, there is an obvious gap between the debit and credit trends displayed. “I think you can attribute a lot of that to the fact that debit has really been the major growth in terms of payment method over the past year as we’ve gone through the pandemic,” explained Patrick. This could be due, in part, to a fear of fraudulent activity and a “my money versus their money” mindset.

In regards to contactless payments, the graph is not showing growth numbers. “These are actually share numbers,” added Patrick. “So it’s the percentage of contactless transactions that are conducted on contactless enabled debit cards or credit cards.” From 2020 to 2021, the debit side jumped up to 18% share, and the credit card up to 13%.

“I would even call these numbers a bit conservative, because not all merchants are able to take contactless; there have been more that have come live with it over time. And you know, that makes our numbers a bit conservative,” advised Patrick.

Mobile wallet transactions are also seeing a lot of growth, with 67.6% growth on debit, and 47.5% growth on credit. As more and more merchants add this technology to their stores, consumers will inevitably grow increasingly comfortable with leveraging it. “We’re beginning to see the fruits bear there as well.”

How have credit and debit card transactions been impacted?

Short answer: the impact has been significant.

PSCU has been working behind the scenes to address these credit and debit trends. “Spending remains very strong for both credit and debit, with growth in debit purchases in the goods, services and grocery sectors,” said Frechette. Unsurprisingly, this growth was aided by this second round of COVID-19 relief funding.

Debit card spending is up 23%, with debit transactions up 7% as of late January. That puts debit purchases in line with the four-week average growth of 25%, while transactions are slightly lower than the four-week average of 8%. “Credit card spend…in late January was up 3.8%, which is just below the four-week average of 4%, while transactions were down 3%,” continued Frechette.

Despite the unknowns of the long-term economic impact of COVID-19, consumers are choosing debit as their most preferred form of payment, which is in line with what PSCU has been reporting each week since late March. And according to PSCU’s 2020 Eye on Payments Study, this is the second full calendar year in a row that debit has remained the first preferred choice of payment method for consumers.

“Consumers are struggling with debt, and they find that using debit gives them more control over their finances. They’re more aware of the funds they have available to spend,” informed Frechette. They are paying more attention to the actual funds they have available to spend, and with the financial future of Americans feeling very uncertain, it makes sense that they’d choose to act responsibly.

While some financial institutions are focusing on debit because of the debit consumer trends that are at the forefront of this pandemic, “credit unions should not forget about promoting credit card programs,” warned Frechette. “It is a great time for credit unions to fill a need in the marketplace and grow their credit card portfolio.”

While credit unions should continue to encourage their customers to use their credit union issued cards at the point of sale, it is no longer enough. “Credit unions should be promoting incentives and special offers to encourage members to add or use their credit union issued cards over competing bank or Fintech issued cards,” suggested Frechette. PSCU can help credit unions enhance their incentive programs so that debit and credit transactions remain at the top of the wallet.

Changes across merchant sectors and consumer credit trends 2020

Across merchant sectors, there are winners, and there are losers. And the pandemic has certainly been calling the shots in terms of the successes and failures of merchants. “From the positive perspective, one of the bigger sectors of impact on the ‘good side’ has certainly been with consumer goods,” said Patrick.

Much of the spending that is occurring has been driven by improvements made to the home, such as general repairs and constructing home offices. According to the chart above, consumer goods were up 24% for the year so far for credit, and 44% for debit. Utilities spending is also up 25% year over year for debit and 17% for credit, which is most likely due to upgrades to the internet and heating the house more when working from home.

Services are also up, with about 26% for debit and 10% for credit. Groceries, however, have seen less growth since the initial panic of March and April has subsided. But there is still a 13% increase for debit and 15% increase for credit, which can most likely be attributed to people choosing to cook their meals at home rather than eat out.

This new preferred dining option, along with hourly and capacity restrictions and general fear of the virus, is one of the reasons restaurants are coming up short. Food establishments are actually up about 10% for debit, but  down 18% for credit. Travel and gasoline are also being negatively impacted by the pandemic, with credit vs debit payment trends down for the 2020 spending year.

“That’s where things sit at today, knowing that at some point, we all hope we are going to head in a more positive direction relative to the pandemic,” offered Patrick. “With vaccine availability and [the] slowdown of the rampant infection rates, we would hope that at some point there is going to be release of pent-up demand.”

There were some additional interesting credit vs debit payment trends happening across the country. The overall U.S. spending coming out of January for credit cards was about 4%, with the Great Lakes Region up 5.4% and the Southeast up 8.1%. Those who did not perform quite as well were Hawaii, which was down 7.5%, and New England, down about 5%. Debit card trends showed spend up 23%, with the Great Lakes leading the pack (+29%), and the Plains Region coming up a close second (+27%). Hawaii and the West Coast both saw debit card transaction increases, at 16.7% and 14.4%, respectively.

“It’s been very interesting as we’ve gone through this to see these various patterns emerge [in credit and debit trends 2020] relative to the regions across the United States in addition to the merchant categories,” concluded Patrick.

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Although Covid caused many restaurants to struggle, some restaurants can use this hardship as a means to adjust their long-term strategy to better cater to consumer’s needs. To evaluate where restaurant strategies are pivoting, the Restaurant Franchise Group at TD Bank conducted a study of 250 restaurants. First, it is no surprise consumers overwhelmingly desire a contactless experience. Restaurants adapted their long-term strategy accordingly by providing mobile order along with off-site delivery.

In turn, restaurants must also begin to plan how they will account for third party delivery fees, employee bases, and overall lease profile. Next, preferred payment methods have changed. Many consumers now value quick, easy, and contactless payments. Restaurants responded by implementing non-traditional payments, such as mobile pay, cloud-based POS systems, and P2P apps, as an available payment method. Finally, Restaurants are rethinking their real estate.

Nearly half reported that they plan to reduce or have already reduced the number or size of their franchise locations. As more and more consumers are preferring curb-side pick-up or delivery over dine-in, restaurants are wise to facilitate these capabilities. With vaccine rollout on the horizon, restaurants will hopefully see both a return on their investments as well as a slight return to normalcy.

Attached below is an excerpt from the QSR Article where you can find more data and insights:

The restaurant industry has been hard-hit by COVID-19. According to the National Restaurant Association’s September 2020 report, one in six restaurants closed permanently or long-term as COVID-19 restrictions evolved. These restrictions, which initially resulted in temporary closures, later allowed for outdoor dining and indoor dining at limited capacities. Restaurants will likely continue to struggle throughout the colder winter months as we see an uptick in COVID-19 cases nationwide.

However, as we have seen throughout the pandemic, restaurant owners and operators are creative. They will continue to adapt to cater to consumer preferences and rethink their operational models to enhance consumer confidence. If restaurants pursue this positive, flexible mindset, they can use this time as an opportunity to re-evaluate their operational model and determine how they can adjust their long-term business strategy.

Overview by James O’Brien, Research Analyst at Mercator Advisory Group

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Paying for rides on trains, subways, buses and other forms of public transportation has been getting more convenient for consumers, particularly those systems that can accept open loop debit, credit or prepaid cards or mobile wallets with contactless capabilities. 

Riders can tap or waive their cards or mobile wallets at the turnstile or fare box, a much better experience for riders than say tokens, cash or transit cards. As contactless card issuance has been increasing, more transit authorities have been giving real through to making the necessary upgrades to improve fare collection.

Then the global pandemic shut everything down. Individuals are concerned about their safety on mass transit and many are no longer commuting to an office every day.  A blog post on Consultancy.org considers how transit systems are going to need to adapt going forward.  Recent reports that COVID-19 or some variant of this virus will be around for the long term will mean that contactless will be preferred way to pay, but ridership may never come back to previous levels.  Here’s an excerpt from the blog:

Bus and Rapid Transit should take priority over fixed infrastructure to provide more flexibility and serve the population most in need. Transit is often viewed as serving three key purposes: 1) Provide critical transportation for the economically disadvantaged; 2) Reduce congestion from highways and; 3) Reduce emissions.

The pandemic has organically reduced congestion and emissions, leaving transits needing to focus the majority of its resources on serving the economically disadvantaged. These last nine months have highlighted the societal differences of two economies – one that that can work from home and one that must leave home daily and depends on public transportation for economic survival. 

Transportation agencies should prioritize investment in bus improvements, such as bus rapid transit (BRT) and route optimization that are cheaper and faster to operationalize. They also should be looking at how to better integrate Transportation Network Companies (TNCs) into first- and last-mile connections, such as integrating rideshare and/or scooters into a transit ticket, especially to reach the economically disadvantaged and people who cannot work from home.

To their credit, many transit agencies recognized early on in the pandemic where their ridership was traveling, and they made rapid adjustments to ensure that they were routing to where essential workers live and work.

Overview provided by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Contactless on a Train; Transit Payments During COVID appeared first on PaymentsJournal.

In the past few years, shopping habits have changed. One of the most notable changes was the emergence of the QR code. Both Apple and Covid-19 catalyzed QR’s emergence. First, Apple made QR codes accessible to consumers by allowing users to scan all QR codes through the iPhone camera.

While before consumers who wanted to use a QR code had to download a third-party app, they could now simply breakout their normal iPhone camera. Next, Covid-19 accelerated consumer demand for contactless payments. QR codes are ideal for facilitating contactless payments because they allow users to pay from their mobile phone.

Restaurants in particular provide a great use case for the QR code. The emergence of Pay-at-the-table demand will favorably poise the QR code. Not only can consumers use the QR to pay, but they can also use it to view the menu and order. Unlike tap-to-pay technology, the QR can handle the whole entire restaurant experience – a valuable tool for those looking for a contact-free payment.

One question that looms for restaurants and retailers looking to normalize the contactless experience: how many QR apps can the customer handle? When thinking about deploying contactless experiences, merchants must make the decision whether or not to build their own app or utilize a third-party app. With so many consumers looking to digitize their grocery, retail, and restaurant experiences, contactless solutions (including QR) could expect to see quite the activity in 2021.      

Attached below is an excerpt from the Forbes article, where you can find more detail on the trend:

I remember a Comscore SCOR +4.8% survey that found that 55% of American consumers would be happy to have four or more retailer apps on their phone. For the retailers that they visit frequently (e.g. Starbucks SBUX -1%) they will have the retailer app and use it. In other cases they will just use some third-party payment app (e.g. their bank) or a convenient wearable like a bracelet or key fob that is controlled by a third-party app. This will give retailers new opportunities to add value and new control over identity and payments.

In this in-app vision of shopping, then, I do not think that consumers will have hundreds of apps on their phones to deal with every retailer.

Overview by James O’Brien, Research Analyst at Mercator Advisory Group

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It’s not just for online anymore. That would be PayPal’s increased visibility at brick-and-mortar merchants for POS payments via QR code. Last year, PayPal partnered with InComm to offer in-store payments at CVS. Now PayPal has picked up the pace and can be found in several hundred thousand retail locations.

While in-store payment volume is a slim piece of the overall transaction pie for PayPal, it’s another slice of revenue-generating transactions for its network. This could not come at a better time as consumers and merchants want more contactless payment methods in these continuing times of social distancing.

The following excerpt from a Wall St. Journal article reports more on the topic:

PayPal Holdings is breaking into stores across America. For years, investors wondered if the digital-payment giant would cross over into the physical realm in a big way. The pandemic, which has been a boon for contactless tapped or scanned payments, seems to have gotten that ball rolling. PayPal on Wednesday said its payments with QR codes—digital scrambles that can be displayed by phones and scanned at checkout counters—are now accepted at more than 600,000 retail locations, and that in 2020 it had signed up 29 large enterprises such as CVS and Macy’s to offer them. PayPal did more than $20 billion worth of in-store volume across its payment types in 2020.

Plus, in-store transactions are relatively profitable for PayPal. For one, having a viable in-store option apparently pumps more volume through already-acquired users’ accounts: Last year, there was a 19% increase in payment volume for PayPal users who started regularly using QR codes. This helps PayPal more closely embed itself in users’ day-to-day lives, giving it further opportunity to offer its growing list of services, like buy-now-pay-later and bill payments. PayPal’s branded in-store transactions like QR codes also generally have better take rates, or how much of the volume ultimately becomes revenue for PayPal, than many kinds of online payments.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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Meal delivery had already become table stakes for all restaurants, big and small, chains and independents. Then in 2020, the pandemic-driven stay-at-home lifestyle created a surge in consumer online ordering and food delivery. Competition among third party delivery companies became intense in the battle for market share with DoorDash grabbing the lion’s share. But free offers and discounting has taken its toll on profitability and there has been significant consolidation among meal delivery firms.

So it’s no surprise to see DoorDash leveraging its delivery infrastructure into adjacent verticals such as C-stores and pharmacies. Other verticals will follow. Still, headwinds are lurking for the delivery firms, including regulatory issues and pushback from restaurants on fees. Mercator covered these issues in a January 2021 Viewpoint Third-Party Delivery Firms Form Necessary but Uneasy Alliances with Merchants.

The following excerpt from a Wall St. Journal article reports more on the topic:

Food-delivery platform DoorDash  is now trading nearly 90% above its initial public offering price just as vaccines are being broadly distributed in the U.S. and restaurants in some of its largest markets are poised to reopen outdoor dining. So why isn’t this stock a screaming short?

The answer may be more about convenience than taste. In addition to restaurant delivery, DoorDash has been building up its market share in third-party delivery for other goods, such as those from the likes of 7-Eleven, Wawa, Circle K and CVS. Post-pandemic, those ancillary opportunities could prove to be more central to DoorDash’s growth thesis than bearish investors are appreciating.

In his DoorDash initiation report, JPMorgan’s Doug Anmuth calls food delivery a “forever changed category,” noting that while growth may slow, activity will remain elevated, given consumers’ value of convenience and selection. He cites new verticals, such as convenience, grocery and pharmacy, as key growth drivers.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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2020 saw contactless payments reach escape velocity and 2021 will see continued growth. Add to the list a car toll transponder-based payment system for use at fuel pumps and C-stores. This new offering can be found at some of Global Partners’ Alltown C-stores/gas stations in the New England area. Alltown is partnering with tech developer PayByCar that leverages a car’s windshield-mounted transponder device. Once enrolled with a mobile phone number and a payment card on file, drivers pull up to a pump and then receive a text message. The driver confirms and proceeds to fill their tank. The payment receipt is sent via email. This contactless payment system will shave some time off a refueling pit stop when seconds count.

The following excerpt from a CStore Decisions article reports more on the topic:

Global Partners‘ Alltown has implemented PayByCar Inc. services at all 30 of its locations in Massachusetts. Customers will be able to pay for gas and other goods directly from their mobile device, without ever having to take out cash, a credit card or mobile app.

Upon entering an Alltown location, PayByCar recognizes the car’s transponder and sends a text to the customer’s smartphone. They can then reply with just the pump number, and PayByCar automatically turns that pump on, registers the transaction, charges the card and sends an e-receipt.

“We’re living at a time when contactless payments are increasingly important,” said Mark Cosenza, Senior Vice President at Global Partners LP, owner of Alltown convenience stores. “We’re excited to offer drivers not only the convenience of simple and quick transactions, but also the added safety and peace of mind during the age of COVID-19.”

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

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So I expect every merchant is thinking, “Happy days!” another security upgrade to the POS.  Mastercard’s lead is that it’s Enhanced Contactless (Ecos) specification will protect contactless data from quantum based hacks.  Here are a few thoughts regarding that risk.

Quantum computing which is the technology that threatened existing encryption is likely 7 to 10 years away.  Current implementations don’t have a sufficient number of qubits and the ones they do have are too unstable and expensive. In addition, there is no software language available to program a quantum computer today, so that needs to be developed also.

At the same time, there are Quantum resistant encryption technology available today from several firms. As with EMV and NFC, deployment of these new encryption techniques are likely to take many years, so it would be great if we could start now, but no one standard has been put forth by the payment networks so implementing something now will likely need to be replaced when the standard is announced.

Note that some current solutions, such as Bitcoin, can’t be upgraded because the old encryption technique is embedded in the immutable ledger.  On the plus side that means that everyone that lost their private key to a fortune will be able to recover the key, but they better beat the hackers!

Also recognize that different attributes of quantum will also protect our data. Quantum makes communications impossible to hack without  being instantly detected. China implemented this with a laser up to a satellite and back down to a base station – so it will be available before quantum computing.

Quantum Computing and other applications of Quantum Physics (like spooky action at a distance that enables communication faster than the speed of light) will impact a range of payments and data communications technologies broadly used today, but that’s also likely to be 10 years away:

“Credit card firm Mastercard has unveiled new quantum-resistant standards that are designed to enhance the security and privacy of contactless payments.

As a result of the move, Mastercard will become the first payments network to bring quantum-era security and privacy to contactless payments. The Enhanced Contactless (Ecos) specifications have been introduced following a surge in contactless payments over the past year, fuelled by the desire for more hygienic payment methods in-store as a result of the COVID-19 pandemic. Mastercard revealed that contactless penetration made up 41% of in-person purchase transactions globally in the third quarter of 2020, a year-on-year rise of 30%.

Ecos will enable the utilization of new quantum-resistant technology in order to deliver advances in algorithms and cryptography. Convenience will be maintained as contactless interactions will remain under half a second, and Mastercard said that, in time, any device can become a payment device without the need for a backup swipe or dip of a card.

The specifications also aim to enhance privacy by offering advanced protection when account information is shared between the card or digital wallet and checkout terminal.

The firm added that the Ecos specifications will enable merchants, financial institutions and customers to make such security transitions seamlessly over the coming years, with digital wallets, mobile payments, contactless cards and point-of-sale terminals continuing to work as they do today. This is because Ecos is implemented via a software upgrade without the need for new hardware of terminals.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Mastercard Goes Long on Marketing, but Short on Details appeared first on PaymentsJournal.

CU Times provides analysis of St. Petersburg, Florida-based payments credit union service organization PSCU’s recent data release that shows continued growth of debit card transactions.

This trend started when the pandemic began as consumers concerned about their long term financial picture pulled back on credit spending and state and Federal benefits were deposited to their checking account where they could be spend on essentials with their debit card.

Armed with $600 checks from the federal government, credit union members in the PSCU network spent 25% more through their debit cards in the week ending Jan. 17 than they did in the third week of 2020.

The increase in debit card spend was in line with the four-week average gain of 25.1%, and the 4% gain in credit card spending matched the four-week average gain of 4%.

Consumers have continued to show strong adoption of digital payments, including contactless, mobile wallets and card-not-present alternatives, while using less cash. For the most recent week, the number of cash withdrawals was down 13%, in line with the four-week average drop of 13.4%.

The article provides this regional outlook of both debit and credit card spend, significant differences in payment type use:

Mastercard and Visa both will be providing their quarterly financial disclosures this week, including details on card transactions for fourth quarter. This will provide a full picture for the calendar year and a basis for a forecast for 2021. The wildcard will be the impact of another round of stimulus funds which looks likely, but the amount and to whom it’s directed will play a big role too.

The post The Interconnection of Stimulus Payments and Debit appeared first on PaymentsJournal.

New research from incentives solutions leader Blackhawk Network delves into how and which incentives can most effectively spur COVID-19 vaccine adoption

PLEASANTON, Calif. – Jan. 26, 2021 – As government leaders and major organizations such as the National Retail Federation and other US businesses encourage Americans to receive the COVID-19 vaccine, incentives solutions leader Blackhawk Network conducted research[1] to understand which incentives could prove most effective. The Centers for Disease Control and Prevention report that more than 12 million Americans (approximately 3.7% of the total U.S. population[2]) have received at least one dose of a COVID-19 vaccine. According to Blackhawk’s research, approximately 40% of respondents are either unsure about getting the vaccine or do not plan to get it—but certain incentives could boost vaccination rates.

“We have been receiving an influx of questions from our clients and partners about the role incentives play in encouraging Americans to receive the COVID-19 vaccine. To better understand how incentives could impact COVID-19 immunization adoption and provide informed insights to our partners, we conducted research that found monetary incentives—even modest ones—could be an effective option,” said Jeff Haughton, SVP, Incentives, Corporate Development & Strategy of Blackhawk Network, a global branded payments provider. “Incentives are powerful tools for driving desired behaviors, and the key for government agencies and businesses looking to increase vaccination rates and support public health will be ensuring they are offering incentives their target audiences find most valuable and attractive.”

The “COVID-19 Vaccine Incentives” study was comprised of two surveys asking Americans about whether incentives from the government or their employer would motivate them to get the COVID-19 vaccine. Topline findings include:

• Money talks. When asked their preferred incentive for getting the COVID-19 vaccine, money was the top choice among respondents. More than two thirds said they would accept a monetary incentive ranging from as little as $10 to as much as $1,000 or more—one third of the total respondents would complete the vaccination process for a $100 incentive or less. The remaining third of respondents said money would not influence their willingness to get the vaccine. Paid time off was a distant second choice.
• Monetary incentives are welcome in different forms. While most respondents would prefer to receive their incentives via a direct deposit to their bank account, about 25% would prefer to receive a prepaid or gift card in digital or physical form. About 10% of respondents would prefer to receive digital delivery via PayPal, Zelle or Venmo.
• Incentives drive vaccination rates among families. Receiving the COVID-19 vaccine after being encouraged by the government or an employer would not only drive people to vaccinate themselves but would also encourage half of respondents to urge their family members to also get vaccinated.

“Last year’s events significantly impacted many Americans’ financial security, so it’s no surprise that monetary incentives can be effective in motivating people to receive the COVID-19 vaccine,” added Talbott Roche, CEO and president of Blackhawk Network. “It also makes sense that one quarter of respondents would prefer their incentive on a prepaid or gift card. A significant number of Americans are unbanked or underbanked and as the U.S. economy increasingly relies on digital transactions post-COVID, payment cards can help connect those who otherwise struggle to access the digital economy. Just in the last few months, we’ve seen forms of branded payments like gift cards used by nonprofits to distribute relief, the government for stimulus payments, employers increasing rewards and recognition and retailers embracing contactless payments. It’s no stretch that vaccine incentives are next on the list. By providing Americans with funds they can spend via multiple channels, businesses and the government are encouraging them to spend with local, regional and national merchants—pumping money back into our economy while simultaneously driving behavior.”

Blackhawk Network is one of the top issuers of gift and prepaid cards with more than $25 billion distributed annually cross the globe. Visit www.blackhawknetwork.com for a full selection of prepaid and gift card options.

[1] The “COVID-19 Vaccine Incentives” report is based on the combined findings of two internet-based surveys conducted by Survey Monkey on behalf of Blackhawk Network January 15–17, 2021. The sample size for the government incentives study included 1,005 U.S. respondents ages 18+ and the sample size for the employer incentives study included 1,105 U.S. respondents ages 18+.

[2] “U.S. and World Population Clock” is a real-time population tracker managed by the U.S. Census Bureau. As of January 19, 2021, the tracker reported the U.S. population to be more than 330 million people.

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In 2015, Martin Shkreli rocketed the price of a lifesaving AIDS drug from $13.50 per pill to $750 when running Turing Pharmaceuticals. Two years later, he was found guilty on two counts of securities fraud and a single count of conspiracy.

America has been littered over the years with ‘conmen’ obtaining ‘dirty money.’ In fact, the ‘conman’ starting with Charles Ponzi to Bernard Madoff and beyond are the stories that created the traditional definition of ‘dirty money.’ It is defined by The Cambridge Dictionary as ‘money that someone gets in an unfair, illegal, or dishonest way.’ But that definition is being redefined by the Covid-19 pandemic. Today, ‘dirty money’ has been defined as unsanitary–literally.

It reminds me of when I was a little kid. My parents would have me hold some change to keep me occupied. I would put a quarter in my mouth. My parents would exclaim: “Vincent, take that out of your mouth, money is dirty!” We are in a world where touching money is not only dirty, but dangerous–and unhygienic. Also, when I grew up, my parents preferred to pay in cash. And while cash may still be king on a company balance sheet, it has been relegated to a last-ditch payment method when we make a personal transaction today. Contactless payments are now front and center.

And the shift has been swift. In the US, the use of contactless cards has gone up about 150% per month since March 2020–the start of the pandemic. Before March, less than 10% of Americans used their contactless feature. Now it is well above 50%. A July survey by the Federal Reserve Bank of San Francisco found that 28% of respondents said they are avoiding using cash and using card payments instead due to the pandemic.

Past our shores, cash is on the decline in every country around the world. In March, the World Health Organization advised the public to use contactless technology where possible, to prevent the spread of the disease. Many retailers have stopped accepting cash altogether, instead encouraging customers to use contactless card payments or mobile apps to pay in a touch-free, more hygienic way. Given concerns that the virus can live on dollar bills for around 48 hours, and ATMs potentially touched by hundreds of hands without a deep clean in between, many of us have instead embraced touch-free payments.

As we move to touchless payments, the elephant in the room is not payment methods–it is health.  The European Banking Authority (EBA) and the World Health Organization (WHO) advises not using cash to better stem the spread of the virus. The WHO goes so far as to recommend ‘holding a card above a payment terminal’–or contactless payments –or using a smartphone payment app.

As we move towards a more digital-focused society, government bodies are increasingly worried about the effects on vulnerable members of society. In particular, the elderly, those who remain unbanked, and those without smartphones are still reliant on cash and could be left excluded in a digital-first payment ecosystem. In a post-COVID world, these same groups are those who could be most exposed to further viruses from cash circulation. So, with touch-free payments important to improving hygiene, there is an important question to consider: could digital exclusion be a barrier to a COVID-free society?

In the immediate future, the use of biometrics to verify payments is a way to balance both security and hygiene. With a fingerprint biometric smart card, consumers can scan their fingerprint on their own payment card to secure a transaction above the contactless payment limit. This process secures the card to the owner and ensures they don’t need to touch shared pin pads during a purchase. Therefore, consumers can shop feeling assured that their money, and their personal health will be protected, regardless of how much they are spending.

By embracing fingerprint biometric payment cards, banks and payment providers will not only improve consumer security and hygiene, but also make the process of purchasing goods using their contactless card quicker and easier. Ultimately this can help cut the transaction time and, in today’s difficult retail environment, help to reduce queues at the checkout.

These changes have even led many analysts to suggest this large-scale shift to contactless card payments could mean the end for cash in the long term, as more consumers embrace contactless to increase hygiene during the payment process, and beyond.

So, the new definition of dirty money is actually what I learned as a little kid.  When my parents said: “Vincent, take that out of your mouth, money is dirty!”  How little did I know how right my parents were.

The post Dirty Money Redefined appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Blog – Contactless POS Payments Finally Ready For Prime Time

Growth Opportunities for Contactless Payments:

• Payment providers, including card networks, issuers, and independent software vendors, can take advantage of several contactless growth opportunities in various vertical markets.
• Restaurant (1 of 2): Pay-at-the-table will become a more frequent contactless payment option as in-house dining returns to restaurants post COVID-19.
• Restaurant (2 of 2):Restaurant operators find increased staff productivity and fewer ordering errors, while diners enjoy faster ordering and payment without handing their payment card to the server.
• Grocery: Mobile scan-and-pay apps are popular with shoppers who do not want to wait in checkout lines.
• Transit: Contactless payment cards are replacing closed-loop prepaid cards for fares. Transit agencies will convert to contactless credit or debit cards, and riders will not have to reload prepaid cards.
• Fuel: Mobile pay apps are increasingly used at fuel retailers by drivers to pay for gas. Conversational commerce will also arrive at the pump.

About Report

Several years in the making, contactless payment cards are finally arriving in large numbers at mailboxes throughout the U.S., as domestic cardholders catch up with the rest of the world. But contactless goes beyond plastic cards, with mobile apps providing another payment option for consumers to choose. While COVID-19 has accelerated contactless in 2020, payment providers and merchants now see that no-contact POS transactions can be a differentiating strategy to engage and expand their customer base beyond the pandemic. 

The post Growth Opportunities for Contactless Payments: appeared first on PaymentsJournal.

Contactless payment acceptance systems are revolutionizing the field of transactions. These channels are faster, easier, and more secure than traditional methods of payment, allowing customers to easily purchase products and services with the wave of their debit or credit card. What’s more, contactless payments also create tangible time-savings for businesses. By reducing the amount of time spent manually processing transactions flowing into their system, companies can dedicate more resources to meeting customer needs and needs other tasks.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Blog – Contactless POS Payments Finally Ready For Prime Time

Contactless Payment Acceptance Multiplies for Merchants:

• In addition to chip cards, scanning QR or barcodes with a mobile phone provides another contactless payment acceptance option for merchants.
• Most scanning features are integrated within merchant mobile apps that also provide menu ordering, loyalty programs, and personalized marketing offers.
• In addition to Walmart Pay’s continued use of QR codes at checkout, InComm & PayPal enabled >10,000 CVS stores with QR code payments.
• Starbucks’ mobile app embeds a barcode for POS scanning, and also integrates its loyalty program used by about 65% of its customers.
• Starbucks mobile app users are twice as likely to visit more than once a week and 10 times more likely to come in multiple times a day.
• However, the ultimate contactless payment is autonomous checkout. 
• Look to Amazon and other tech developers to introduce grab-and-go shopping in grocery stores and C-stores.

About Blog

Several years in the making, contactless payment cards are finally arriving in large numbers at mailboxes throughout the U.S., as domestic cardholders catch up with the rest of the world. But contactless goes beyond plastic cards, with mobile apps providing another payment option for consumers to choose. While COVID-19 has accelerated contactless in 2020, payment providers and merchants now see that no-contact POS transactions can be a differentiating strategy to engage and expand their customer base beyond the pandemic. 

The post Contactless Payment Acceptance Multiplies for Merchants appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint Titled: Contactless POS Payments Finally Ready For Prime Time

Card networks have stepped up their contactless distribution

• The wifi symbol has become a familiar sight: Visa plans to have 300 million contactless cards in the US by 2021
• All new cardholders of AMEX and Discover receive contactless cards as the replacement.
• The loser in this scenario is physical cash use in quick-stop destinations and low priced items
• In April 2020, Mastercard reported 51% of U.S. consumers are using contactless payments
• Visa has stated that 60% of their U.S. face-to-face transactions are contactless
• Further support for contactless derives from POS terminal makers who are saturating enterprise merchant in-store networks

Abstract of the Viewpoint

Several years in the making, contactless payment cards are finally arriving in large numbers at mailboxes throughout the U.S., as domestic cardholders catch up with the rest of the world. But contactless goes beyond plastic cards, with mobile apps providing another payment option for consumers to choose. While COVID-19 has accelerated contactless in 2020, payment providers and merchants now see that no-contact POS transactions can be a differentiating strategy to engage and expand their customer base beyond the pandemic. 

The post Card networks have stepped up their contactless distribution appeared first on PaymentsJournal.

We are now operating in a “contactless economy.” For years, the rise in popularity for food on-demand has prevailed and today more restaurants have added curbside delivery, order ahead apps, and home delivery to help hungry customers receive food quickly and conveniently. Companies like DoorDash, Seamless and GrubHub have grown exponentially thanks to consumer demand for quick & simple food delivery. While demand for contactless delivery and payment was predicted to trend upward this year, the pandemic accelerated those trends at record pace and introduced the requirement for contact-free solutions.

Restaurants Go Contactless

As restaurants take steps to adhere to new social distancing rules, customers want to keep physical distance as much as possible while still enjoying their favorite meal. The contactless service and payment options adopted during mandated social distancing will remain in place. Drive thru, curbside pickup and leave-it-at-the-door home delivery are the new norm.

Payment methods like typing in a pin number and even tap-and-go technology still happen less than 6 feet away from another person. Customers don’t want to swipe their cards or tap-and-go to pay because it still is not contactless.

Contactless payments are not just a preference, they’re now a requirement. Paying by text is a solution that keeps both customer and restaurant staff (delivery, server, drive thru window, etc.) safe. A Mastercard study showed that almost half of all consumers now prefer to use mobile payment options due to infection concerns, plus nearly eight in 10 say they already use contactless payment.

Let them Pay by Text

Paying by text couldn’t be easier – for the restaurant and for the customer. The customer places an order and receives a “heads up” text when the delivery is on the way. When the food arrives, the customer receives a text with a link to pay by text, they open the secure payment link, add a tip, and tap to pay. The restaurant instantly sees payment and texts back a personalized “Thank you” message.

Raise Effective Customer Engagement

While paying by text and two-way messaging make a big difference without any bells and whistles, restaurants can also maximize customer engagement with features that make the experience even more personal, such as:

1. Integrating text payment and messaging with a pre-existing POS
2. Setting up a “How was your food?” text survey
3. Updating customers with a text messaging campaign announcing COVID-19 Hours of Operation
4. Building a customer contact database with SMS marketing campaigns around special deals and discounts for those who opt in

These are solutions that restaurants can implement quickly or gradually – either way it means they’re connecting with customers and providing a safe way to collect payments, which is exactly what restaurants need right now.

The post The Future for Restaurants is Touchless appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint Titled: Contactless POS Payments Finally Ready For Prime Time

Contactless payments have crossed the tipping point:

• A customer walking into a big box store, a chain QSR, or an independent shop or restaurant has a better chance than not of being able to transact contactless
• By summer 2020, NRF reports that nearly 60% of merchants accepted contactless payments
• Entering 2021, its likely that at least 75% of US Merchants accept contactless payments
• According to Mercator Advisory Group, 79% of small businesses have seen an increase in contactless payments
• Originally, lack of POS terminal compatibility was contactless payments main obstacle
• The life cycle of POS terminal is 5-7 years, and though most terminals introduced 2015 and beyond had contactless – not all merchants turned it on.

Abstract of the Viewpoint

Several years in the making, contactless payment cards are finally arriving in large numbers at mailboxes throughout the U.S., as domestic cardholders catch up with the rest of the world. But contactless goes beyond plastic cards, with mobile apps providing another payment option for consumers to choose. While COVID-19 has accelerated contactless in 2020, payment providers and merchants now see that no-contact POS transactions can be a differentiating strategy to engage and expand their customer base beyond the pandemic. 

The post Contactless Payments Have Crossed the Tipping Point: appeared first on PaymentsJournal.

Online merchants found some joy in the recent holiday shopping season. Afterpay reports that U.S. 2020 Q4 transaction size was up 30% compared with the same period in 2019. It helped that holiday buying got off to an early start in October since retailers moved their traditional Black Friday deals earlier in the season.

Then the increased popularity of Buy Now-Pay Later (BNPL) provided added lift as well. Afterpay now offers an in-store purchase option that links to either Apple Pay or Google Pay. How fast consumers return to in-person shopping remains an open question, with Q3 probably being most likely, given the current Covid status. In the meantime, online BNPL will continue its upward trend.

The following excerpt from a Yahoo Finance article reports more on the topic:

Afterpay released consumer shopping trends for the Holiday 2020 shopping season for October 1st through the end of December 2020. Based on this data, consumers expanded their gift giving lists and shopped for more items compared to last year. The average basket size for Afterpay customers in the US increased by 30% when comparing the 2020 and 2019 Holiday shopping seasons. Traffic to Afterpay’s brand partners was also strong, as the company saw a 145% year-over-year increase in referrals to global merchants from its Shop Directory.

Alex Fisher, VP of Retail for Afterpay said: “As shoppers returned to stores this holiday season, we saw a rise in services like Buy Online, Pick Up In Store (BOPIS) and contactless payments. Afterpay is at the forefront of these safe and seamless shopping experiences. According to a recent survey of Afterpay in-store shoppers, 32% of customers had never used contactless payments prior to trying it with Afterpay.” 

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Afterpay Sees Buy Now-Pay Later Holiday Sales Jump appeared first on PaymentsJournal.

The use of contactless cards and mobile wallets for payments has experienced expedited growth during the pandemic thanks to consumers’ wish to avoid grimy POS terminals. Mercator Advisory Group data finds that consumers have been switching to contactless as a new way to pay and those who used contactless prior to the onset of the global pandemic are using it more in recent months. One area where contactless use has shown great adoption is with transit. Who wouldn’t want to avoid the turnstiles or payment points on trains and buses? 

While far fewer individuals are commuting through public transportation these days, the Metropolitan Transportation Authority in New York took the opportunity to upgrade all of their subway stations throughout the system and their thousands of buses to accept contactless tap-and-go technology with the assumption that ridership will someday return to more typical, pre-pandemic levels.

Here’s what The Verge had to say on the topic:

The Metropolitan Transportation Authority announced Thursday that it had completed the rollout of tap-to-pay scanners at all subway stations and on all of its buses throughout the city. The MTA has been installing the system, called OMNY, since May 2019 as part of a modernization effort to phase out the plastic MetroCards that have been in use since the ’90s. The new tap-to-pay system is available at 472 stations and on 5,800 buses in total, the MTA said.

Tap-to-pay is supposed to speed up entry into buses and subways and reduce costs throughout the transit system, officials have said. It’s also just meant to be simpler and more modern

You need a phone or card that supports contactless payments in order to use the OMNY system. Later in 2021, the MTA will begin selling OMNY tap-to-pay cards — an important addition since not all riders have a smartphone or credit card. Support for reduced fares for senior riders and riders with disabilities will come at some point this year, too.

Overview by Sarah Grotta, Director, Merchant Services at Mercator Advisory Group

The post Contactless Payments to Replace New York’s MetroCard by 2023 appeared first on PaymentsJournal.

PSCU, the nation’s premier payments credit union service organization, has updated its weekly transaction analysis from its Owner credit union members on a same-store basis to identify the impact of COVID-19 on consumer spending and shopping trends. Our infographic is also attached.

To provide relevant updates on market performance, experts from PSCU’s Advisors Plus and Data & Analytics teams today released year-over-year weekly performance data trends. In this week’s installment, PSCU compares the 49th week of the year (the week ending December 6, 2020 compared to the week ending December 8, 2019). Week 49 performance data includes Cyber Monday (Nov. 30) and Giving Tuesday (Dec. 1).

“Growth rates rebounded to strong pre-Thanksgiving levels in Week 49, with positive spend performance in both debit and credit,” said Glynn Frechette, SVP, Advisors Plus at PSCU. “Following a dip in payment volume during the Thanksgiving holiday week, we saw a quick return to strong holiday spending buoyed by a record Cyber Monday. Strong performance in Card Not Present activity was fueled by healthy sales on Cyber Monday, strengthening cumulative holiday spending this season.”

•       Card payment volume growth rates returned to their strong pre-Thanksgiving week levels in Week 49 for credit and debit despite the continued rise in COVID-19 cases.

o       Debit card spend remains well above last year’s results. For Week 49, debit purchases are up 18.1%, above the four-week average of +14.4%. Transactions are back up 3.4%, above the four-week average of +2.2%.

o       Credit card spend has risen into the positive again, finishing up 5.7%, in line with the four-week average of +5.1%. Transactions finished at +0.7%, higher than the four-week average of -0.1%.

•       Consumers continue strong usage of contactless, mobile wallets and card not present (CNP) alternatives, while using less cash.

o       Contactless “tap-and-go” transactions via dual interface cards continue to gain adoption, with debit showing notable strength. Debit contactless transactions as a percent of card present activity on contactless debit cards have doubled from around 8.4% in mid-January to 17.5% in Week 49. Contactless credit transactions have also grown from 6.5% in mid-January to 11.9% of card present activity on contactless credit cards in Week 49. We continue to view these results as conservative, as the ratio considers the proportion of contactless activity to all card present transactions, not just those able to be tapped.

o       Mobile wallet (i.e. “Pays”) transactions and purchases for both credit and debit cards continue to show good growth with card present activity. Debit mobile wallet purchases finished Week 49 up 62.1% year over year, higher than the four-week average of +60.3%. Credit mobile wallet purchases are up 51.3% year over year, higher than the four-week average of +46.5%. These results represent six supported mobile wallets: Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay and Samsung Pay.

o       We continue to see more volume conducted via Card Not Present (CNP) transactions and this category benefited significantly from Cyber Monday. For credit, 60.1% of purchase volume and 51.3% of transactions are CNP. For debit, 48.4% of purchase volume and 34.2% of transactions are CNP. Purchase mix has held steady and is up 7.8 percentage points year over year for credit and 7.9 percentage points for debit. Transaction mix also remains steady, up 11.2 percentage points for credit and 8.4 percentage points for debit year over year.

o       Cash withdrawal transactions at the ATM remain down year over year. For the most recent week, the number of cash withdrawals was down 18.4%, higher than the four-week average of -20.2%. For the pandemic period of Weeks 13 to 49 total cash withdrawn is down 14.2%.

•       From a merchant category perspective, purchase growth rates in Week 49 for most sectors returned to pre-Thanksgiving week levels for both credit and debit.

o       Grocery spend was up 15.6% year over year for credit and 10.8% for debit, one of the sectors with the largest improvements for the week.

o       Spending in the Entertainment sector also saw significant growth for Week 49. Although year-over-year spending is still down, credit finished at -42.7%, an 11.5 percentage point increase from the previous week. Debit spending finished at -23.9%, a 15.4 percentage point increase from the previous week.

o       Service also saw large improvements week over week. For Week 49, credit spending finished up 16.6%, a 14.7 percentage point increase from the previous week. Debit spending finished up 24.1%, a 19.2 percentage point increase from the previous week.

o       Spend in the Drug Stores sector slowed in credit, but saw a small increase in debit. Purchases are up 2.6% for debit, an increase of 1.8 percentage points week over week. Credit purchases are up 5.9%, down 2.4 percentage points from the previous week.

•       Our regional analysis of spend utilizes the segmentation used by the U.S. Bureau of Economic Analysis (BEA) for economic analysis. Please see the attached infographic for a map of changes to credit and debit purchases by region.

o       Overall U.S. spend was up 5.7% for credit purchases. The Southeast (+9.3%) finished as the strongest region for Week 49. The New England (+0.9%) and Rocky Mountain (+0.5%) regions had the lowest credit purchase performance.

o       Overall U.S. spend was up 18.1% for debit purchases. The Southeast (+20.4%) finished as the strongest region for Week 49. While the New England (+15.7%) and Rocky Mountain (+13%) regions had the lowest debit purchase performance, they still finished the week strong.

o       PSCU’s Weekly U.S. State/Territory Analysis is available at www.PSCU.com/COVID19, ranking U.S. states and territories by year-over-year performance for debit purchases, credit purchases and ATM transactions.

•       This week’s deeper dive continues to explore Holiday Spending in the Goods sector. The holiday shopping season arrived earlier this year, with many retailers advertising Black Friday sales throughout the month of November.

o       Purchases within the Goods sector over the cumulative reported holiday period thus far (Nov. 2 – Dec. 6) are up 19.3% for credit and 27.4% for debit. So far in the 2020 holiday period, the two weeks preceding Thanksgiving (Nov. 9 – Nov. 22) have yielded the strongest year-over-year increases in purchases for credit and debit.

o       Goods remains one of the sectors positively impacted by the COVID-19 pandemic, with much higher Card Not Present (CNP) activity, as more consumers are holiday shopping online than in physical stores. CNP purchases within the Goods sector over the cumulative reported holiday period are 57% for credit, up 9.8 percentage points, and 40.1% for debit, up 7.8 percentage points.

o       For credit cards, Card Present (CP) activity is showing the effects of the growth in CNP. For this five-week holiday period, CP credit purchases are down 2.7% and CP credit transactions are down 8.7%. CP debit activity has stayed above 2019 levels with CP debit purchases up 12.7% and CP debit transactions up a modest 2.9%.

o       Average purchases within the Goods sector are up 4.5% for credit and 11.6% for debit.  Consistent with previous observations of consumer behavior favoring debit cards, the average purchase amount for CNP debit is up 14.4% or $6.85 compared to the same five-week holiday period in 2019. For the same subset on credit cards, the increase is 5.7% or $4.35.

o       With holiday sales starting earlier than in prior years, there was a decreased impact from the shopping days immediately after Thanksgiving. As Week 49 started with Cyber Monday (Nov. 30), it appears higher purchasing volumes have resumed. Credit purchases are up 15.5% and debit purchases are up 32.9%. Credit CNP purchases are 70.4%, up 5.8 percentage points, and debit CNP purchases are 52.3%, up 6.3 percentage points.

o       On Giving Tuesday (Dec. 1), credit purchases in the Charitable and Social Service Organizations category are up 68.2% and debit purchases are up 38.5%.

o       We will continue to report on the weekly and cumulative holiday spending through the end of 2020. Please note that PSCU will not publish Transaction Insights on Dec. 28, due to the holiday break, but will return on Tuesday, Jan. 5.

The post PSCU appeared first on PaymentsJournal.

It’s not news to anyone that the global pandemic has changed the way we live. Restaurants have limited capacity seating, holiday events have been cancelled, and buyers are opting for online rather than in-store purchases.

In the era of the “new normal,” more and more consumers are implementing contactless payment methods into their daily spending routines. With the assistance of new data from the annual Eye on Payments Study conducted by PSCU, PaymentsJournal sat down with Tom Pierce, Chief Marketing Officer at PSCU, Norm Patrick, VP of Advisors Plus Consulting at PSCU, and Ted Iacobuzio, VP and Managing Director of Research at Mercator Advisory Group, to discuss some of the purchasing trends emerging in the wake of a COVID-19 altered reality.

An increase in online shopping

Unsurprisingly, respondents in this year’s installment of the Eye on Payments Study showed an increase in shopping online. According to the data, the number of survey respondents who said they shopped online a few times a week increased by nearly 50%, as reflected in the chart below.

“One of the more pronounced changes,” said Patrick, “has been with credit union members who make online purchases at least a few times a week, which is up nearly 50% since pre-pandemic.” And this doesn’t just go for the younger generations, but throughout all various generational segments as well.

Twenty-two percent of credit union (CU) members said they will continue this purchasing behavior post-pandemic. “I will watch that [trend] very closely,” remarked Iacobuzio. It is important for CUs and other FIs to understand which behavioral changes are temporary and which will remain once the economy has weathered the COVID storm.

CU members and contactless payments

One clear piece of evidence that can be taken away from the study is that there has been significant interest and growth in regards to contactless card usage. From 2019 to 2020, the percentage of credit union members with access to a contactless card has nearly doubled.

As consumers seek out “clean” forms of payment that limit or eliminate human contact, there has been a 72% year-over-year increase in survey respondents who report having a contactless card. “They’re projecting, even after the pandemic, that 69% [of survey respondents] will be using contactless cards on a regular basis,” said Pierce.

Unsurprisingly, the majority of respondents reported that they used their contactless card most frequently at essential businesses, with grocery stores coming in at the highest frequency rate (61%), followed by fast food/casual restaurants and pharmacy (41% each), which are closely trailed by gas/fuel (40%). Convenience stores also received a good amount of contactless payments (34%), with full-service restaurants finishing off the list (31%).

“As more and more of these retailers start to provide access to contactless cards at the point of sale, you can see that consumers are going to be more actively choosing this really clean form of payment behavior,” said Pierce. “But it’s not just on contactless, there’s clearly opportunities on the mobile payment side as well.”

Opting for the safest choice

Driven by fears of contracting COVID-19, most consumers choose to err on the side of caution. “Food pick-up or delivery being ordered through a mobile device has gone up 50% during the pandemic period,” said Pierce. “Seventy percent of respondents say they make decisions about how to pay primarily based on what is the most physically safe type of opportunity at the point of sale.”

It is clear that COVID has had a significant impact on what consumers are choosing in terms of their purchasing behavior and payment options. Most respondents indicated that they expect to continue using these channels post-pandemic.

More CU members use a mobile wallet

Along with the increased usage of contactless payments, there is also an uptick in consumers who use mobile wallets and digital banking. “Looking back to 2019, 32% of our respondents had stated they were likely or extremely likely to use a mobile wallet in the next six months,” said Patrick. “And in our 2020 study that increased to 38%, lift[ing] [mobile wallet usage] about eight percentage points year over year.”

When comparing CUs to non-CUs, there is a noticeable gap between consumers who are using a mobile wallet. Forty-nine percent of survey participants that belong to a CU reported using a mobile wallet, while the non-CU participants came in at only 28%.

“Mobile banking also continues to trend up,” continued Patrick. “We’re seeing that respondents who either make payments or do their banking by a mobile device were up three percentage points year-over-year.” While debit remains the preferred method of payment (41%), 35% of participants stated that they prefer using credit, reminding CUs that traditional payment methods are still very important to consumers.

Payments through generations

Across generations, it is not uncommon to find differences in payment preferences. According to the study, the Boomer generation has seen the least change in their payment preferences since COVID-19 began. Before the pandemic, 48% said they shopped online at least a few times per month, and that number has risen by 27% during COVID-19.

Gen X and “older Millennials” still have a preference for debit card use, but their interest in credit cards as payment methods has grown notably. Prior to the pandemic, 62% of Gen X respondents used contactless cards at least a few times a month, as opposed to the 74% reporting now, with that number expected to continue to steadily increase.

“Older Millennials” continue to be avid online shoppers, with the pandemic increasing the frequency of online purchases. Thirty-seven percent reported shopping online at least a few times a week prior to the pandemic, with that number increasing to 45% as a direct result of COVID-19. “They, like their younger counterparts, tend to make payments or do mobile banking on their mobile phones,” remarked Patrick.

Millennials in their mid-to-late 20s and early 30s are a mobile-savvy generation and openly embrace new technologies. This generation, as their predecessors, still lean toward debit as their primary form of payment, but they do show a higher interest in mobile wallet technology. Six percent of younger Millennials even cited their mobile wallet technology as their preferred payment method.

Gen Z, the youngest generation of adult consumers, indicates a strong preference for debit. In fact, they are the demographic that most prefers debit cards, with 44% of respondents from 18-22 choosing their debit card as their preferred method of payment, up from 39% in 2019.

This generation also reported strong contactless card usage prior to COVID-19, which has only increased since the pandemic hit. Seventy-four percent report using their contactless card at least a few times a week since the start of COVID-19. “The Gen Z group has been the most impacted from a lifestyle perspective here, reporting the most negative financial effects from COVID-19 relative to a loss of job, income or health care coverage,” added Pierce.

Takeaways

While most CUs managed to adapt to the COVID-19 lifestyle, they must now be looking ahead at a post-pandemic world. Within the “new normal,” some consumers may never want to step into a branch again, while others may prefer to return to the in-person style of banking. It’s important for CUs to make sure all channels are working together seamlessly, so that each consumer has a personalized experience that meets the expectations of every individual.

To keep customers satisfied, CUs must keep pace with member demand for new technology and compete with other FIs. They must keep innovating the digital space, especially as AI and biometrics advance. CUs must be careful to gauge what their customers want and expect, rather than innovating for the sake of it.

And with these new technologies, “it’s really the role of the credit unions to help make members more comfortable with a lot of these new emerging payment forms,” remarked Pierce. CUs have a responsibility to educate their members about fraudulent events, emerging technologies, and more. With many people reporting they do not feel safe using contactless cards or mobile wallets, CUs must continue to focus on safety and security features while simultaneously meeting consumer demands and expectations.

Debit remains the first preferred payment method amongst those surveyed, even during the height of the pandemic. It is used most for everyday shopping—groceries, restaurants, retailers—while credit cards continue to be most popular for larger purchases.

Lastly, CUs need to push their members to choose their CU-issued card across all channels, whether in mobile apps, online, or in stores. “The notion of safety and security is key,” added Iacobuzio. “But I’d like to add a third aspect, and that’s trust.” Once a user stores a card in their digital channel, it is likely they will keep it as a preferred payment method, and member trust in a CU is what will ultimately push the industry forward.

The post Credit Usage and Spending Trends in the COVID-19 Era appeared first on PaymentsJournal.

The rather tepid pace of change as it relates to mobile adoption in North America for commercial cards has finally started to reverse and pick up some momentum. We have been discussing this lagging expectation for several years, most recently in the commercial cards forecast report earlier this year. 

Once again the ongoing pandemic has driven increased demand for a touchless experience at the POS. This release was picked up at businesswire and announces the collaboration between Mastercard, TSYS (part of Worldpay) and Extend, the New York based-startup specializing in digital payments infrastructure and virtual cards.

‘The new mobile virtual card solution addresses the growing demand for digital, contactless commercial payments, which has been amplified by the changing nature of work and business expenses during the pandemic, and the rise of the work-from-home economy. Previously, one of the main barriers to wider adoption of virtual cards has been the inability to load them into a mobile wallet for use at physical point-of-sale terminals. With this new solution, employees or contractors can load their virtual corporate card into their mobile wallet to easily initiate contactless payments with their mobile device.’

So this announcement comes on the heels of another network partnership announcement that highlighted several modular digital B2B payment system enhancements, with mobile being one. As we also know however, there are two sides to every coin. So as one side of mobile commercial card usage, issuing, is becoming widely available, another side, the point-of-sale, remains a bit confused, as is neatly summarized in this posting. 

Once that works itself out over x period of time (which should be on an accelerated path as well), it is likely to replace the vast majority of physical plastics, although contactless cards will likely persist, although more so on the consumer side. The virtual card also provides more safety and control than issuance of physical cards, with additional utility among contract labor and non-frequent travelers, etc.

“‘This solution provides a more secure, reliable product that will help financial institutions and businesses streamline B2B payments by increasing their flexibility to pre-approve and manage transactions on a much more granular level than before,” said Gaylon Jowers, president, TSYS Issuer Solutions and senior executive vice president, Global Payments. “From new employee onboarding to last minute or first-time travels, our unique ability to tokenize the virtual account number, combined with the technology and innovation of Extend and Mastercard, opens up a multitude of new use cases for virtual cards in corporate payments.”

“Over the last several years we’ve seen a tremendous uptick in virtual card interest across the industry, but until now, they were irrelevant for in-store purchases,” said Andrew Jamison, CEO, Extend. “This partnership with TSYS and Mastercard has really eliminated the last thing holding virtual cards back from fully penetrating the market and showing us how much potential they really have.’” 

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Mastercard, TSYS and Extend Launch Mobile Virtual Card Solution for Commercial Clients appeared first on PaymentsJournal.

The adoption of contactless payments in the U.S. has been underwhelming to say the least. Whether it’s via a contactless enabled card, a universal wallet (e.g., Apple Pay, Google Pay) or a store based wallet like Starbucks, only about one in five consumers have reported ever paying using these contactless methods for paying.

The graph below comes from our North American Payments Insights study which is a survey of 3,000 American adults. In this study, we asked people if they used contactless ways to pay before or since the pandemic arose. The reported use of contactless payments is pretty darn low for a technology that has been around for quite some time (in technology time), and that is much more widely used in other countries. Further, even with the widespread panic brought about by COVID and the fears of contact contamination only about 10% of new people used these payment modes.

An opinion piece in the NY Post, One-touch payments remain infuriatingly absent in America, puts the blame for lack of adoption squarely on the merchants inability or unwillingness to accept contactless payments with some shade being thrown on the merchant acquirers who provide the card readers at the point of sale.

Merchants, the most sympathetic party, are the culprits. Many smaller stores lease credit-card terminals from bigger networks, who have their own rules. ­Retailers who fear liability for fraud prefer to stay on the safe side — sticking to what they’ve done for decades.

The move to contactless is a complicated one. Particularly in the U.S. payment ecosystem which has a ridiculous number of players in the system. Placing the blame on one or two parties in this seemingly simple change to the way we pay is, quite frankly, a little naïve.

As I pointed out in a blog post this summer, there is enough “blame” (if you choose to call it that) can be spread out across all the stakeholders. At the risk of repeating myself I think the points I made at the end of July still apply:

How did we get to this point? Rather than assign blame, I think it is best to talk about how we overcome the obstacles.

Make “We Accept Contactless” Mean “We Accept Contactless”…Just Not Yours – There are competing standards and technologies currently required to accept the different versions of contactless. It is unreasonable to expect a merchant or consumer to know or care about this. When they see the contactless logo on a terminal, they should be able to use/accept contactless payments in all its forms.

Merchant education – Merchants, including frontline staff, need to know what contactless payments are and how they are accepted. Solve item 1 above and this will become materially simpler.

Consumer education – Just telling consumers that their card can now be used to “tap & go” or can be loaded into a wallet is not enough. They need to have a compelling reason to switch from tried and true payment methods before we can expect mass adoption. They also have to know they have a contactless card. Many people don’t know they have the capability available on their card. Solve item 1 above and this will become easier.

Broader issuance – Major issuers are phasing in contactless cards as expired and lost/stolen replacement cards are issued. This is going to take time. Even when we get to near universal issuance, item 3 above will be required. 

On top of these suggestions to increase the use of contactless, the author of this piece make a very good point that I failed to make in July.  There are still too many merchant acquirers who are asking for signatures and other POS interaction and data that are unnecessary and confound the seamlessness of a contactless transaction.

One merchant ­requires a phone number. ­Another wants e-mail. One ­machine wants you to pick credit or debit. Another insists you OK the amount. Still others want a signature. Then, another tap, for “OK.” There’s also the dreaded “chip malfunction.”

Not to mention that the major networks haven’t required signatures as an authentication solution some time ago.

Alas, something that is seemingly so simple is much more complicated that one have previously thought.

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post Contactless Acceptance and the Blame Game appeared first on PaymentsJournal.

Contactless payments have taken a leap forward during 2020, in part driven by concerns around the potential spread of COVID-19. In the Nordics, the contactless payment ratio has grown from around 57 per cent in early January to 75 per cent of all in-store card payments in late October this year, according to data from Nets, a leading Nordic payment provider.

Contactless payments have been encouraged by health authorities and merchants to limit physical contact among consumers during the pandemic. The result has been that behavioural changes anticipated to take years have happened in mere months.

In Norway and Denmark, the governments imposed strong restrictions on social activities from late March, leading to a surge in contactless payments across shops and restaurants. In Norway in January 2020, only 35 per cent of payments were made contactless; by late October, it had more than doubled to 77 per cent – overtaking Sweden and Finland in the process. During just one week of the Norwegian lockdown, the share of contactless payments jumped six points.

In Sweden, where authorities took a less restrictive path to fight the pandemic, use of contactless payment has shown steadier growth during the year, rising from 44 per cent in January to 60 per cent of all in-store card payments by late October.

Denmark is leading the pack with around 86 per cent of all card payments in physical shops made contactlessly in the last week of October. Norway is second with a share of 77 per cent, with Finland third at 70 per cent.

Contactless payment are transactions initiated by contactless interaction between the consumer’s card and the merchant terminal, even if a PIN-code may also be required when the payment exceeds a certain limit. To further facilitate adoption, Norway increased the transaction limit to pay contactlessly without inputting a PIN code from NOK 400 to 500, while Sweden doubled the amount from SEK 200 to 400 in mid-April. In Denmark, the limit has been DKK 350 for over two years.

The contactless limit set by EU law is EUR 50, which is honoured in Finland. Contactless payments through mobile devices, such as Apple Pay and Samsung Pay, work on all payment terminals with contactless functionality and have no transaction limit, as the purchase is approved through mobile verification.

The post COVID-19 Drives Further Growth in Contactless Payments appeared first on PaymentsJournal.

Every financial institution should deploy a secure mobile app to account holders with a mobile device and leverage that app for authentication across all consumer channels, including e-commerce, using EMVCo 3D Secure. By standardizing on the mobile device app, overall security is greatly enhanced, as is your brand awareness. 

Putting a fingerprint on the payment card is relatively expensive as it represents an additional infrastructure that needs to be maintained and adds cost for the card-based fingerprint reader itself. But manufacturers of card-based fingerprint readers are pushing hard:

“From facilitating hygienic payments to enabling secure remote working, biometrics has truly proven its value in recent months.

In payments, momentum was already gathering before the pandemic for biometric payment cards, with the first biometric payment card certified by a payment network in early January. The recent rise in popularity of traditional contactless cards as a more hygienic, convenient payment option has also further highlighted the benefits of biometrics in payments. By adding strong authentication to contactless cards, banks finally have the ability to remove the contactless cap and deliver consumers a truly ‘touch-free’ contactless payment experience, regardless of the amount.

Unsurprisingly, adoption timelines have accelerated in recent months, with BNP Paribas announcing its fast-tracking launch of its first commercial biometric payment cards this autumn. With more banks predicted to follow in quick succession, we estimate that by 2026 around 3 billion biometric payment devices will be shipped every year, including wearables, USB dongles and other form factors too.

In the security market, the business case for biometrics has also become clearer. With flexible working becoming the ‘new normal’ and the vehicle industry turning its eye to biometrics, it has become clear that more secure, convenient and hygienic access control solution are more important than ever before.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Biometrics on Your Card? Maybe as a Stopgap for Those without a Mobile Device? appeared first on PaymentsJournal.

Don’t bother waiting for a table—there aren’t any. That would be Chipotle’s new restaurant concept that only accepts digital orders for take-out or delivery. Responding to the remote order and pay trend, driven by Covid-19, QSRs and fast casual chains are pivoting to handle this expanding sales channel. Restaurant operators will save on commercial rent costs, since less space is needed with this new layout. Starbucks is also trying the digital only approach with some new stores as its mobile order and pay transactions have surged. Expect to see other restaurant brands follow suit.

The following excerpt from a CNBC article reports more on the topic:

• Chipotle Mexican Grill’s first digital-only restaurant opens Saturday in Highlands, New York.
• The design does not include a dining room or a line for ordering.
• Chipotle’s digital sales more than tripled in its third quarter, accelerated by the coronavirus pandemic.

Unlike a traditional Chipotle location, it will not include a dining room or a line for ordering. Customers have to order in advance on Chipotle’s app, website or third-party delivery platforms.

The new restaurant design is meant for urban areas, where real estate is more expensive and a full-size restaurant isn’t possible, but the first location will open in Highland Falls, New York, just outside of the gates of West Point. The design will also be able to accommodate large catering orders, which will have their own entry and lobby for pick-up.

The coronavirus pandemic has accelerated customers’ shift to ordering online, pushing Chipotle to try to optimize the experience as much as possible. In the third quarter, the company reported that digital sales more than tripled. CEO Brian Niccol said total digital orders could exceed $2.5 billion this year, more than double last year’s total.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Chipotle Fires Up Digital Only Restaurant Ordering Model appeared first on PaymentsJournal.

Consumers love home delivery. They’re willing to pony up annual fees for delivery fee savings as well as to grab coveted delivery time slots. So national grocers such as Ahold Delhaize, Albertsons, and Kroger are more than willing to accommodate them.

Amazon has really set the pace here as its Prime customers receive benefits at Whole Foods, as well as many other services and perks. Not to be left out is the Walmart+ program that the retailer began in early 2020 that centers around its grocery stores. Expect the subscription economy to continue to grow post-pandemic as more retailers enjoy the annuity revenue from customers who keep signing up.

The following excerpt from a Grocery Dive article reports more on the topic:

As retailers eye new ways of locking in loyalty among a consumer base that has dramatically shifted to digital shopping, many are looking to membership programs that offer unlimited delivery or pickup for a fixed fee.

Kroger and Albertsons are both offering unlimited-delivery subscriptions, while SpartanNash has a pickup program that offers no-fee fulfillment for just under $50 a year. Last week, Ahold Delhaize announced it will launch a subscription program with The Giant Company, its Carlisle, Pennsylvania-based banner, starting next year.

These programs promise to secure loyalty among consumers that are spending on average $95 per order, according to Brick Meets Click. They’re also a competitive response to Amazon, which is offering steep discounts through its Prime program as it flexes its muscles in grocery, as well as Walmart, which earlier this year rolled out Walmart+, a membership program that offers mobile scan-and-go and fuel discounts in addition to unlimited no-fee delivery.

“The industry is getting pushed in this direction,” said James McCann, a former CEO of Ahold USA who now serves as an investor and advisor to companies like Takeoff Technologies and Afresh. “I think it’s going to become a big part of the game plan at all the major grocers.”

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Subscription Plans Rolling Up Customers For Online Grocery Delivery appeared first on PaymentsJournal.

Which way to curbside pickup? This has become a more common question among shoppers driving to the grocery stores to get their online orders. No retail vertical has seen more e-commerce sales growth than grocery. Many supermarket chains are reporting triple-digit online sales increases year-over-year. That’s the good news. But the catch is that online order fulfillment is costly no matter how the customer chooses to get the order—via delivery or curbside pickup. Grocery store space re-alignment will improve cost efficiencies as well as the customer experience. The addition of contactless payment options will also become a staple of grocery store shopping even after the pandemic.

The following excerpt from a Wall St. Journal article reports more on the topic:

Supermarkets are using pandemic-driven changes in shopping behavior to accelerate the shift to e-commerce they have been seeking but have been slow to realize in recent years.

Grocers are now devoting more of their floor space to fulfill digital orders in response to customers’ increased food consumption at home and their growing reliance on online shopping.

Albertsons Cos., the country’s second-largest grocer, is testing the use of dozens of 9-by-12 foot temperature-controlled lockers in select stores in Chicago and California for customers to collect what they buy online. It is also introducing contactless payment in all of its more than 2,200 stores.

“The principle of that is to make things easier for the shopper,” said Vivek Sankaran, chief executive of the Boise, Idaho-based chain. He also said the pandemic has prompted the company to make a fundamental change by prioritizing digital investments.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Online Grocery Sales Drive Store Re-Alignment appeared first on PaymentsJournal.

Having it your way will become even more personalized. Future visits to the drive-thru at Burger King, Popeyes, and Tim Hortons—all owned by Restaurant Brands International (RBI)—will feature an upgraded ordering video board.

A predictive buying system will use past orders, weather, and seasonal specials to suggest a customer’s menu choices. Contactless payment options will be available as well. This upgrade to RBI’s drive-thru lanes follows McDonalds’ purchase last year of Dynamic Yield, a machine learning tech firm that aims to improve the drive-thru customer interface and boost sales.

Quick service restaurants (QSRs) are seeing most sales coming via the drive-thru during the pandemic, and that’s why they are investing heavily in this technology. Digital ordering and drive-thru pickup will continue to grow as part of consumer’s buying behavior well after Covid-19.

The following excerpt from a Radio.com article reports more on the topic:

The future has arrived at Burger King, Popeyes and Tim Horton. Restaurant Brands International, which owns all three chains, has announced plans to upgrade drive-thrus at over 10,000 restaurants across the United States and Canada that will make your experience faster, and in some cases, may even predict what you want, reported CNN.

The modernized system involves installing over 40,000 digital drive-thru screens with “predictive selling” technology that can suggest items based on previous orders, trending promotions, time of day and local weather. Forecast calls for a Double Whopper with cheese!

“Our guests have sought out our drive-thru lanes for our iconic food and beverages throughout the COVID-19 pandemic — even in the face of mandated dining room closures around the world,” Jose Cil, CEO of RBI, said in a statement, according to the NY Daily News.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Burger King To Beef Up Drive-Thru Ordering System appeared first on PaymentsJournal.

Apple’s Tim Cook says that Apple and the COVID pandemic helped push contactless payments into the payments mainstream, according to this report by Fast Company, accomplishing a goal payment brands and credit card issuers sought for over the past ten years.

• Yesterday Apple, the world’s largest tech company by market cap, had its quarterly financial call. While most of the call, as you would expect, was about hardware sales, Apple CEO Tim Cook made an interesting comment about how the pandemic is increasing the adoption of one specific type of tech in the United States: contactless mobile payments. Per Cook (via MacRumors):
• As you can imagine, in this environment, people are less wont to hand over a card. Contactless payment has taken on a different level of adoption, and I don’t think we’ll go back. The United States has been lagging in contactless payments, and I think the pandemic may very well put the U.S. on a different trajectory there. We are very bullish on this area, and there are more things that Apple can do in this space, so this is an area of great interest to us.

The article points to adoption rates across the globe.

• As far as countries go, unsurprisingly, China is the country with the highest adoption of mobile contactless payments. Forty-seven percent of the population uses the tech.
• Norway is a close second at 42%, followed by the United Kingdom (24%), Japan (20%), and Australia (19%).
• Right now, the United States stands in seventh place, with 17% of the population using mobile payments. 
• However, if Cook’s comments are correct (and given that Apple Pay is the third-most-popular mobile payment system in the world, he should know), the U.S. could soon leapfrog Columbia, Australia, and maybe even Japan to become the fourth-placed country where mobile contactless payment adoption is the highest.

The back story comes from a U.K. fintech that says wallets, not the issuers, drive contactless growth.

• Capital on Tap is the latest U.K. fintech company to offer its customers full integration with the most popular digital wallet apps – Google Pay and Apple Pay. 
• The digital payment market, which includes all consumer transactions made over the internet and on mobile devices, has been on the rise for over a decade. In 2020, there have been over 779 billion digital transactions worldwide, and this number is expected to grow at a 13% rate in the coming years. 

Citing Statistica data, the estimate is that the number of contactless payments will hit 95 billion in 2020 and 150 billion by 2022. Data from the World Payments Report indicates that cash payments will drop from more than 30% in 2018 to about 17% by 2022, to benefit credit, debit, and mobile payments.

The same sentiment on wallets being the driver comes through in their analysis. Although the transactions process through top banks like Barclays, Chase, and Santandar, the vehicle is the wallet, not the card.

• Recent years have seen a huge development in mobile payment apps. From long-established apps like PayPal to more recent ones like Google Pay, Apple Pay, or Samsung Pay to local players like Alipay or WeChat, users now have a whole array of payment apps helping them to make purchases online or via their devices seamlessly and securely. 
• The growing popularity is especially seen in China, where the two local mobile payment app players – AliPay and WeChat have over 1 billion registered users each. Current estimates are that 47% of all smartphone users in China are regularly using digital wallet apps, making it the world’s leader in the highest adoption of mobile payments.  

The most interesting set of numbers in the article estimate, again based on data from Statistica, mobile wallet users by company, with Alipay at 1.2 billion, WeChat at 1.1 billion, Apple Pay at 441 million, Google Pay at 100 million, Samsung Pay at 100 million, and Amazon Pay at 50 million. 

The takeaway for credit card issuers is clear. Contactless card enablement is table stakes, but aligning with wallets is critical for adoption.

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

The post Contactless Credit Card Payments: Hitting the Tipping Point Through Wallets appeared first on PaymentsJournal.

The evolution of consumer payment methods continues to unfold, reshaping payments decisively around the world. This has been especially elevated during the Covid-19 pandemic where transactions have increasingly shifted online as stores have been forced to physically close. Overall, the ways we pay are affected by our cultures, habits, innovations, and the technology available to us.

According to the Worldpay Global Payments Report, in 2020 the biggest trend in consumer payment continues to be the rise of mobile payments, making shopping easier than ever and already leading e-commerce payment preferences with 42% of spending in 2019—up from 36% since 2018.

Personalised customer experience

As we know, besides innovation, the commerce and banking sectors are striving to provide a multitude of payment methods, personalised according to the customers’ preferences, both online and in store.

While Deutsche Bank believes that cash will stay, the coming decade will see mobile payments grow at light speed, leading to a reduction in the use of plastic cards. Over the next five years, it is expected that mobile payments will comprise two-fifths of in-store purchases in the U.S., quadruple the current level. From retailer-specific apps to wallets issued by financial institutions, device manufacturers and technology platforms, mobile payments are providing convenience and safety to consumers and businesses around the world. In 2020 alone, over one billion shoppers will make a mobile payment.

Similar growth is expected in other developed countries; however, different countries will see different levels of shrinkage in cash and plastic cards. In emerging markets, the effect could arrive even sooner. Many customers in these countries are transitioning directly from cash to mobile payments without ever owning a plastic card.

Generation-Z – the children and young adults of today – also play a significant role in shaping the future of payments. Born and raised in a mobile-first world, this technology savvy generation makes up close to 26% of the global population. Learning how to navigate the world in the era of “fake news” and having their digital lives saturated with messages of questionable quality and authenticity, Gen-Z seeks more personalization, higher quality, and greater performance from businesses.

Brands seeking to earn the favor of Gen-Z will need to cater to their digital, flexible, and mobile-focused payment preferences as well. The ever-present smartphone is becoming the new wallet of choice for this generation and many consumers are choosing to put their preferred cards in their phone instead of carrying the physical card. This is driving big changes in global point of sale payment adoption: from 16% in 2018 to 22% in 2019.

China leads the way in digital wallets

We can deduce much about the future of payments (especially during the pandemic) from developments in China where the country is creating world-leading mobile payments infrastructure. There, the value of online payments is equivalent to three-quarters of GDP (71%), almost double the proportion in 2012. Today, just under half of in-store purchases in China are made via a mobile phone, way above the levels in other developed markets (25% in Germany and 24% in the U.S.).

Mobile payments already account for 22% of global point of sale spend in 2019 and it is projected they will account for nearly a third (30%) of consumer payments within five years. The growing share of mobile payments adoption will come largely from gradual declines in the physical use of credit cards, debit cards, and charge/deferred debit.

The COVID-19 factor

COVID-19 is expected to have a profound effect on the payment cards market. Contactless is considered the more hygienic and safe way of making payments. This trend is being reinforced by commerce ecosystem players who are advertising that contactless transactions increase safety and health. Globally, contactless adoption is projected to increase between +6% to +8% when compared to pre-COVID-19 expectations, while an additional 110 million contactless payment cards are expected to be issued in 2020.

In addition, Mastercard global transaction data and consumer research suggests a significant acceleration in the use of contactless payments. According to the poll results, the number of contactless card payments at supermarkets, groceries, and pharmacies during the March 2020 lockdown as a proportion of all face-to-face card payments, grew by 25% compared to the previous year. Citing safety and cleanliness, 79% of people worldwide and 91% in Asia Pacific say they are now using tap-and-go payments. The data reinforces how people look for alternatives in store, seeking to avoid handling cash, pens, and keypads in favor of a safe and quick tap to check out.

Finally, according to findings of an April 2020 report, contactless cards and mobile payments are growing in the U.S. and Canada as the coronavirus pandemic continues. Nearly one-third of consumers in the U.S. became first-time users of contactless payments during the pandemic, and the majority plans to continue paying contactless post-COVID-19. Contactless card payments in the U.S. are projected to increase eight-fold between 2020 and 2024, and mobile proximity payments are also rising rapidly.

In the next post, we are going to focus on financial fraud and the efforts the industry is taking to secure online, digital transactions. Meanwhile, you may read our Sensitive Data Protection in the Retail Card Payments Ecosystem brochure to understand how technology can provide complete protection of sensitive data generated during retail card payment processing activities.

The post The Future of Consumer Payment Methods in a Post-Covid-19 World appeared first on PaymentsJournal.

More fuel pumps are getting in on the contactless payment action. ExxonMobil is now fueling a dual function pay option via NFC (Near Field Communication) or QR code. A driver’s smartphone will handle either payment type and help speed up the transaction when tanking up.

Even faster is Exxon Mobil Rewards+ mobile app, which enables payment from within the car and gives loyalty points as well. Contactless pay is gaining traction as more consumers are becoming familiar with it. And it will someday becoming part of muscle memory similar to pulling out plastic from your wallet.

The following excerpt from a CStore Decisions article reports more on the topic:

To meet consumer demand for mobile payment options, ExxonMobil is rolling out a new two-in-one contactless payment solution using Near Field Communication (NFC) technology and QR codes.

More than 11,500 Exxon and Mobil stations across the U.S. will have this new technology at gas station pumps by end of year to enable customers to ‘point and pay’ using their smartphones.

Here’s how the technology works:

• Drivers can simply tap their smartphone on the QR code sticker or use the camera to scan the QR code to pay.
• Then, the customer authorizes payment using Apple Pay, Google Pay or the Exxon Mobil Rewards+ app and selects the fuel grade.
• For customers who have the Exxon Mobil Rewards+ app, the technology intuitively opens the app to proceed with secure payment.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post ExxonMobil Pumps Up Contactless Payments appeared first on PaymentsJournal.

The Empire strikes back. That would be JPMorgan Chase coming out with its own mobile solution for card payment transactions. The new service, called QuickAccept, will feature a contactless-enabled card reader as well as a mobile app payment method. A key differentiating feature will be same day, fee-free, funding to merchants’ Chase bank accounts.

This move is a competitive shot across the bow to PayPal and Square. Cash flow rules for small business and never has this been more critical than during the pandemic. Merchants will applaud this new service and benefit from the competition from payments vendors to win them over as clients.

The following excerpt from a CNBC article reports more on the topic:

• JPMorgan’s new QuickAccept service lets businesses take card payments within minutes, either through a mobile app or a contactless card reader, and users will see sales hit their Chase accounts on the same day.
• That fast funding is offered free, unlike competitors including Square, which typically take a day or more and charge a 1.5% fee to make instant transfers.
• The bank designed its QuickAccept card reader, a hardware device that processes card payments via tap, dip or swipe, internally with the help of a team gained from its 2017 WePay acquisition.
• JPMorgan will soon migrate “a large portion” of its more than three million small business customers to the new service, said Jen Roberts, CEO of the Chase business banking unit.

The bank is rolling out a checking account that is paired with a new fintech-inspired service called QuickAccept, according to JPMorgan executives. QuickAccept lets merchants take card payments within minutes, either through a mobile app or a contactless card reader, and users will see sales hit their Chase business accounts on the same day.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post JPMorgan Chase Launches Fast Card Payment Funding For Small Merchants appeared first on PaymentsJournal.

Enterprise Ireland hosted Fintech Frontiers will feature top executives from Citi, HSBC and more in a unique virtual event series October 19^th & 20^th

North America – October 15, 2020 – Enterprise Ireland, Ireland’s trade and innovation agency, will host a Fintech Frontiers, a virtual event series consisting of a variety of panel discussions with industry experts from Citi, HSBC, and more. The event scheduled for October 19^th and October 20^th will include discussions on the current state of the Fintech and Financial Service industry in North America, innovative technology demonstrations and the opportunity for industry experts to meet with leading Irish fintech companies.

Fintech and financial services, like many other industries, have been forced to pivot and shift to ensure relevancy in the new normal faced by Americans. Over the last eight months, the financial service industry has rapidly sped up its digital transformation to include further online banking services, contactless payment options, and more. In order to keep up with these transformations, banks and financial institutions need to focus on and invest in powerful, dynamic fintech solutions. Fintech Frontiers will highlight these key trends and market dynamics present in 2020 and give audiences further insights into the industry’s outlook for 2021.

Event discussions will also cover specific topics including community and regional banking in North America and how large tech companies are leveraging fintech to gain market share. The demonstration power hours will showcase innovative Irish companies, some of which are helping small businesses to better access capital and others which are helping banks to become better equipped to leverage data.

“We are very pleased to be hosting this timely event with top industry heavyweights and dynamic Irish fintech companies,” said Claire Verville, Senior Vice President of Fintech & Financial Services, Enterprise Ireland. “An event, such as this one, is crucial to uniting the fintech community and discussing the challenges they are facing. We look forward to showcasing the strength of Irish fintech companies and the excellent innovative technologies they are offering the financial services sector during a difficult time.”

This event will consist of panel discussions and technology discussions over the course of the two days, with opportunities to network and meet with leading Irish fintech companies showcasing their unique technologies and solutions.

This event is free to attend and open to anyone interested. To register for the Fintech Frontiers virtual event on October 19^th and October 20^th, please click here.

The post Top Industry Experts to Discuss Latest in Fintech Innovation and Industry Future During Two-Day Virtual Event appeared first on PaymentsJournal.

With all the focus on touch-free checkout experiences, one could wonder why all merchants haven’t adopted and configured their terminals to accept contactless cards and wallets. PaymentsSource offers up some background on just what a merchant has to go through to accept contactless:

“On the hardware side, you need a device that supports contactless by having the antenna that produces the fields that power the contactless card and allows communication, and you also need the correct software to communicate to that card,” said Andrew Jamieson, technology and security director at UL LLC (formerly Underwriters Laboratories).

In addition to having communication technology in place, merchants also have to be aware of specific software that each card brand requires so that kernels, or computer system cores, can “talk to the cards,” Jamieson added. “Then the payment application has to be aware of certain things to make the best use of a contactless card, and to finally set up the customer interaction.”

Mobile devices bring their own level of complexity, through a tokenized personal account number and a different cryptographic key to authenticate a transaction. All of that has to transfer through various layers of an operating system to the hardware, where Near Field Communication integrates to communicate to the terminal.

It is easy to see why retailers are increasingly confused about what to do next at a time when consumers have all sorts of payment options — and leaning toward contactless more than ever, said Maria Arminio, president of Avenue B Consulting Inc., a Redondo Beach, Calif.-based payments management consulting firm.

“It is difficult to reconfigure a terminal to support a contactless chip or even a contact chip,” Arminio said. “It’s very complicated and most merchants are not willing to invest the time needed to make the change, especially if they are not seeing a whole lot of transactions coming out of that environment.”

Because converting to contactless or NFC technology is expensive and demands a time commitment, merchants might be inclined to find an easier and less expensive option such as supporting QR codes, which don’t call for as many configuration changes, Arminio added.

In a cited report from the National Retail Federation, 56% of merchants have figured out how to get this done, despite the complexities, and offer contactless options today.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post What It Takes a Merchant to Accept Contactless appeared first on PaymentsJournal.

Your money won’t be good anymore at Levi’s Stadium in Santa Clara, CA, home to the San Francisco 49ers. That’s because the sports venue will become cashless based on a partnership with Visa and the 49ers. This isn’t the only stadium to go cashless as others include the Seattle Seahawks’ CenturyLink Field, and the Atlanta Falcons’ Mercedes-Benz Stadium.

Fans with cash can convert their bills to plastic at kiosks on location. Card-only transactions will speed up grabbing a beer and a snack, lessening the possibility of missing a big play. Concessionaires will also save time by not having to deal with handling bills and coins. Most stadiums do not yet allow fans at games due to COVID-19, but cashless conversion will be worth the wait.

The following excerpt from a SportBusiness article reports more on the topic:

The National Football League’s San Francisco 49ers have announced that Levi’s Stadium will become the latest sports and entertainment venue in the United States to go fully cashless. The move coincides with a multiyear partnership extension with the 49ers’ long-time official payments partner Visa.

As such, Levi’s Stadium will only accept card or mobile payments for concessions, merchandise, and other purchases. The initiative is designed to improve the fan experience through increased speed of service, safety, and security. For fans without any payment options other than cash, the 49ers are installing four on-site cash-to-card kiosks that will enable fans to exchange cash for a Visa-branded prepaid card worth up to $500, with no transaction fee.

A transition to this process began in preparation for Super Bowl 50 in 2016 when the 49ers and Visa completed an overhaul to upgrade the venue’s concessions infrastructure to make it the first fully contactless enabled stadium in the NFL. This included close to 600 contactless terminals around the stadium. The move will be completed ahead of fans being allowed at Levi’s Stadium in the wake of the global Covid-19 pandemic. Currently, spectators are not permitted to events at the venue, but the 49ers remain hopeful that they will before the end of the 2020-21 NFL season.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Visa and 49ers Score With Cashless Stadium Game Plan appeared first on PaymentsJournal.

PSCU, the nation’s premier payments credit union service organization, has updated its weekly transaction analysis from its Owner credit union members on a same-store basis to identify the impact of COVID-19 on consumer spending and shopping trends. An infographic is also attached.

To provide relevant updates on market performance, experts from PSCU’s Advisors Plus and Data & Analytics teams today released year-over-year weekly performance data trends. In this week’s installment, PSCU compares the 39^th week of the year (the week ending September 27, 2020 compared to the week ending September 29, 2019).

• Overall card payment volume growth rates were steady in Week 39, with strength continuing in debit and credit remaining positive.
  • Debit card spend was up 17.3%, slightly lower than the four-week average of +18.5%. Transactions were up 3.7% and have been positive for 13 consecutive weeks.
  • Credit card spend achieved its fourth consecutive week of positive growth at +3.4%, which is lower than the four-week average of +4.3%. Transactions were down 2.6%, hovering close to the four-week average of -1.9%.
• Consumers continue strong usage of contactless, mobile wallets and card-not-present (CNP) alternatives, while using less cash.
  • Contactless “tap-and-go” transactions via dual interface cards continue to gain adoption. Debit contactless transactions as a percent of card-present activity on contactless debit cards have grown from around 8.4% in mid-January to 14.4% in Week 39, including a two-percentage-point increase in the past six weeks. Contactless credit transactions have also grown from 6.5% in mid-January to last week finishing at 10.2% of card-present activity on contactless credit cards.
  • Mobile wallet (i.e. “Pays”) transactions and purchases for both credit and debit cards had positive results. Debit mobile wallet purchases finished Week 39 up 70.2% year over year, slightly lower than the four-week average of +71.8%. Credit mobile wallet purchases were up 50.2% year over year, higher than the four-week average of +49.9%. These results represent six supported mobile wallets: Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay and Samsung Pay.
  • We continue to see more volume conducted via Card Not Present (CNP) transactions. For credit, 51.6% of purchase volume and 40.9% of transactions were CNP. For debit, 41.2% of purchase volume and 28% of transactions were CNP. Purchase mix has held steady and is up 6.1 percentage points year over year for credit and 6.4 for debit. Transaction mix is also steady and up 8.6 percentage points for credit and 6.9 for debit year over year.
  • Cash withdrawal transactions at the ATM remain down year over year. For the most recent week, the number of cash withdrawals was down 20.7%, just below the average for the past four weeks of -18.8%.
• From a merchant category perspective, purchase growth rates in Week 39 were steady and trends remain positive overall.
  • Grocery remained steady this week, with purchases up 9.7% for debit and up 17% for credit. 
  • Goods continued strong performance, with purchases up 36.6% for debit and up 23.4% for credit.
  • Drug Stores showed the largest credit category decrease, down 3.3 percentage points from last week, to +3.3%. Drug Stores remained steady on debit, finishing at +5.3%, down just 0.1 percentage points from last week.
• Our regional analysis of spend utilizes the segmentation used by the U.S. Bureau of Economic Analysis (BEA) for economic analysis. Please see the attached infographic for a map of changes to credit and debit purchases by region.
  • Overall U.S. spend was up 3.4% for credit purchases. The Plains (+6.0%) and the Southeast (+5.9%) finished as the strongest regions for Week 39. Hawaii (-4.9%) and the New England region (-1.8%) had the lowest credit purchase performance.
  • Overall U.S. spend was up 17.3% for debit purchases. The Great Lakes (+21.1%), the Mideast (+18.6%), the Plains (+17.8%) and the Southeast (+17.5%) finished above the U.S. average for Week 39. The Far West region (+10.4%) and Hawaii (+7.7%) showed the lowest debit purchase performance.
  • PSCU’s Weekly U.S. State/Territory Analysis is available at www.PSCU.com/COVID19, ranking U.S. states and territories by year-over-year performance for debit purchases, credit purchases and ATM transactions.
• This week’s deeper dive explores the Restaurant sector, which currently makes up 6.8% of overall credit purchases and 11.1% of all debit purchases. While four sub-categories comprise this sector, two Purchase Merchant Categories – Eating Places/Restaurants (“Eating Places”) and Fast Food Restaurants (“Fast Food”) – represent 95% of purchases. For Week 39, the percentage of spend within these sub-categories are 69% at Eating Places and 27% at Fast Food for credit and 57% at Eating Places and 40% at Fast Food for debit. The other two categories in this sector are Drinking Places and Caterers.
  • For debit, purchases in the four sub-categories have largely worked their way back to near or above 2019 levels. Drinking Places finished Week 39 up 11.6% year over year, up from the four-week average of +8.1%. Fast Food purchases were up 10.2% in Week 39, in line with the four-week average of +10.8%. Eating Places were up 5.3% in Week 39, up slightly from the four-week average of +4.2%. Caterers were down 3.1% in Week 39, noticeably down from the four-week average of +5.3%.
  • For credit, purchases in Fast Food have nearly returned to 2019 levels, finishing week 39 down 0.3%, down slightly from the four-week average of +1.4%. The remaining sub-categories are still well below 2019 levels. Caterers finished Week 39 at -32.0%, down from the four-week average of -25.3%. Drinking Places were down 19.6% in Week 39, up from the four-week average of -23.3%. Eating Places were down 16.7% in Week 39, in line with the four-week average of -16.9%.
  • In the two dominant sub-categories of the Restaurant sector, Eating Places and Fast Food, the average purchase amounts have been elevated since April for both credit and debit, indicating that purchase frequency has been slower to return. For Week 39, the credit average purchase amount for Eating Places is $38.16, up 5.5% year over year and for Fast Food is $12.65, up 14.1%. For debit, the average purchase amount for Eating Places is $30.86, up 12.7%, and for Fast Food is $11.29, up 15.5%.
  • Restaurant purchases are clearly one of the more impacted sectors in the shift to Card Not Present activity.
    • For debit purchases, the percentage change in Card Not Present purchases for Week 39 is up 110%, down from the four-week average of +112%, and has been over 100% for the past 26 weeks.
    • For credit purchases, the percentage change in Card Not Present purchases for Week 39 is up 89%, down slightly from the four-week average of +91.4% and has been above this level for the past 25 weeks.

“Week 39 saw another strong week of performance in both debit and credit purchase volume, fueled by strong growth in retail,” said Glynn Frechette, SVP, Advisors Plus at PSCU. “Contactless transactions continued to surge, up two percentage points over the past six weeks on debit, representing stronger week-to-week growth than we have historically seen. In this week’s deeper dive into the Restaurant sector, we saw that card-not-present activity continues to grow exponentially year over year. Both of these trends are good indicators of the continued behavioral changes and adaptation of both consumers and businesses in a post-pandemic environment.”

PSCU will continue to develop and share analysis of transaction trends on a regular basis.

The post PSCU Tracking Transaction Trends Amid COVID-19: Week Ending September 27, 2020 appeared first on PaymentsJournal.

Retail stores are not dead, but they are certainly changing. Walmart has announced a major investment in upgraded store layouts that will begin with 200 of its stores by January, 2021 and another 800 by January, 2022. Some changes will involve more vibrant store signage and displays. Others will address changing consumer shopping behaviors such as self-service checkout and online order fulfillment.

The pandemic has accelerated e-commerce sales and stores now need to create dedicated space for customers who arrive to pick up their orders via curbside pick-up. Additionally, social distancing favors contactless checkout, so expect to see more mobile app scan and pay, plus QR code-based payments when the re-designed Walmart stores come to a neighborhood near you.

The following excerpt from a Chain Store Age article reports more on the topic:

Walmart has unveiled an airport-inspired, digitally-enabled store design that it plans to start rolling out this year. The redesign has a sleek, modern look and incorporates use of the Walmart app. It also features self-checkout kiosks as well as contactless payment solutions, including Walmart Pay. Select locations will also have Scan & Go, which lets customers manage their checkout directly using their mobile phones.

Walmart said it tested the new concept in select stores and is “excited” by the initial feedback from customers and employees. The design will be rolled out to nearly 200 locations by the end of this fiscal year (Walmart’s fiscal year runs through the end of January), reaching close to 1,000 stores by next fiscal year.  As the new look is rolled out, the chain will “continue to get customer and associate feedback and evolve the design accordingly,” said Janey Whiteside, executive VP and chief customer officer, Walmart.

The new design features updated signage on the exterior and interior of stores that resembles the Walmart app icon. A large and very prominent blue arch — visible from across the huge parking lot — marks the order pickup area where shoppers can retrieve their online orders. 

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post Walmart Rolls Out New Store Design Concept appeared first on PaymentsJournal.

Peter Reville, an analyst at Mercator Advisory Group, recently published an article that raised some fascinating points on the uptake of contactless in Australia, and what that might mean for the United States.

Reville’s final question was, “what is it about the move to using a smartphone that is holding people back from what seems like the next logical step from a contactless card to a phone or other smart device?”

Ironically, it is the success of contactless itself that has been the main reason preventing the move from a contactless card to a smartphone or wearable.

It’s worth understanding just how ubiquitous contactless has become in Australia.

Australia’s central bank, the Reserve Bank of Australia (RBA), recently published its triennial Consumer Payments Survey. This showed that in 2019, around:

• half of all in-person payments were made by ‘tapping’ a debit or credit card on a card terminal; and,
• three-quarters of point-of-sale “plastic” card transactions were contactless.

This ubiquity – and the convenience and security that  comes with it – means that there is less reason to move to a smartphone: consumers question the real benefit of pulling a phone (rather than a card) out of their pocket.

Reville is therefore right to have observed that, “the growth of mobile devices to pay for things hasn’t caught on as one might have expected given the growth of contactless in general”: the RBA’s survey noted that 5 per cent of in-person payments were made by ‘tapping’ a smartphone or wearable rather than a physical (plastic) card.

So what will lead consumers to take the next step from a contactless card to a phone or other smart device?

The first driver will be contactless transit. This was the driver for contactless itself in the UK. It’s likely to be the driver for mobile in Australia simply because it’s the first payment people make in the day, it sets the customer experience for the day, and as they’re probably on their phone waiting for the bus/train/tram/ferry/taxi why not also use it to pay? Most of Australia’s states have either already started rolling out contactless transit or have plans to do so – under a framework created by AusPayNet – so this driver will likely have a discernible impact over the short-term.

Another driver will be rewards/loyalty. As major retailers combine paying and loyalty within the same smartphone experience, consumers will see value in pulling a phone (rather than two cards) out of their pockets. Again, this customer experience is now becoming more and more common at major retailers, and is also likely have a discernible impact over the short-term.

COVID has been an unexpected, additional driver. As some of Australia’s major banks have reported, mobile/wearable use has significantly increased as people recognise the benefit of paying/authenticating on their own device – with biometric (their face or thumbprint) – rather than the merchant’s (with PIN). This is likely to be “sticky,” given the good customer experience that goes with it. 

Interestingly, this increase in mobile/wearable use has occurred notwithstanding AusPayNet’s work with the payments industry and retailers to increase the contactless PIN limit from $100 to $200 during the pandemic. This change has helped reduce the spread of coronavirus by ensuring daily that hundreds of thousands of Australians do not have to physically interact with a payment terminal. But nonetheless, it would appear that many consumers are demonstrating both a preference and a confidence to go beyond this by using a smartphone or wearable, and that they see this as safer, as well as secure and convenient.

So that “next logical step from a contactless card to a phone or other smart device” may not be far away Down Under.

The post Contactless Down Under – a View from … Down Under appeared first on PaymentsJournal.

With the world firmly in the grip of COVID-19, merchants everywhere are changing to adapt to the new reality. In order to facilitate social distancing and limit the spread of the virus, merchants are re-designing store layouts, expanding delivery options, and, when possible, pivoting to digital channels.

In addition to these changes, a major area of focus has been payment methods. Contactless payments—including QR code-based payment methods—are on the rise, with consumers increasingly avoiding cash and other payment options that require touching point-of-sale (POS) terminals.

To learn more about QR code adoption in the United States and what benefits this touch-free payment method offers, PaymentsJournal sat down with Kia Lee, VP of Strategy & Development at InComm, and Raymond Pucci, Director, Merchant Services at Mercator Advisory Group.

Unpacking the growth of contactless

One of the more documented trends in consumer expectations has been the widespread desire for convenience, immediacy, and choice in nearly all aspects of a consumer’s commercial life. From browsing online to checking out in store, people want easy and intuitive experiences that cater to their needs.

When it comes to payments, consumers have increasingly turned towards payment methods that allow for quick and secure transactions depending on the context. As merchants and payment companies responded to these trends, digital wallets and other alternative payment solutions, including contactless methods, became more common. Then COVID-19 hit and these trends were greatly accelerated. “We find in these days of social distancing, convenient and contactless payments are certainly at the forefront,” of both consumers’ and merchants’ minds, explained Pucci.

Since the pandemic began, new payment technology has seen nearly a 10% boost in new users, according to Mercator Advisory Group’s North American PaymentsInsights 2020 Payments Survey. New payment technology includes products ranging from QR codes to digital wallets.

At the same time, those who were already using these products have reported doing so more often. Mercator found that nearly one-third of consumers “who used these technologies before the pandemic are using them more since the outbreak.”

All this underscores the fact that consumer expectations around payment methods, which were already changing before COVID, are shifting even faster—and merchants need to keep up.

Already used around the world, QR codes are on the rise in the U.S.

Paying for goods and services using a QR code may seem uncommon to an American, but this payment method is already fairly common overseas, especially in Asia and developing countries around the world.

In China and Japan, for example, QR codes processed $1.65 trillion in purchases in 2016. The high transaction volumes makes sense when one considers that, in China, an estimated two out of three consumers use the technology. QR code use in India is also widespread.

Now QR codes are becoming more popular in the U.S. Mercator’s data show that while only 13% of consumers used QR codes on their smartphones prior to the pandemic, an additional 11% have used the technology since. Moreover, 34% of those who were already using this payment technology reported using it more since COVID began.

“COVID-19 really jump started more adoption,” said Lee, noting that for merchants looking to accommodate consumers’ desire for secure, touch-free payment methods, “QR code payments are readily available.”

Pucci agreed, adding that “it’s imperative for retailers to get in on the game here, so to speak, because more and more consumers are going to be looking to make contactless payments.”

QR codes allow merchants to accept more payment methods and promote customer engagement

Merchants have a lot to gain by supporting QR code payments. “The most immediate benefit is the ability to accept new payment methods,” said Lee. Many companies, including PayPal and AliPay, provide customers with apps that allow them to make purchases using QR codes. By offering QR code payment capabilities as well, merchants can transact with more customers.

But the benefits of QR codes extend well beyond just being able to accept more payment methods. “This technology really enables data driven personalization,” explained Lee. “It can really enhance engagement with the customer.”

By using bucket history and user information gleaned from QR code use, merchants can automatically tailor offers to customers. “We can really engage consumers through personalized offers and messaging that can be embedded in the QR code,” said Lee.

This could be done as part of a merchant’s rewards program to drive engagement and revenue. “The higher the engagement, the more you’re encouraging consumers to come in and spend,” explained Pucci. He noted that merchants in the C-store and QSR verticals are already reaping the benefits of improving their rewards programs by better utilizing emerging technologies.

Finally, both Pucci and Lee highlighted the fact that QR codes can be scanned through Plexiglas, which is important as more merchants install barriers to protect their employees and customers alike.

Few barriers exist to implementing QR code payments

One of the biggest draws of barcode payments is that merchants can offer it without much difficulty. This payment technology does not require merchants to invest in expensive hardware or software upgrades.

“Equipment-wise, it’s using the same scanners merchants use today to scan a traditional 1D barcode or two-dimensional scanner,” said Lee. “So as long as they have one those devices, which most retailers would, they should not have much of a barrier.”

Another concern revolves around consumer education. Since many U.S. consumers are not familiar with QR codes, merchants will have to teach people how to use this payment method and why doing so is worth it.

However, Pucci and Lee explained that the consumer education piece is not as much of a barrier as it may seem. As has been discussed, many consumers have already encountered QR codes due to COVID-19. Throughout the country, for example, it’s now common to use QR codes to access the menu at restaurants. This means that “some of the barriers of consumer education are starting to fade away,” said Lee.

Another concern relates to personal data. Since transactions via QR codes can be so information rich, there is a fear among some merchants that handling this data can be risky and expensive. But this, too, is not an insurmountable barrier.

“One of the ways that we’ve gotten around that is by using tokenized account numbers,” said Lee. “So there’s no PII data that’s being transmitted from the point of sale through to the providers.”

Merchants should look for the right provider

If a merchant wants to offer QR code payments to its customers, it should be sure to partner with the right payments provider.

“You want to partner with someone who’s going to give you multiple payment options through a single integration,” explained Lee, noting that this is the approach offered by InComm, made possible by a series of high-profile partnerships.

In 2018, InComm became the payment processing partner of AliPay, thereby allowing its merchants to transact with AliPay users. InComm then partnered with PayPal to bring touch-free payments to a variety of U.S. retailers, including CVS. As a result, once a merchant connects to InComm’s payment switch, they are then “connected to a multitude of payment providers on the back end, including the leading wallets in the world,” said Lee. 

Merchants should also look to partner with a company that makes the payment process as easy as possible for consumers. For InComm’s part, its solution is designed to be as easy to use as possible. “We say it’s as simple as one, two, three, four,” explained Lee:

1. Ring up your purchase
2. Have your mobile device ready for payment
3. Wait seconds for the transaction to happen
4. Receive a confirmation on your mobile device

Using QR code payments is that easy regardless of whether the payment type is PayPal, AliPay, or any of “the other payment types that are coming right behind it,” concluded Lee.

The post QR Codes Could Be the Future of Payments in the U.S. appeared first on PaymentsJournal.

Not too long ago, there was a significant amount of press given to the idea of paying via facial recognition. This technology was being promoted in China by Ant Financial’s Alipay and by its rival WeChat.

The idea is simple; when a consumer is at the POS, a scan of their face serves as their payment method and authorization. In other word, a consumer walks up to the POS, allows the POS to take their picture, and viola, the transaction is complete—at least in theory.

Truth be told, it isn’t quite that easy. An app needs to be opened and the user has to enter some type of PIN to complete the transaction.

Even though Ant and WeChat have spent a considerable amount of money promoting the technology and subsidizing the new-fangled POS systems, early reports indicate that consumers are slow to adopt this technology. As an article in the Wall Street Journal, In China, Paying With Your Face Is Hard Sell, published over the weekend, pointed out:

The payment technology has largely failed to gain popularity, analysts say, as some consumers have found the sign-up process cumbersome and had concerns about how their images and data would be used. It shows that even a major fintech innovator with a large customer base can face privacy concerns and struggle to change user habits.

Now they may be able to clean up some of the UX issues around signing up and the POS experience, but the concerns about the use of the facial recognition data are much harder to overcome. Even in a country like China, where facial recognition is used widely, consumers have concerns.

A survey of more than 6,000 people in China last October found that nearly 80% were concerned about personal information leakage due to the use of facial-recognition technology. Another 57% were concerned about being tracked, according to data from Nandu Personal Information Protection Research Center. About 41% of those surveyed were willing to scan their faces for payments while another 39% said they weren’t.

What the future holds for this technology remains to be seen. Companies have made new technology work with refinements over time, changing consumer trends through sheer brute force. At this point, however, they face an uphill battle if they want this to take off in China.

One of their battles will be convincing consumers that the new technology provides a better value proposition than the old technology. The Chinese people have become very comfortable with QR codes as a method of payment. What does facial technology provide that makes the payment experience all that much better?

At the end of the day, it all boils down to one underlying principle. Just because the technology exists, users don’t necessarily see value in using it. Without a compelling value proposition, consumers will stick with what they know. Sometime new technology or ideas is just a solution in search of a problem. I fear sometimes companies lose sight of this and chase the new “shiny object.”

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post Can Facial Pay Work in China? appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report – Credit Card Products for a New User Environment

Consumers Adjusted Payments Quickly When the Pandemic Struck: 

• As the health crisis unfolded quickly, cardholders reacted promptly in requesting assistance and accelerated their use of contactless payment technology.
• One in three users of smartphones and smartwatches reported their use of the contactless payments tech has increased. 
• Similar increases have been noted in contactless payment cards since the pandemic began.
• Credit lines have also been adjusted quickly: 18% of credit card users noted a reduction in their credit line.
• Of the consumers who noted an adjustment in their credit line, over half had missed a credit card payment (11% overall).
• 19% of credit card users requested more time to pay their bills due to the pandemic.
• Three-fourths of those applicants received deferrals on at least one account.

About Report

The pandemic changed life as we know it for credit card lenders and cardholders. Being a lender is not so simple anymore. Profitability is under siege, driven by loss provisioning, declining outstandings, changing spending patterns, debit competition, erosion in the power of rewards, and a deep recessionary environment. Primarily driven by the externality of the COVID pandemic, many behavioral changes among cardholders are likely to be long term, if not permanent.

Mercator Advisory Group research, Credit Card Products for a New User Environment, indicates a shift in credit and debit patterns. Contactless payments mean more to merchants, consumers, and issuers than ever. Durable spending is down; consumptive spending is up. And, credit card deferrals do not seem to carry the stigma they once did. Rewards consume a large portion of interchange, and in a shifting market, all costs must receive consideration.

“You cannot simply throw rewards at consumers and expect profitable market share,” comments Brian Riley, Director, Credit Advisory, at Mercator Advisory Group, and the author of the research note “Credit Card Products for a New User Environment.” Riley adds that “Credit cards are certainly not going away, but expect lower returns, higher risks, and shifting purchase patterns at least through 2025. And, do not forget the investor. It might be balance sheet lending or asset-backed securitizations enabling the credit card lender, but without the investment, card lending will cease. Lending is a risk-based business; it requires a return for tolerating the risk.

The post Consumers Adjusted Payments Quickly When the Pandemic Struck: appeared first on PaymentsJournal.

Nacha’s Payments Innovation Alliance has released two new papers that discuss innovations associated with conversational commerce and cybersecurity. Both documents are under 6 pages and provide very short snapshots of the two topics, which could prove useful to those just becoming familiar with the subject matter.

Mercator Advisory Group has written several 30 plus page reports on both topics, which can be found here, here, here, and here for those more interested in taking a deep dive. For those looking for a quicker summary, this press release is a good place to start, part of which is excerpted below:

“The new resources include “Voice Payments: An Introduction and Overview,” developed by the Alliance’s Conversational Payments Project Team as the first in a series of executive briefings. The briefings are designed to deliver targeted, clear and concise information focused on the still-emerging channel known as conversational payments, as well as its enabling technology, such as voice assistants and smart speakers.

The second resource, “COVID-19 Best Fraud Prevention and Cybersecurity Practices,” was developed by the Cybersecurity Response Project Team as a top 10 list of best practices to help organizations protect themselves against evolving pandemic-related cyberthreats.

“Project Teams are the heart of the Alliance. We are pleased to bring together diverse industry experts to create tangible tools to help financial institutions and business end users alike,” said Jane Larimer, Nacha President and CEO. “With its broad understanding of payments, the Alliance is the ideal industry environment for members to be both thoughtful and inclusive as we look to develop resources that can serve the entire financial services ecosystem.””

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Nacha’s Payments Innovation Alliance Expands Innovation Topics appeared first on PaymentsJournal.

The idea of contactless payments is still pretty foreign to a lot of Americans. There are a number of reasons for this but I’ll point out a few. Although contactless payment technology has been around for a while now, it only really gained widespread acceptance after merchants moved to accept chip-based transactions.

Secondly, the rollout of NFC-enabled cards has been slow, and even when consumers received them, many did not know that they have a card capable of tap and go. There are other reasons, but I don’t want to bore you.

All that said, the U.S. is a bit of an anomaly with regard to contactless card use. Consumers in many other countries are happily tapping away to their hearts’ content. Countries like Canada, the U.K., and Australia come to mind first.

I read an article from Australia this morning that talks about the impressive growth of contactless and digital wallets. The article is from Bankingday.com and covers the increase in the use of cards largely at the expense of cash. Increasingly, these card transactions are being made via contactless. As the article mentions:

The RBA said one of the most notable developments was the big increase in contactless card payments. The share of in-person payments made by tapping a card terminal increased from 10 per cent in the 2013 survey to 50 per cent last year.

Contactless technology has facilitated greater use of cards for low value payments. The share of in-person payments of $10 or less that were made with cards rose 20 percentage points over three years to 51 per cent.

The use of mobile phones and other payment-enabled devices to make contactless payments grew over the three years but such payments still only accounted for 5 per cent of in-person payments.

There a few things to unpack from this. First, the increase in contactless use by 40 percentage points since 2013 is pretty remarkable (if my math is correct, that’s a 31% CAGR). While we have gotten off to a slow start here in the U.S., it does show that consumers are willing to adopt this technology.

Secondly, as consumers in Australia have learned about the convenience of tap and go, they have started using it for lower ticket items that were traditionally dominated by cash. We are starting to see cards taking share away from cash world here in the U.S.; the increased use of contactless will only continue this trend.

Lastly, it is interesting to note that the growth of mobile devices to pay for things hasn’t caught on as one might have expected given the growth of contactless in general. I find this very interesting. What is it about the move to using a smartphone that is holding people back from what seems like the next logical step from a contactless card to a phone or other smart device?

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post Contactless Down Under – Is Australia a Model for Future Contact Use in the U.S.? appeared first on PaymentsJournal.

There is a movement afoot among the big players in the QSR industry. The COVID-19 pandemic, combined with pre-pandemic trends, is causing the industry to rethink the brick and mortar restaurant and how they divvy up the space in those restaurants.

A recent article in Forbes, Burger King Unveils A New Restaurant Design To Meet Consumer Habits Changed By COVID-19, discusses how Burger King and others are redesigning their outlets to increase drive-thru lanes and accommodate in-store pick-up and curbside delivery, all at the expense of in-restaurant dining.

The company’s “Restaurant of Tomorrow” plans were created by the Restaurant Brands International in-house design group with input from tech, operations and food innovation teams. The restaurants are 60% smaller than traditional BKs and are aimed at improving the guest experience by offering multiple ordering and delivery modes.

What that means specifically is a drive-in area (under solar-powered canopies) that allow guests to place their orders through the BK app and have their food delivered to the car; dedicated parking spots for curbside delivery; pickup lockers for mobile and delivery orders; multi-lane drive-thrus that provide a view into the kitchen; and an external walk-up window.

As the article mentions, Burger King is not alone in rethinking the restaurant layout. Taco Bell, Shake Shack, and others are also shifting priorities to the take-out diners. Even before the pandemic, drive-through was experiencing incredible growth.

Notably, the drive-thru was on a tear prior to the pandemic, with nearly 40% of consumers using the channel more in 2019 versus 2018. Credit consumers’ time-pressed schedules for this growth.

What does this mean for the payments industry?

Simply stated, cash use will decrease and card use will increase. QSRs have been one of the last remaining verticals that has more than its fair share of sales coming from cash (C-stores is the other cash dominant vertical). As consumers use drive-thru and order ahead (in its many forms), they will rely more on cards than cash to pay for their orders.

As the use of payment cards increases at the drive-thru, the first thing that comes to mind is the POS customer experience. The pandemic has made many people to demand a contactless POS experience. That will require a way of getting the terminal and NFC reader to the car in a way that works for all the parties in the transaction.

For instance, right now when I go to the drive through at my local Dunkin’, and pay with Apple Pay, they have to hold the entire terminal out the drive-up window so I can tap & go.

My biggest concern with this shift by QSRs is the soggy fries that I get when they’ve been in a bag too long.

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post Fast Food – Fast to Adapt appeared first on PaymentsJournal.

Scientists have discovered a glaring weakness in the Visa implementation of the EMV Contactless specification. The weakness allows fraudsters to bypass the need to enter a correct PIN on a lost or stolen card. The same weakness was not discovered in the Mastercard, American Express, or JCB implementations, which were also tested by the researchers. The scientists suggested a “simple fix” which requires that POS software be updated, which in real life is rarely simple.

An article from Tech Explorist covers the topic further:

“This vulnerability enables fraudsters to obtain funds from cards that have been lost or stolen, although the amounts are supposed to be validated by entering a PIN code.

This vulnerability empowers fraudsters to acquire assets from cards that have been lost or stolen, even though the amounts should be approved by entering a PIN code. Toro puts it basically: “To all expectations and purposes, the PIN code is ineffectual here.”

Other companies, such as Mastercard, American Express, and JCB, don’t use the same Visa protocol, so these cards are not affected by the security loophole. However, the flaw may also apply to the cards issued by Discover and UnionPay, which use a protocol similar to Visa’s.

Analysts had the option to exhibit that it is conceivable to exploit the vulnerability in practice, even though it is a genuinely unpredictable cycle. They originally built up an Android application and installed it on two NFC-enabled cell phones. This permitted the two devices to peruse information from the credit card chip and trade data with payment terminals. Unexpectedly, the analysts didn’t need to sidestep any special security features in the Android working framework to install the app.

The primary cell phone is utilized to scan the vital information from the charge card and move it to the second phone to get unapproved funds from a third-party credit card. The subsequent phone is then used to debit the amount at the checkout, the same number of cardholders do these days. As the application declares that the client is the credit card’s authorized user, the vendor doesn’t understand that the transaction is fraudulent. The pivotal factor is that the app outmaneuvers the card’s security system. Even though the sum is over the limit and requires PIN confirmation, no code is requested.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Visa Contactless Cards Spoofed to Ignore Pin Request. Fix “Only” Needs a POS Update! appeared first on PaymentsJournal.

Fiserv, Inc. (NASDAQ:FISV), a leading global provider of payments and financial services technology solutions, alongside Amazon and ExxonMobil, announced today that “Alexa, pay for gas” is now live at more than 11,500 Exxon and Mobil stations in the United States. Beginning today, consumers with Alexa enabled vehicles, devices like Echo Auto, or the Alexa app on smartphones can simply say, pay and be on their way when they fuel up at an Exxon or Mobil station.

When customers pull up to the pump and say, “Alexa, pay for gas,” Alexa will confirm the station location, pump number, and then activate the pump. The customer can then select the fuel grade on the pump and begin fueling, with payment completed automatically after fueling.

The commerce experience – including geo-location at Exxon and Mobil stations, pump activation, payment processing, and payment tokenization – is powered by digital commerce technology from Fiserv. “Alexa, pay for gas” payments are made digitally via Amazon Pay, allowing consumers to securely use the payment method associated with their Amazon account; no additional sign-up or separate account is required.

“Changing consumer expectations and the ongoing COVID-19 pandemic are accelerating demand for contactless payment interactions that span digital and physical worlds,” said Devin McGranahan, senior group president, Global Business Solutions at Fiserv. “The age of omnicommerce is here, and voice-activated smart devices are playing a pivotal role in enabling people to make purchases with speed, ease and convenience.”

“At Amazon, we’re always looking for ways to make our customers’ lives easier whether at home or on-the-go,” said Patrick Gauthier, vice president of Amazon Pay. “While travel looks different today than it ever has before, we’re excited to be working with ExxonMobil and Fiserv on this unique and delightful experience that enables customers to securely pay for gas using just their voice with Amazon Alexa and Amazon Pay.”

Originally announced at CES 2020 as a way to transform the way people pay at the pump, the practicality of voice-enabled commerce experiences like “Alexa, pay for gas” has grown throughout the year as consumers increasingly adopt contactless payments.

“We’re thrilled to formally unveil this seamless contactless payment option at our stations,” said Eric Carmichael, Americas fuels marketing manager at ExxonMobil. “ExxonMobil has always offered cutting-edge payment solutions for our consumers, ultimately providing a better fueling experience. For those on the go, we know they’ll enjoy paying for gas at the pump with just the command of their voice.”

Learn more about the “Alexa, pay for gas” experience here.

In a world moving faster than ever before, Fiserv helps clients deliver solutions in step with the way people live and work today – financial services at the speed of life. Learn more at fiserv.com.

The post “Alexa, Pay for Gas” Goes Live Nationwide appeared first on PaymentsJournal.

The article also conflates the EMVCo standard with merchant bar code and QR Code implementations and even appears to bundle in merchant operational issues such as order ahead for pickup. In short, the article appears to generate fear regarding contactless without offering specifics that might help mitigate the problem:

“In March, Walmart announced a no-contact service for payment, pick-up, and delivery in an attempt to protect its customers and employees. Through QR code scanning via the company’s app, in-store shoppers can make contactless purchases. In addition, Walmart customers can also open their trunks and have an employee load their groceries without the need for a signature. Another great example is Sam’s Club’s use of contactless technology to allow customers to pay from their phones, skipping the checkout line completely. Much to the customer and company’s benefit, Scan & Go usage has increased for Sam’s Club fourfold since the start of the pandemic.

With the impending surge of everyday use of contactless payments, businesses have discovered its many benefits as well as its security flags. Inefficiencies in contactless food delivery, ride share, and retail contribute to more than $10 billion in annual losses for businesses, for example.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

The post Has Contactless Exposed Us to More Fraud? appeared first on PaymentsJournal.

The recent rise of contactless payments in the U.S. is one of the most buzzed about topics in the payments industry. If the headlines are any guide, the rise of contactless has been rapid and substantial, signaling the ascendance of a new payment method at the expense of existing ones. The story goes that in order to avoid touching germ-infested point-of-sale (POS) terminals, consumers have flocked in droves to contactless payment methods.

However, a recent blog post from Sarah Grotta, Director of Debit and Alternative Products Advisory Service at Mercator Advisory Group, challenges this narrative. She points out that in the majority of these articles, “there is a reluctance to share the actual number of contactless transactions.”

Many articles rely on consumer surveys, which help reveal general trends without providing insight into the number of transactions. Other articles report the percentage growth of transactions between 2019 and 2020, which is potentially misleading given that contactless transactions made up around two percent of all transactions last year; a sharp rise in the percentage growth does not necessarily reflect a significant rise in overall transactions. And finally, articles that do provide transaction data often cite global numbers, including data from countries where contactless is already a mature product, meaning that the situation in the U.S. remains unclear.

Better data does exist

Grotta points out that the one notable exception to the lack of solid data is PSCU, a Florida-based credit union service organization. PSCU has been tracking and publishing data on contactless activity each week. PSCU has been tracking and publishing data on contactless activity each week. Grotta notes that although “PSCU’s data represents member transactions from their owner credit unions, the data do represent a mix of transactions from across the U.S. and include cardholders from rural, suburban, and urban locations.”

Given that the data come from a mix of transaction types from across the country, PSCU’s numbers offer a deeper insight into the state of contactless usage in the U.S. And what the numbers reveal is that while contactless adoption may not be skyrocketing, as the headlines purport, there does appear to be modest growth.

For example, when the lockdowns first began around March 15, contactless debit transactions comprised 11% of all in-person debit transactions. By mid-July, it ticked up to 13% before dropping slightly to 12% in the beginning of August. As Grotta notes, “While these growth numbers don’t necessarily provide a sizzling headline, this is good growth as it represents a change in consumer behavior, which often can take years to accomplish.”

Grotta goes on to explore what the data reveal about mobile contactless payment usage, the frequency of contactless usage in small dollar transactions, and overall transaction volume trends.

Those interested in the other trends Grotta identified in PSCU’s data can view her blog post here.

The post Contactless Has A Lot of Hype. Is It Warranted? appeared first on PaymentsJournal.

MagicCube, the creator of the world’s only Software Trusted Execution Environment platform, today announced a strategic investment from Visa. Visa, which previously invested in the company, is renewing its support for MagicCube with this latest financing as the company continues to gain momentum in global partnerships and customers to bring its virtual TEE-based platform and solutions to scale. MagicCube was awarded the first recognition of a software-based Trusted Execution Environment issued by EMVCo, the global consortium which facilitates worldwide interoperability and acceptance of secure payment transactions.

“Visa’s continued support of MagicCube shows how much potential there is in the new SDT category, which we are leading,” MagicCube CTO Nancy Zayed said. “Unlike legacy systems, we use virtualization that is upgradeable over the air, remotely manageable and can adapt quickly to new security threats. Powerful features like over the air upgrades, remote provisioning, risk management and mitigation provide a product that can be integrated using simple APIs, deployed rapidly and operated easily. These are key differentiators that set our technology apart from hardware-based security and traditional software obfuscation.”

As part of the investment, MagicCube and Visa will look to further their partnership by exploring new use cases in the payments industry, like Tap to Phone, where the platform can bring next-gen security, operability, and ease of integration.

“Sellers are looking for simple, low-barrier ways to offer digital payments and there may be nothing simpler than transforming an everyday device, such as a mobile phone, into a payment terminal,” said Mary Kay Bowman, global head of buyer and seller solutions, Visa. “By expanding our work with the team at MagicCube to scale softPOS technology, including Tap to Phone with PIN support, we want to enable sellers around the world to not only begin accepting digital and contactless payments, but also give them flexibility to do so in a way that is physically less constrained to a traditional point of sale.”

MagicCube’s products grant modern consumer devices the ability to read contactless cards from Visa and from all other major card brands while securely capturing financial PIN and other verification methods, including biometrics. The solution provides end-to-end functionality, security, and modern acceptance capabilities previously limited to hardware-based terminals. The entirely software-based solution offers a plug-and-play, fully contained module that can fit into the current flows of any modern acquiring bank or merchant acceptance solution.

MagicCube aims to serve progressive financial institutions and offer them a key differentiation that will grant early-adopters a huge advantage over the competition — hardware-grade protection that is easily scalable and ready to deploy in days, not months. With MagicCube’s technology, customers can now forgo buying and subsidizing expensive, single-function card acceptance devices, and instead use apps secured by MagicCube to accept point-of-sale payments.

After being named to Network World’s ‘10 Hot IoT Startups to Watch’ List, heralded as a Cool Vendor in Security and Risk Management by Gartner, and partnering with the PCI Security Standards Council, MagicCube is positioned to lead the SDT category, disrupting the current dominance of hardware-based security.

About MagicCube

MagicCube is leading the Software Defined Trust (SDT) category with its software TEE-based platform. The technology enables large-scale deployment and management of IoT and mobile-secure solutions to consumers. Investors in MagicCube include Bold Capital, Epic Ventures, Sony Innovation Fund, Visa, NTT Data, Azure Capital, CVentures and Luqman Weise Capital.

For more information, visit www.magiccube.co or follow us on Twitter @Magic3inc.

The post Visa Invests in MagicCube’s Contactless SoftPOS & PIN Platform and Its Differentiating Software Defined Trust (SDT) appeared first on PaymentsJournal.

Data for today’s episode is provided by Mercator Advisory Group’s report – U.S. Small Businesses are Reeling as a Result of COVID-19

Which Payment Types Are Winning Contactless Acceptance for Small Businesses?

• In 2018, 37% of small businesses accepted zero contactless payments; in 2020, 26% of small businesses accepted none. 
• 50% of today’s small businesses accept Apple Pay, compared to 42% in 2018.
• 41% of today’s small businesses accept Android or Google Pay, compared to 34% in 2018 & 2019.
• Samsung Pay has seen modest gains in acceptance of 4% among small businesses between 2018 & 2020.
• Chase Pay barely improved on its 22% (2018 & 2019) small business acceptance rate, coming in at 24% in 2020.
• Contactless cards jumped to 16% small business acceptance in 2020, up from 8% in 2018.
• LevelUp, AliPay, WeChatPay, and proprietary payment app solutions saw little progress and are accepted by less than 10% of small businesses.

About Report

Mercator Advisory Group’s new Insight Summary Report, 2020 Small Business Payments Insights, COVID-19 and B2B Payments & Cards – The Result of the Pandemic, reveals that U.S. small businesses have a much less positive view of the future than in previous years. The report is the first of three from Mercator’s annual Small Business Payments Insights Survey Series, a part of Mercator’s Primary Data Service. It is based on findings from Mercator Advisory Group’s online survey of 2,000 U.S. small businesses fielded in March and April 2020.

The report details the ways COVID-19 has changed small businesses and their outlook on the near-term future of their businesses. The report also provides insight into how small businesses bank and pay for goods and services, their banking relationships, how they view technology and their top business concerns.

“Small businesses have been hit hard by the pandemic. In many ways, more than their larger counterparts. Organizations that service small business have an opportunity to help these firms as they try to come out of the COVID crisis,” states the author of the report, Pete Reville, Director of Primary Data Services including Small Business PaymentsInsights Survey Series at Mercator Advisory Group.

The post Which Payment Types Are Winning Contactless Acceptance for Small Businesses? appeared first on PaymentsJournal.

Much time, and I mean a lot of time, has been spent writing about the surge of contactless purchase transactions around the globe in the wake of the COVID-19 global pandemic. Articles on the topic often combine commentary on the rise of contactless with coverage of a similar decline in the use of cash.

This article in PaymentsSource wishes the industry to think about the societal impact of contactless transactions at the expense of cash and calls out the need to protect the use and acceptance of cash for those with few financial options. There is also a reminder of the consequences to small businesses:

When COVID-19 hit, there was a 44% increase in the use of contactless payments, and some businesses even displayed “card only” signs. This caused those relying solely on cash to be cut off from vital goods and services at a time when they needed it the most.

Covid has accelerated what was already on the rise, driven by growing consumer use of mobile and contactless payments. Cashlessness presents an opportunity for government, financial service providers and the wider digital economy – especially the likes of Uber, Airbnb and Deliveroo who all benefit from the reduced friction.

The result of this combined push towards cashlessness is a 60% drop in ATM usage according to YouGov. The fall in usage – again operators make money from transaction fees – means the ATMs are becoming more costly and even driving potential losses. It is no surprise then that ATMs are disappearing from towns and villages across the country.

The impact of this move towards digital payments is being felt nationwide. Millions in the U.K. still rely on cash daily, and many are society’s most vulnerable. Immigrants, the homeless, ex-prisoners, the elderly and low-income workers operate in largely cash-based economies either getting paid or needing to pay with cash. This is amplified by a lack of access to bank accounts that offer digital payments.

This hasn’t just been a problem for consumers. Cashlessness can also have a negative impact on small businesses. There is an added cost for merchants who accept card payments which can limit their business’ profitability and ability to compete with larger retailers.

The issue is now so big that industry bodies have spoken out via the Federation of Small Businesses (FSB), whose national chairman Mike Cherry said: “Cash remains the payment method of choice for millions of small business customers, and for many it is still an essential part of the payments mix.”

Finally, the loss of anonymity that cash affords individuals is also off-putting for a part of the population. Digital payment data is routinely collected and stored, and while this is good for tax evasion and AML, there are concerns over privacy and civil rights that are yet to be addressed.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post Contactless Payments, Cash, and Financial Inclusion appeared first on PaymentsJournal.

ExxonMobil and the navigation app Waze have formed a partnership to offer a contactless payment experience at the pump. For those not familiar, Waze is a GPS navigation app owned by Google that may lead drivers to one of the 11,500 Exxon or Mobile locations. The payment app is automatically prompted when the person pulls up to a pump. A variety of cards and wallets can be used to execute a payment transaction.

The aim is to provide convenience for users and also minimal contact with the screens, PIN pad, and such at the pump. Automated, contactless fueling, particularly in the middle of winter, would be nice too. Here’s what we know about the partnership and the way the payment functions from an article in Convenience Store News:

Waze will now automatically display a prompt for contactless payment through the Exxon Mobil Rewards+ app upon arrival at a participating gas station.

The notification that drivers can safely and securely pay for fuel using Exxon Mobil Rewards+ will appear after the vehicle has come to a complete stop. Drivers can then select their fuel pump number from inside their vehicle or aim their smartphone at the pump’s QR code, after which the app coordinates the transaction.

Drivers will be able to access Exxon Mobil Rewards+ in just a few clicks if it is already installed. If the app isn’t installed, Waze app integration will direct them to download it in the app store.

All major credit cards, debit cards, ExxonMobil credit cards, checking account and mobile wallets, including Apple Pay, Google Pay and Samsung Pay, can be added to Exxon Mobil Rewards+. The app has the same security standards required of banks to keep data private and secure.

Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group

The post The Waze and Means of Contactless Payments at Exxon Mobile Stations appeared first on PaymentsJournal.

Do you use contactless payments? Do you “tap & go” with a card? Do you use a mobile wallet to pay at the local grocery store?

Don’t be ashamed if you don’t. Most people do not. Even though we are in the midst of a pandemic, the allure of a touch-free transaction has not driven the American consumer in droves to the idea of contactless payments.

Yes, contactless use is up, particularly outside of the U.S. As a recent article in the Wall Street Journal points out:

Now the pandemic has accelerated contactless usage, including in the U.S. Visa and Mastercard reported 40% year-over-year global growth for tap-to-pay or contactless transactions in the first three months of this year. PSCU, a U.S. credit-union service organization for payments, reported that over 12% of in-person transactions on contactless-enabled debit cards were by tap in late July and early August, up from about 8% in mid-January.

For those following the contactless space, it should come as no surprise that the growth of contactless in the U.S. is far behind the growth in many other developed and developing countries around the globe. The WSJ addresses this issue:

Contactless payments have long been a laggard in the U.S., even as they have grown to a majority of face-to-face transactions in some countries. Tap-to-pay tends to be a faster alternative to chip-insertion cards. Still, in the U.S. likely less than 5% of in-person transactions were via contactless methods at the outset of this year, according to Bernstein estimates.

There are a number of factors that are holding back the broader adoption of contactless in the U.S.

Probably the biggest problem that the U.S. faces when it comes to contactless is simple awareness. In a recent post, I spoke about small business lack of awareness (confusion) around which contactless options they are able to accept.

Further, many consumers are not aware of the contactless options available to them. I recently moderated a series of focus groups and virtually none of the participants knew if their card was contactless enabled or not. Issuance of contactless cards is also spotty; some of the big issuers were active in getting these cards in circulation while other issuers were not as enthusiastic. Additionally, as the article points out, only about one-third of debit cards are contactless capable. Ownership goes a long way to awareness.

Much of the lack of awareness and outright confusion around contactless in the U.S. can also be attributed the very complicated financial services industry. There are thousands of registered financial institutions issuing debit and credit cards. Many people have a debit card from their primary FI but a credit card from another FI. The acquiring environment is even more complicated with new entrants emerging seemingly every week. In order for contactless to succeed, these players all need to get in line. This will be about as simple as herding a thousand cats.

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post What Do Contactless Payments and Herding Cats Have in Common? appeared first on PaymentsJournal.

Zipwhip, the inventor of Texting for Business™, today announced a new partnership with Authvia, the leading messaging-based payments provider, to launch TXT2PAY® for Zipwhip. The integration offers automated text-based payment requests from within Zipwhip software, allowing users on the web, desktop or mobile apps to send payment requests to customers, easily turning conversations into real-time payments for goods and services. Payments are deposited into a business bank account of choice and several reporting configurations are available for tracking activity. 

The integration comes as the coronavirus pandemic has limited face-to-face contact and communication in a way most of us have never experienced in our lifetimes, and consumers are quickly adapting. According to Zipwhip’s COVID-19 report, consumers are spending more hours on their mobile devices daily, with 56% of people saying they are using their mobile devices more during the pandemic and 62% saying they’re responding to texts more quickly than they did before. TXT2PAY for Zipwhip allows businesses to use any mobile or desktop device to receive credit and debit card payments without the need for a terminal or point-of-sale system, and allows customers to provide those payments without leaving their texting app. This provides a truly contactless communication and payment solution for businesses and consumers while also encouraging social distancing safety measures during COVID-19. 

“Businesses are struggling during the pandemic to engage their customers and keep revenue coming in. But we know that the easier you make it to buy something from you, the more people will do it,” said John Lauer, chief executive officer of Zipwhip. “When you send a TXT2PAY request, your customer only needs their mobile device to complete the payment and they do it through their native texting app. Our thousands of customers nationwide have found that texting increases engagement and expedites interactions, and now it’s directly adding revenue as well.”  

TXT2PAY for Zipwhip is exactly what it sounds like: having conversations about purchases or bills and instantly receiving payments over SMS texting. The platform is available for Zipwhip Premium customers and allows them to: 

• Request and receive payments from customers in seconds, with a confirmation text sent to both parties as soon as the transaction is complete. 
• Track and manage requests and payments in one convenient Authvia dashboard that provides customizable reporting software to make billing and reconciliation simple.
• Sign up for a new processing account or use their existing payment processor for TXT2PAY transactions.

Consumers are able to make payments by simply texting back with the last four digits of their phone number in response to payment requests, drastically reducing the time and effort required to pay. Additionally, TXT2PAY allows consumers to store multiple debit and credit cards within the Authvia wallet, adding flexibility and convenience to future purchases. Authvia’s industry-leading security measures also shield Zipwhip customers and consumers from PCI DSS (Payment Card Industry Data Security Standards) compliance risk, by ensuring sensitive card and account data is completely protected. 

“Enabling safer payment experiences is now just as critical as offering a fast, convenient and friendly experience,” said Chris Brunner, founder and chief executive officer at Authvia. “By partnering with Zipwhip, we’re able to rapidly integrate and deploy a truly contactless payment solution to merchants of all types and sizes. Usage data has confirmed that consumers are not hesitating to use TXT2PAY for making purchases for everything from curb-side delivery of ice cream, to auto parts and veterinary services, simply because it’s convenient.” 

To learn more about TXT2PAY for Zipwhip please watch this video: https://www.youtube.com/watch?v=65Pdus5TTBg&feature=youtu.be

The post Zipwhip and Authvia Partner to Give Businesses a Simple and Secure Way to Accept Payments via Text appeared first on PaymentsJournal.

I don’t think I’m breaking new ground when I say that the success of contactless payments, by phone or by card, will come from a combination of consumers seeing a benefit to using it and merchants seeing a benefit to offering it. The problem with contactless payment technology is that while it sounds so simple, actual execution and usage is another story. Not all contactless forms are accepted equally.

Yesterday RetailDive published some of the findings from a recent National Retail Federations (NRF) research report entitled State of Retail Payments (paywall). One of the interesting findings from the survey was that:

67% of retailer respondents accept some form of no-touch payment. The survey found that 58% accept contactless cards, an increase from 40% last year.

Two-thirds of American merchants say they now accept contactless in one form or another; that’s pretty impressive. However, only 58% accept contactless cards. So there is a disconnect between card acceptance and other contactless methods (smartphones and smartwatches via wallets). This is where my earlier point about not all contactless forms being accepted equally comes into play.

The graph below is from our most recent Mercator Advisory Group’s Small Business PaymentsInsights. It is a perfect example of the issue. We surveyed 2,000 small businesses across the country about the types of contactless payments they accept in their physical location (if they have a physical customer-facing location). The stunning result here is the vast disparity between the brands accepted, not to mention that contactless cards are near the bottom.

One would think that the contactless symbol on the terminal would mean that all contactless payment types are accepted. Are the results in the graph below simply a result of merchant ignorance or confusion, or is it real? 

Regardless of the reason, this presents a problem for the consumer who is trying to pay with contactless.

Consumers have been told that contactless means contactless, not that contactless means you need to have the right wallet brand and/or card. Consumers will only put up with being turned down for using contactless and forced to dip or swipe one or two times before abandoning the idea of paying via contactless entirely.

So the current situations appears to be one of total confusion. Merchants think, rightly or wrongly, that they are limited in what contactless options they can accept and that means that consumers won’t know either. What a perfect way to roll out a “new” technology.

For more on this subject, see my blog post We Accept Contactless…Just Not Yours

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post The Contactless Conundrum appeared first on PaymentsJournal.

When people think of innovation in the business world, startups–specifically technology companies–probably come to mind. This makes sense, as these businesses often use cutting edge technology and innovative business practices to disrupt the status quo.

In contrast, large enterprise businesses are typically viewed as slowly moving incumbents that are lagging behind on the innovation front. Bogged down by legacy infrastructure, mired in organizational red tape, and burdened by a general aversion to change, enterprise companies are slow to keep up. However, that’s not always the case.

In fact, the past several months have demonstrated that some major companies are able to respond dynamically to the broad challenges posed by COVID-19. This has been especially true in the fintech industry, where fintechs have delivered a series of innovations to help merchants and consumers navigate the pandemic.

To learn more about how large companies can innovate and respond to a rapidly changing world, PaymentsJournal sat down with Arnold Goldberg, Chief Product Architect and Senior Technologist at PayPal, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group.

Enterprise companies are well-positioned to innovate

Enterprise companies possess certain characteristics that fuel innovation.

One major advantage that these companies have is scale, specifically as it relates to resources. Unlike some cash-strapped new entrants or smaller businesses with modest means, established players often have vast resources like diversified employee backgrounds and capital at their disposal. This resource advantage helps fund new ventures and paves the way for much needed innovation.

With the larger scale also comes more data. Sloane and Goldberg both underscored the importance of harnessing as much data as possible, be it transaction data, consumer data, or information from merchants. Since large companies have more data to work with, they can better identify key trends and develop products accordingly.

Another advantage of enterprise companies is years of experience. For many companies, years of being in business has resulted in a network of solid professional relationships. As Goldberg put it, when you’re a major company with a long history, “you have partners that love to work with you.” Through these partnerships, enterprise companies can tap into different markets and develop new capabilities in a way that less established companies cannot.

In addition to having many partners, incumbent businesses also have an established customer base. This aids innovation in two ways. First, the company should already be familiar with their customers’ needs, meaning that solutions can be better tailored to widely experienced problems. And since customers already know and, hopefully, trust the company, they will be more likely to trial and adopt new products.

By having ample resources, business partners, and existing clients, enterprise companies can better engage in trial and error while seeing what works. This approach enables major companies to unlock opportunities to innovate.

Unlock speed by changing company structure

One of the main advantages that startups have is speed. For massive companies, speed is often curtailed by complicated chains of command and slow-moving decision making. Therefore, companies that want to adopt the same speed of startups need to reconsider their management structures.

Instead of a rigid, top-down approach to decision making, Goldberg explained that companies should give more autonomy and context to the teams building the products and services that customers interact with.Sloane agreed, noting that companies should “communicate the key strategies that are important to that company and organize itself around those, which often means reorganizing the enterprise.”

By giving lower level teams freedom to operate as needed, companies can better respond to new challenges and solutions and are more responsive to the situation on the ground. Goldberg characterized this approach as doing away with traditional command and control structures within a company. “It’s a very different model but it’s helped us really unleash a lot of the power that you’re seeing in PayPal right now,” noted Goldberg.

Innovating in the face of COVID-19

PayPal’s swift response to COVID-19 illustrates the points emphasized above. Even though PayPal is a massive, multinational organization, it acted quickly when the pandemic began.

Goldberg explained how the company realized that its business plans and long term strategy had to be altered. “Touch-free was something we really wanted to do in the future,” he said. “But all of a sudden, it became a hugely important capability for our customers, especially our small merchants who had to change their interaction model with consumers.”

Therefore, PayPal pivoted. In a matter of weeks, PayPal scrapped its existing roadmap and developed a new plan that was tailored to the pressing needs of its clients. Teams at PayPal, empowered to act independently, focused on developing a QR code solution that allows small merchants to accept contactless payments without investing in expensive hardware. The solution has been deployed successfully in 28 markets around the world, including the United States. In the last week, this initiative was expanded to enterprise merchants with CVS Pharmacy signing up as the first multi-year agreement.

Goldberg attributed this success to the culture at PayPal. He explained how everyone at the company, from the top to the bottom, understood that “there are going to be moments like this and it’s okay.”

Power in partnerships

PayPal’s success can also be attributed to strong partnerships. Goldberg noted that PayPal has completed more than 40 partnerships with leaders across the financial and technology ecosystems. This has allowed PayPal to innovate and help customers in tangible ways. For example, during the pandemic, PayPal worked closely with the U.S. government to help facilitate the Paycheck Protection Program (PPP). PayPal provided access to more than $2B in PPP loans, helping save more than 308,000 U.S. jobs. 

“We have a close relationship with the U.S. government and were able to very quickly become part of that program and also, most importantly, get the money to the customers that really needed it,” explained Goldberg.

Grounding innovation in a central purpose

While having vast resources, a flexible management structure, and a multitude of high profile partnerships helps PayPal innovate, Goldberg noted one last aspect of PayPal which helps: a clear purpose.

“Our purpose is to serve the underserved around the world and to be the payments platform of choice for merchants globally,” said Goldberg. By having such a clear purpose that everyone at the company can rally behind, PayPal can act quickly and develop solutions with passion. “Whether it’s for 26 million merchants or our 346 million consumers, every day we come to work to engage on building amazing solutions for them to continue navigating through the crisis we’re in,” concluded Goldberg.

The post Innovate Like a Startup: How Enterprise Companies Can Stay Nimble in a Changing World appeared first on PaymentsJournal.

Let’s be honest—the adoption of contactless payments and digital wallets has yet to live up to the hype. Contactless proponents have been shouting from the rooftops that the COVID-19 outbreak is the kick in the pants that consumers need to get off the sidelines and start tapping away. Well, there is some good news and some not so good news on this front.

A recent article in International Business Times discusses how the pandemic has shifted consumers toward contactless usage and AI-driven contactless stores (think Amazon GO stores). Here’s an excerpt from the article:

With the fear of contracting the coronavirus pervading most aspects of daily life, consumers are embracing contactless systems for transactions and spurring the growth of artificial intelligence-driven smart stores.

Coresight Research said the pandemic has forced retailers to innovate, leveraging technology to create a more efficient supply chain and generate growth. At the same time, it has become necessary to reduce contact between employees and consumers, forcing retailers to embrace curbside pickup, cashier-less stores, contactless payment and vending machines.

“The coronavirus pandemic has significantly impacted the ways in which consumers engage in retail, and we expect demand for contact-light shopping to become the new norm,” Coresight said.

There has been a lot of conversation around the increase in contactless use because of the pandemic and consumers’ concerns about catching COVID from the POS terminal. For some consumers, infection via POS is a concern; however, for many, it is not.

In a North American PaymentsInsights survey Mercator Advisory Group conducted in June, we saw a near 100% increase in the incidence of use of contactless technologies. That said, only about one-quarter of consumers are using contactless payments, even during the pandemic.

Don’t get me wrong, these numbers aren’t minor; a near 100% increase in the usage of anything is a good thing. That said, they sure aren’t the numbers one might expect from reading recent media coverage regarding contactless payments. Articles like the one quoted above, and others, would lead readers to believe that virtually every consumer in the United States is now using some form of contactless payment technology. This simply isn’t true. There is still a long way to go before the U.S. gets to contactless usage levels of other countries. Why and how we get there is a conversation for another time.

Something to think about: How many of the new contactless technology users will continue to use it once the fear of catching a disease subsides?

Despite what might may say or publish, nobody knows the answer this question.

Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group

The post Not Everyone is Rushing to Contactless appeared first on PaymentsJournal.

As lockdown restrictions ease across the world, we are now entering what can only be described as a ‘new normal’, characterized by social distancing and the wearing of masks in most public places. Nonetheless, COVID-19 has had massive effects on the world’s economy, leading to a drastic drop in spending and changing the way consumers pay for goods and services. We can see the immediate impact on businesses today, particularly in commerce where there has been a rise in contactless transactions and companies undergoing rapid digital transformation or promoting new technologies to ensure a safe and secure check-out.  

It is important to note that not everyone in society will be willing or able to embrace this digitization. However, we expect that the global proportion of people who are digitally-resistant and digitally-reluctant will have decreased. Many have adapted out of necessity, and many have been supported to make the digital transition. For example, in some regions people from low income groups of the economy have been provided with free computers; similarly, younger generations have helped educate older members of their families to help them understand how to access and utilize the power of technology.

However, a significant number are still left behind, not able to afford or use digital solutions. As more services are digitized, there is a danger that, although fewer people will be accessing non-digital services, those who rely on them will find themselves even more alienated and excluded than they have been in the past.

Accelerated adoption of technologies by merchants

In general the coronavirus pandemic is not leading to the development of new technologies; rather we are seeing a much faster and more widespread adoption of those that already existed. In other words, certain technologies are seeing increased relevance due to the effects of the pandemic, and this trend will last beyond the current period of the crisis.

In general, the use cases for existing technologies that we think will witness an acceleration in relevance fall into one of two categories:

In the first category, are those technologies that directly address the needs of the ‘new normal’. These include digital currencies, digital contracts, mobile solutions, 3D printing, Augmented Reality and Virtual Reality (AR/VR), and communication tools to support remote working and collaboration. In terms of payments, we see the Internet of Things (IoT) as an enabler of autonomous zero-contract payments and as an enabler for the pay-as-you-use charging models which we expect will have a higher demand post-crisis. Methods of authentication that do not require any physical contact such as NFC, voice, iris or facial recognition will also become more valuable.

In the second category, are those technologies that enable business resilience through agility. They include Cloud and micro services, Big Data, API first architectures, chatbots and voicebots, and communication infrastructure that meets the connectivity requirements for increased secure online transactions.

What’s next for businesses?

After this crisis, we believe there will be two long-lasting impacts for businesses:

Firstly, investors will value and executives will try to build, companies that can be resilient, even in the face of unpredictable and far reaching global events. To achieve this resilience, organisations will need to be able to adapt in a rapid and agile way to unforeseen circumstances. This will force them to re-evaluate their supply chains and their attitude to cost management.

Secondly, there will be a lasting impact on where and how people work, something we characterize as a shift from teleworking to smart working. Savvy organisations will recognise that working remotely has increased the amount of autonomy people have in their work and the way they are managed: rather than judging people by whether or not they turn up for work, they are being measured on the results they deliver (not by how they achieve them).   We do not expect the world will return to how things were before the crisis. Merchants who have adapted out of necessity during the crisis, will now be seeking to prepare for the lasting impacts that we have described, and planning the next steps for how they can harness technologies in new and valuable ways in the post-COVID-19 world.

The post ‘Essential Digitization’ in Payments Is Accelerating at an Incredible Velocity as a Result of the COVID-19 Pandemic appeared first on PaymentsJournal.

The rise of contactless payments has transformed the way merchants and customers can transact with one another. This new payment system is both convenient for merchants and customers, as users can pay securely using their devices without having to physically interact with merchants. Customers can also enjoy attractive rates, with merchants likely to benefit from increased payment options as well. In addition, merchants no longer need to worry about managing cash or having sufficient change on hand, as contactless payments are cloud-based and digitalized.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless

Contactless Payments Will Likely Raise Rates for Merchants:

• Merchants will pay more for processing to meet customers’ needs for contact-free shopping.
• Routing to the EFT debit networks, which is often less expensive for merchants, is not always available for contactless transactions.
• Merchants will pay higher interchange rates for debit cards and assets in an e-commerce and CNP environment issued by smaller banks (<$10billion in assets) that do not have interchange regulated. 
• If the U.S. follows the example set by Australia, Canada, and the U.K., then the use of cash will decline precipitously as contactless payments increase.
• Issuers will benefit from additional interchange income that merchants will pay in routing the transactions directly to the global networks.
• The Fed estimates that if 10% of grocery store purchases made in cash were converted to cards, $189 million in interchange income would be generated annually from this vertical alone.
• The onset of the coronavirus created the perfect storm that is driving awareness more quickly than all the promotional activities have to date.

About Report

COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.

“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post Contactless Payments Will Likely Raise Rates for Merchants appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless

Transaction Data for Contactless Is Unavailable, but Survey Data Isn’t:

• Transaction data pinpointing the number and dollar volume of contactless debit cards is unavailable, but Mercator consumer surveys definitively show that consumers are using contactless payments more frequently.
• Mercator finds that 35% of consumers who are familiar with contactless report making contactless payments more often.
• 46% of consumers report no change in their use of contactless payments.
• 19% of consumers report using contactless payments less or much less.
• An explanation for those who report using contactless less is that they are likely spending less in total and in person.
• 12% of consumers are now using contactless for the first time as a direct response to the COVID-19 pandemic.
• 44% of consumers have never used contactless cards.

About Report

COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.

“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post Transaction Data for Contactless Is Unavailable, but Survey Data Isn’t: appeared first on PaymentsJournal.

Coming soon to a CVS near you. That would be contactless checkout in a partnership with InComm and PayPal. Starting later this year, in-store customers will be able to use both PayPal and Venmo for payment via a mobile app-based QR code. Importantly, this gives PayPal a physical store footprint with a major retailer, in what it hopes will be the first of others to follow.

The pharmacy vertical has been one of the strongest performers in the pandemic, and major chains CVS and Walgreens have benefited with food, beverage, and household items in addition to medical products. Both retailers are also opening walk-in health clinics that they hope will create more foot traffic and higher sales volumes along with it.

The following excerpt from an Atlanta Inno article reports more on the topic :

An Atlanta-based payments technology company is partnering with two of the biggest names in virtual payments to bring touchless checkout to CVS pharmacies across the country. InComm announced Thursday the company had released QR code technology customers can use to checkout via their PayPal or Venmo accounts without touching a keypad or signing a receipt. The technology will be implemented at all CVS stores, more than 8,000 in the U.S., nationwide in the fourth quarter this year.

“In the midst of Covid-19, we have seen an incredible acceleration of digital payments and touch-free payments,” Mark Britto, executive vice president and chief product officer of  PayPal, said in a statement. “Companies of all types and sizes are looking for ways to maintain the safety of their customers and employees, especially through touch-free experiences like curbside pickup and enhanced online shopping.” “In order to best serve our merchant partners during this unprecedented time, we have been exploring a wide variety of new and emerging payment technologies that could help them provide payment methods that abide by general social distancing guidelines,” Stefan Happ, president of InComm, said in a statement.

Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group

The post PayPal and InComm Bring Contactless Checkout To CVS appeared first on PaymentsJournal.

As post-COVID life takes shape, the increasing popularity of contactless transactions is making payments safer and more efficient. Contactless transactions allow shoppers to complete their purchase in seconds, often with just a tap of their credit or debit card. Consumers no longer need to exchange cash or enter a PIN number at the point of sale. Aside from providing greater convenience, contactless transactions also offer more security since they are typically processed over encrypted networks that are more difficult to break into than older technologies. As more businesses around the world adopt contactless payments in post-COVID environments, it is clear that this technology is here to stay.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless

Contactless and Contact-Free Transactions Post COVID:

• Some merchants offering EMV contactless, or a contactless retail app, still require the consumer to touch the POS terminal.
• Contactless payments may still require consumers to select a payment type, sign, enter a PIN, or select a receipt type.
• Note that merchants could offer contact-free through EMV chip as long as a PIN, signature or other acknowledgment is not required.
• Transaction data is not readily available to gauge the potential expansion of contactless payments.
• One plausible explanation is that, while the numbers may be expanding, they are not yet impressive enough for publication.
• Another explanation for unavailable data is that the overall decline in transaction volume due to COVID makes the results less compelling.
• Further, there are complications reporting contactless transactions due to signal capture in the databases warehousing transactions.

About Report

COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.

“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post Contactless and Contact-Free Transactions Post COVID: appeared first on PaymentsJournal.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless

How Many Contactless Debit Cards Are in Circulation?

• Mercator estimates that Visa, the brand on 72% of U.S. debit cards, has 93 million contactless debit cards in the U.S.
• Contactless debit will increase as the big banks put more contactless cards in the market and as smaller financial institutions prioritize the investment.
• Another indication that contactless debit will increase is merchant acceptance.
• When EMV liability shift kicked off in 2015, the EMV upgrade included contactless enablement; however, many merchants didn’t turn the feature on at the time.
• Visa reports 80 of the largest 100 merchants accept contactless cards, resulting in over 60% of in-person card transactions taking place at a contactless-enabled merchant.
• That is not to say that the transaction is in fact contactless, simply that the merchant’s technology is in place.
• In addition to merchants, cities like NYC, Chicago, and Miami have launched open-loop contactless payment systems for public transit.

About Report

COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.

“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post How Many Contactless Debit Cards Are in Circulation? appeared first on PaymentsJournal.

With the onset of covid, contactless payments have revolutionized the way we buy things without sacrificing our safety. Through a simple tap or wave of our debit card near a card reader, we can now make purchases and payments without worrying about physical contact with strangers. This has not only made buying things easier, but also faster and more secure as well. Contact-free payments are becoming increasingly popular due to their convenience and assurance of germ-free transactions. It’s no surprise that these modern payment methods have become even more useful during covid—as our world relearns how to do things at a safe distance.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left corner of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s report –COVID-19: The Power Behind Contactless

Contactless Payments Pre & Post COVID-19:

• While there was a 5% increase in contactless between 2018 & 2019, PIN and signature transactions were far more common.
• 18% of consumers used contactless in 2019, compared to 13% the year prior.
• Much of the jump in transaction activity over contactless is linked to the issuance activities of the largest financial institutions.
• In 2019, 40% of consumers paid for items in a store without a PIN or signature.
• In 2019, 57% of consumers paid for items in a store by signature.
• In 2019, 67% of consumers paid for items in a store by PIN.
• Before COVID, issuers were hoping to capture a greater share of cash transactions with contactless – that job might’ve just become much easier.

About Report

COVID-19 has created consumer interest and use of contact-free payment experiences as fear of infection from surfaces, including a point-of-sale (POS) device, drives new behaviors. While reports and surveys proclaim cardholders’ interest in contactless technology, the actual number of contactless debit transactions authorized on a contactless card or mobile app remains elusive. This report, COVID-19: The Power Behind Contactless, considers the available market data and Mercator Advisory Group research to better understand the level of contactless payment activity and the degree to which COVID-19 is affecting its growth.

“The onset of the coronavirus created the perfect storm of events that is driving awareness more quickly than all the promotional activities have to date. Cardholders’ wellbeing is the incentive to adopt a new payment method. More consumers are now aware of the contactless capabilities they have on their debit card, which is driving new users in addition to increased use by current users,” comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and author of the report.

The post Contactless Payments Pre & Post COVID-19 appeared first on PaymentsJournal.

According to a recent announcement, VTB Bank and the Burger King restaurant chain have implemented the ability to pay for orders in restaurants using QR codes through the Bank of Russia’s quick payment system. The adoption of this technology allows Burger King customers to pay for their orders using this new contactless payment method.

QR codes are certainly not a new technology and are becoming an increasingly common payment type. Alexander Botsiev, Head of Settlement Sales and Passive Products in the Transactional Business Department, senior Vice President of VTB Bank, commented on the announcement:

“We are seeing the growing popularity of non-cash payments and increasingly that means using smartphones. This change is due not only to the current situation, but also to the convenience of these payment methods. Customers always choose the most convenient method of payment, and the new solution using the quick payment system meets all the requirements, because it is clear, convenient for customers and significantly saves time on making payments. The latter is particularly relevant for the Burger King restaurant chain.”

Russia is not the only country getting into the QR code game. In fact, according to a recent article by Mercator Advisory Group’s Sarah Grotta, “PayPal announced that they will begin to offer this type of solution in many countries, including the U.S. Not only will this enable more merchants to accept non-cash payments, but it has the added benefit of creating a contact-free exchange between merchants and consumers which is certainly on everyone’s mind these days.”