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Chase Teams Up With CurrentC To Launch QR Based Chase Pay

October 27, 2015

Chase Pay CurrentC MCX

Just when we though the mobile payment space was starting to get its ducks in a row and align behind NFC technology, Chase has announced a QR based service. Chase’s Chase Pay platform runs on the much beleaguered CurrentC platform. Unlike competing mobile payment systems, which utilize wireless technology triggered by your fingerprint, CurrentC requires the scanning of QR codes. For businesses that make up MCX consortium, Chase’s involvement is great news and must feel like a lifeline. Besides being the first real vote of confidence for the platform, prior to Chase’s announcement users were stuck using either a store credit card to make purchases or connect the app directly to their checking account. Thanks to Chase Pay, CurrentC users will be able to charge to a Chase branded credit or debit card. Chase expect the service to launch in early to mid 2016, around the same time CurrentC is expected to launch.

But 2016 is a ways off and, if MCX’s previous CurrentC timelines are any indication, I would not hold my breathe for a launch in the early part of the year. MCX was formed in 2012 to create retailer buy-in for the CurrentC technology; if it does actually launch in 2016, it will already be 4 years behind the times. The original idea of CurrentC was to offer a payment system that every phone had the technology to use. But nearly all phones currently being sold include NFC payment technology and every day more people own phones with the tech. Relying on a multi-step process utilizing a phone’s camera and screen to scan and display codes is only becoming more needless and cumbersome over time. And let’s not forget the rise of wearable devices, which won’t work the CurrentC QR system. All told, the CurrentC service was slow to launch and has probably missed its window. The delay was likely due to decisions needing to satisfy all the companies which paid to join MCX; they all wanted a say in creating a payment service that benefited them. While CurrentC does offer much better store loyalty program integration versus other mobile payment systems, this is truly a side product of one of the primary CurrentC purposes: data capture. MCX designed their technology to capturing users’ buying habits across retailers and to share that information with member businesses. The other primary purpose of CurrentC was to eliminate credit card transaction fees charged to retailers (former Walmart CEO Lee Scott once said “I don’t know that MCX will succeed, and I don’t care. As long as Visa suffers.”).

If all of this sounds bad for the consumer compared to the high level of privacy, card choice, and convince offered by Apple Pay, Samsung Pay, and Android Pay, you are right! Consumer sentiment is overwhelmingly negative towards CurrentC and retailers are listening. Over the past few months several MCX members (including Rite Aid and Best Buy), who had been stuck in a very penalizing exclusivity clause, began offering NFC based mobile payments as soon as they were legally able to. Given the momentum, it is surprising (and disappointing) that Chase, a strong Apple Pay supporter, would have spent the time and resources to develop Chase Pay.

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by Doug Parker
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Samsung Pay Verizon Support Enable Update
Retail

Verizon Releases Update To Enable Samsung Pay

October 20, 2015

Samsung Pay Verizon Support Enable Update

When Samsung Pay launched in the US at the end of September, Verizon was the lone major carrier to not support the mobile payment system. At the time Verizon was very quiet, only stating that they were still evaluating the service. Typically this type of canned response can be inferred to mean “Don’t hold your breath.” It was therefore a surprise when a few weeks later, the carrier took to Twitter to announce that it had evaluated Samsung Pay and had decided to enable it on compatible devices. Unfortunately there was no timeframe given for the update. But just over a week after the announcement Verizon has begun rolling out a software update to enable Samsung Pay. If you are on Big Red and have a Galaxy Note 5 or a phone that is part of the Galaxy S6 family of devices, there is a mobile payment enabling update waiting for you! Samsung Pay users now just need more banks to support the service.

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by Doug Parker
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Retail

Square Files For IPO Worth Up To $275 Million

October 16, 2015

Square IPO Contactles EMV NFC

From its humble beginnings as a project at California based TechShop, Square, founded by Jack Dorsey, has become the main alternative to traditional credit card terminals. These terminal were expensive, often required credit checks and contracts, and had large processing fees. Square wanted to provide service providers and small business owners an inexpensive way to accept credit cards with reasonable processing fees. Their simple headphone-jack credit swipe has now grown into mobile payment receivers, full POS terminals, and even a food delivery service.

Square feels that momentum is on their side and that the time is right to become a public company; it has filed the paperwork for their IPO, believed to be worth up to $275 million. While the company is still not profitable, losing $77.6 million in the first half of 2015, Square believes it offers a compelling investment opportunity. It’s losses continue to shrink and making the move to a public company will provide Square with some additional working capital. No word on when shares will become available.

Square offers a very competitive payment processing option for small businesses with the low cost of equipment and small processing fees taking a lot of weight off of proprietors. I am always surprised though to see how many business are still using traditional terminals that cost hundreds of dollars and are more expensive to operate. If Square can figure out how to convert just a small percentage of these businesses, it is easy to see how the company’s bottom line can quickly improve. The key to creating these conversions might just be the requirement to begin accepting EMV (chip-and-signature) payments. Starting this month, business owners are now liable for credit card fraud from swiped cards; that is a huge risk for a small business. Given the necessary cost of equipment upgrade, Square’s margin priced $50 Bluetooth reader for both mobile payments and EMV seems like a no brainer.

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by Doug Parker
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Retail

Verizon Will Soon Support Samsung Pay

October 7, 2015

Samsung Pay Verizon Support Launch

Verizon has announce that it will soon support Samsung Pay. The carrier made the understated announcement about supporting the service via Twitter, stating that it would enable it through a future software update to compatible devices. Verizon was the only major carrier in the US not supporting the Samsung Pay when it launched late last month. At the time, Verizon stated it was in the “process of evaluating” the service and would provide an update if there was any change…clearly there has now been a change! Verizon did not set any timeframe for the launch, only disclosing that it would be available through a “future update.” If you are a Verizon user with a Galaxy Note 5 or a device in the Galaxy S6 family, we are guessing the update will hit sooner rather than later.

We continue to question Samsung releasing their own mobile payment system, separate from Google’s Android Pay. It feels like an unnecessary level of complexity and bloat when there is a nearly identical solution already baked into the Android operating system. The primary differentiator between the two services is Samsung’s use of MTS technology (which allows the phone to transmit card info to magnetic swipe payment terminals). Unfortunately we don’t think that MTS alone will cause users to switch to Samsung and with chip-and-pin and chip-and-signature becoming standards globally, the magnetic swipe’s days are numbered.

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by Doug Parker
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Retail

The Way We Pay Changes Today, Will EMV Chip Or Mobile Prevail

October 1, 2015

EMV Chip Credit Card October 1st

We spend a lot of time at Circuits And Cable Knit speculating on the future of fashion, wearables, and retail tech. What might be possible, what might catch on, and what won’t we be able to live without. There is one thing that is not up for discussion through: the way we pay for things will change. And today is the day that the change begins. Starting October 1st, retailers are now liable for any fraud that is the result of a magnetically swiped charge card.

You might have noticed over the past year that all of your credit cards have been replaced with a version featuring a chip on the front left side. This is called an EMV chip (an acronym of it’s creators Europay, MasterCard and Visa) and retailers will now be asking you to use it instead of simply running your card through the magnetic reader. EMV chips have been common place for decades on charge cards around the globe but not in the US. Banks have been hesitant to push users toward the tech because, while it is more secure than our current magnetic swipe system, it is more complex and cumbersome and requires new payment terminals. But with the US ranking as one of the leading country of credit card fraud, banks are now willing to force the change.

There are two implementations of how an EMV equipped card can be used.  

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by Doug Parker
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Retail

Samsung Pay With MST Tech Officially Launches In The US

September 28, 2015

Samsung Pay MST Launch

It’s September 28th, which means, as promised, Samsung Pay is now live in the US. Unlike Apple and Google’s competing tokenized mobile payment systems, Samsung’s technology allows you to use cash registers equipped with either NFC or a magnetic strip reader. The key is that compatible Samsung devices can emit a weak magnetic field that card readers perceive as a card being swiped; the technology is called MST or Magnetic Secure Transmission. Simply place your phone near the reader while activating Samsung Pay and the transaction will be completed. As far as compile devices, there are not a lot; you are limited to the company’s newer models: the Galaxy S6, the S6 Edge, the S6 Edge+, or the Note 5. It should be noted that Samsung Pay also relies on support from both your credit card issuer and cellular provider. At this time Verizon has no plans to support Samsung Pay and only cards from certain the major banks are allowed (sorry Chase customers).

Early review of the payment system seem mostly positive. Some of the videos online do show a bit of fussing to get payments to process though, but that could be user error more than anything. Early users have pointed out that the MST technology works well but is not compatible with any payment terminals that require you to dip your card, versus swiping.

MST is an interesting technology. The clear advantage it provides Samsung is that their mobile payment system can be used at almost any existing payment terminal. But there are two major issues. First Samsung’s timing couldn’t be worse with the retailers becoming liable for magnetic swipe based fraud beginning October 1st. Even though Samsung Pay is tokenized, try explaining that to a store clerk that has only been told not to accept magnetic swipe payments. Second, more and more businesses are in the process of switching to terminals that can accept NFC (including Square offering small businesses free NFC readers). This means that while Samsung’s MST tech is compelling, it is a short term solution and one might prove to be difficult to use. Ultimately, it is unlikely to drive many potential customers to a Samsung device. Interestingly, wearable devices are seen as the tech that offers a meaningful level of convince for mobile payments. It is therefore intriguing that Samsung’s upcoming flagship wearable device, the Gear S2, will not support MST payments, instead only supporting NFC based ones.

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by Doug Parker
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Retail

Android Pay Officially Launches Today

September 10, 2015

Android Pay Launches

Google has announced that Android Pay will officially launch today. After being rumored to premiere several weeks ago, the company’s Google Wallet replacement will start hitting handsets over the next few days. Android Pay is functionally equivalent to Apple Pay, providing Android users a tokenized NFC payment system. Unlike Google Wallet, which required users to preload a virtual charge card, with Android Pay you simply connect your credit or debit card to make charges. Android Pay should be accepted any place Apple Pay and other contactless payment methods are accepted.

Google’s launch of Android Pay is well timed, hitting just before the launch of new iPhones and Samsung’s competing service. Samsung’s service will officially begin on September 28th in the US and, unlike Apple Pay and Android Pay, will allow you to use your Galaxy handset to pay at any magnetic swipe register. All 3 services will beat the much delayed, and outdated, CurrentC to market; the QR based CurrentC began its first single market test a few weeks ago.

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by Doug Parker
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