Mobile Payments

By Christopher Coonen, EVP Global Solutions, Sales Marketing Strategy at Ingenico

Market Trends
The mobile technology market all over the world is booming, with consumer demand for mobile devices on the increase. More mobile phones are sold than PCs and for the first time in 2011, more tablets were shipped than PCs.

Certain key trends are simultaneously driving the mobile payment market, boosting its exponential expansion. For one there has been a broad secular shift away from cash and check payments towards debit and credit. Moreover, as merchants continue to strengthen their e- and m-commerce impact and online initiatives such as Google wallet or paypal gather speed, debit and prepaid payments are increasing at a faster rate than credit.

There is a convergence of online, mobile and point of sale payments amongst retailers. With mobile technology underpinning payment flexibility and enabling consumers to use the internet and mobile devices to change the way they pay for goods, both in-store and online. Retailers are strengthening cross- and multi-channel strategies to attract new consumers and generate extra revenue through value-added services such as pre-paid, loyalty and couponing initiatives and differentiate from competition.

The next generation major payment platform is, therefore, most certainly mobile. The ubiquity and multi-functionality of smartphones position mobile well for replacing the physical wallet, whether it be by internet-enabled transactions at the point of sale or remote payment, loyalty and couponing transactions. Micropayments, the demand for online content, services and virtual goods are all expanding, with gaming, social and media marketplaces such as Zynga, Facebook and iTunes further driving the mobile payments trend. Consumers today are increasingly connected and expect a high availability of services and ever more choice and flexibility to buy wherever and whenever they choose.

Developing countries are also driving the growth in mobile payment, particularly amongst the largely unbanked populations. Markets that do not rely as much on traditional credit cards and banks, and have little existing infrastructure, are ripe for new payment options. Remittances and money transfers are also gaining in popularity in emerging nations.

Mobile Payments, online and at the Point of Sale
Mobile payment is delivering new consumers, incremental revenues and increased efficiency, bridging the gap between the online and physical worlds. There are essentially two sides to mobile payments; paying for goods online, using a mobile phone or through native applications, and using it as a point of sale wallet replacement. Though the shift of online commerce to m-commerce has been the most active up until now, the opportunity to increase mobile payments in stores is still an emerging and largely, and as yet, untapped market.

Apple has created an in-store mobile payment app; their Easypay solution and personal mobile point of sale. It identifies which Apple store the consumer is in, allows them to request help, compare prices or purchase goods, scan and pay for them using the iTunes funding method, then walk out of the store with the goods. Key players such as Apple are convincing their consumers to embrace mobile payments in stores and this type of mobile payment is poised to take off. McDonald’s, Starbucks and Amazon are already following suit, offering a new purchasing experience that blurs the lines between the on- and offline worlds.

Contactless payment in-store is also on the increase. There are a growing spectrum of uses and implementations of contactless/NFC (Near Field Communications) technology. It can give merchants a real competitive advantage and companies all over the world are gradually embracing it. One after the other, the leading payment card associations have announced contactless payment programs and have issued corresponding specifications – MasterCard PayPass, Visa PayWave and American Express ExpressPay. The leading card associations are leading the way to contactless payment and have good reasons to do it. Customers and merchants are eager to reduce transaction times and accept payment from devices such as smartphones. Ingenico has key capabilities in all areas of contactless payment including magnetic stripe emulation, contactless EMV, mobile terminals, portable terminals and fixed terminals. Ingenico has brought its exceptional experience in secure transactions to deliver solutions that provide a secure contactless experience to the consumer and the merchant in massive rollouts worldwide. It is likely that both NFC and “in the cloud” models will co-exist in the future – the question still to be answered is “who owns the consumer”: the Telco, the wallet provider or the retailer?

Benefits of Mobile Payment
The advantages of mobile payment for businesses and consumers alike are compelling. Consumers benefit from increased convenience, merging their wallet and smartphone into one convenient tool that is always with them, access to targeted deals and offers, and the ability to exchange funds with other individuals. Businesses are able to reduce queues and waiting times at the Point of Sale whilst increasing the level of personalized services available, boosting conversion rates, consumer loyalty and up- and cross-sales’ margins. Mobile payment is also key to the image of the retailer, to be seen as offering cutting-edge technology for tech-savvy consumers and staying ahead of the curve. Social or location marketing is another unique advantage; consumers “check in” to their location, purchase a product, then tweet or update their status for all their social media followers to see: marketing at its most mobile.

Mobile payment offers businesses the ability to accept payment away from their home base, and the number of home delivery businesses and services are on the rise. Offering a secure and simple means for accepting payment away from their storefronts or offices enables a reduction in the risks linked to transporting cash and administering checks, faster clearance, payment and delivery times and the opportunity to sell associated services.

Transportation is another field where mobile payment allows businesses to offer a unique level of service and efficiency, through on-board sales and mobile ticketing. Payment flexibility is greatly increased, with market studies showing a majority of travelers preferring to pay by card. Mobile payment accelerates the sales and payment process, dispelling issues linked to currency conversion and boosting access to services such as duty free.

Mobile payment transforms any environment into a Point of Sale, revolutionizes the consumer experience and frees the customer from time and place constraints.

Ingenico, leading the mobile payment revolution
Ingenico is the world’s leading provider of payment solutions, with over 17 million terminals deployed in over 125 countries, 3600 employees worldwide and providing a complete offer of secure transaction solutions to banks, retailers and single outlets globally. This offer combines payment terminals, terminal estate management, payment applications, connectivity, routing, acquisitions and value-added services. It covers the whole spectrum of sales channels used by retailers; payments at the point of sale, over the Internet or by mobile telephone.

The relationship between retailers and consumers has considerably evolved. Consumers are now looking for the freedom to compare products and pricing, to purchase through an innovative consumer experience. To meet consumers changing needs, retailers are constantly extending sales channels and diversifying consumer touch points.
With retail in mind, Ingenico has built its offer to match the expansion of its retail customers, market demand and new consumer trends. Ingenico provides multi-touch point, cross channel, secure payment and future proof solutions with an optimized total cost of ownership and time-to-market.

Ingenico has enriched its e-payment platform with both mobile access capabilities and the ROAM wallet, making it possible to convert a mobile device into a secure POS terminal. ROAM just released a swipe and NFC reader and will continue to innovate. Merchants can now quickly and securely process electronic transactions on mobile devices regardless of location, from credit and cash sales, voids, refunds and even process offline when the phone has limited coverage. What is more, ROAM provides a mobile gateway that allows merchants to conduct targeted marketing campaigns via customers’ mobile devices. The software provides merchants with a mobile storefront to display and sell their products, as well as market to customers through promotional messages. ROAM is also developing a mobile wallet for its merchants aimed at increasing customer retention by providing convenience. The program will let ROAM pay clients store customer payment information that is protected by a username and password, which can then be used in lieu of payment information for return shopping trips.

Ingenico enables any terminal, with the latest NFC protocols, to accept mobile payment, and is working to provide payment interfaces for any device, regardless of the integration or operating system involved. In short, Ingenico has built a complete offering to provide merchants with the most adapted mobile payment solution tailored to their needs and providing a gateway to increased merchants’ services.

Contact Information
Ingenico
28-32 boulevard de Grenelle
75015 Paris, France
Tel : +33 (0)1 58 01 80 00
Fax : +33 (0)1 58 01 91 35
www.ingenico.com