Money2020 Expo - Key Conversations and Companies & Services to Watch

By Randy Smith,

Mobile Wallet Media

November 2, 2012

Is Bluebird the way to fly in prepaid? This monthly fee free model will do well.

The focus of the event was clear. Mobile and Digital Wallets are the future. Many great insights were shared by top executives, providing a preview of their direction and focus.

You would never have guessed this was the premier event for Money2020 Expo. The abundance, quality and diversity of keynote speakers, presenters, panels, moderators, exhibitors and attendees would, if you were an industry outsider, make you think the event had been held for years. It was impossible to capture it all and attend all panels and meetings! I'll start with companies I interviewed.

American Express

Joanna Lambert of American Express shared with me a bit of the company's vision and focus of the future:

"We want our Serve app to be used several times a day. This requires an intuitive interface focused on saving time and money. Maybe it's saving a trip to the bank or receiving a notification from your local bakery when the when rolls are hot and fresh? . . . We want to help merchants to drive incremental value and increase consumer loyalty . . . We are very open to partnering to reach our goal of being agnostic . . . With Bluebird our aim is to make loading money and transacting as fast and simple as possible . . . We are spending a lot of time asking what consumers want. We are transitioning from payments company to a service company."

I've always seen Amex as delivering extra value via services like OPEN and their concierge services. If they can continue to provide that extra value and merge it with Serve, I believe this is a winning formula. By the way, we all can take part of Amex's upcoming nationwide event, Small Business Saturday. This event on November 24th has the right focus, social strategy and charm to make for a big hit in supporting your local small business. Check it out and spread the word!

First Data

I sat down with Dominic Morea and Mark Herrington of First Data to hear first hand about their new merchant and consumer engagement platform Universal Commerce.

Dominic and Mark shared: "Universal Commerce is a framing strategy. We've realigned product around this concept. We reach over half of the terminals in the U.S. and paired with our Open API - Rapid Connect. New value-added services and offers tied to transactions can be delivered seamlessly. We have the ability to recognize a consumer and link relevant offers.  We can help publishers with precise results."

I've looked far and wide and First Data does have a solid vision about a the future of connected or Universal Commerce. It's worth taking a look at their 3-minute video below about Universal Commerce.

First Data's Vision of Universal Commerce

Read the entire article!

PayPal + Discover = Dynamic Duo that could also be THE Disruptive Duo!

By Randy Smith,

Mobile Wallet Media

October 5, 2012

I think we've only seen the tip of the iceberg here. Discover was once the 'New kid on the block,' as was PayPal. Now both are firmly established as the number 4 and 5 players in payments. These two companies have incredibly complimentary strengths. Discover has much room to grow and PayPal has always been the innovator and wants to expand it's presence from the online to the physical world. Their current partnership is one that is mutually beneficial. PayPal rides the rails of Discover's acceptance in the real-world stores and Discover taps into PayPal's Digital Wallet, alternative payment methods and their as 110-million+ regular users and 9-million+ merchants.

IF they can figure out how to BEST LEVERAGE each other's strengths, they could both DOUBLE their market share in as fast as 2 YEARS! Yes, I'm saying as they do on infomercials, "But wait there's more!"

Continue to read entire story.

Embracing Innovation is Answer to Tech Disruption at the WSSA Conference

By Randy Smith,
Mobile Wallet Media
September 29, 2012

The Western States Acquirers Conference had high impact statements and speakers delivered in a small package. Two of the general sessions were "Embracing Change; Staying Relevant in the Changing Payments Landscape" and "Future of Acquiring . . . Will you Wipe Out or Catch the Big One?" The wake-up call to reality is ringing and it is time to answer the call. If you can't beat the join them, might provide the answer.



It seems like the overarching message being delivered here was, don't panic, but do take action now! Attending diverse trade shows in this past year and past 15 years, I've come to hear the words 'Disruption' and 'Innovation' a lot. These two words, in 2012 have lead the pack for trendy words used in business and technology. The words address the issue of change and remaining 'relevant,' also another trendy word in our vocabulary today.

The word Disruption in Silicon Valley and the tech industry represents a method of being innovative by creatively solving problems or providing a solution that could be done in a much better, simpler, quicker or more cost-efficient way. Disruption is innovation and vice-versa. It is only when it is you that is being disrupted that it is viewed with disdain or threat. But this is business and competition and change is always the constant. To stick your head in the sand and think that things will remain the same as they have always been is strategy that will deliver your worst fears to become reality.

Innovation is offense. It is moving the ball forward and the best defense is a great offense. The SR-71 BlackBird was developed in the 1960's by Lockheed Corporation. It can fly as high an altitude as 100,000 feet with 3 times the speed of sound (3.5 Mach). It was in use by USAF for 40 years and was retired in 1998. It actually had no defensive weapons, but relied solely on it's speed, stealth and maneuverability to evade it's enemies. In all it's years of service it was never shot down. But even it was retired after 30+ years in service. Why? It was retired because the next generation of technology was ready to replace it. And now is the time that new innovation is replacing the status quo.

Continue Reading the rest of the article

Moneyball-Like Innovative Disruption is Cure for Mobile Wallet Dysfunction

By Randy Smith,

Mobile Wallet Media

September 21, 2012

"When defining moments come along you either define the moment or the moment defines you." Kevin Costner, Tin Cup (movie) - Don't let source of innovation derail you.

Apple's decision to not include NFC in their iphone 5 has extended the runway for disruption via alternative technologies enabling Mobile Wallets and payments.

Every move that is made by PayPal or Apple affects the entire sphere of the mobile payments and Mobile Wallet world. The non-inclusion of NFC by Apple will be sure to alter and delay Google Wallet & ISIS.

All Things Digital just published an article by Carey Kolaja, Chief of Operations for Global Product & Experience at PayPal. This article is a relevant part of the public conversation about the Mobile or Digital Wallets. I will also propose a philosophy that must be adopted to solve problems and engage innovation in general and specifically in this space.

Continue reading article at MobileWalletMedia.com

Tour de Mobile Payments - The Mobile Wallet & Main Street

By Randy Smith,
Mobile Wallet Media
September 12, 2012

How will mobile payments mesh best with Main Street?

It seems like it's gotten as complex and confusing as can be for retailers and even the mobile payment service providers themselves. 

We'll provide a legend to map out all the pieces, as well as strategy and opinion. At Tour's end the future of mobile commerce may be a bit more clear.

A foundation was laid for this article with our feature 7-Week Series, just completed on September 10th, "The 7 S's Required for Success in Mobile Payments." If you have not read it, you've missed much.

Before we begin the tour, let's look back at the history of contemporary mobile payments and wallets that has brought us to this point.

In 2008, Mocapay debuted at ETA and showed us an early vision of what a Mobile Wallet might look like. Another company, Mobibucks, also debuted at ETA in 2008, showcasing a solution that looks exactly like PayPal's 'Mobile Phone + PIN' entry on terminal solution (I reached out to Mobibucks, but never heard back for comment about PayPal's solution).

In 2009, MFoundry built the foundation for what would power the Starbucks Card Mobile App.

In 2010, SquareUp turned our heads by turning our iphones into a credit card terminal.  Also in 2010, TabbedOut launched by integrating directly to POS systems, thus enabling 'Pay at Table' transactions from the mobile phone without requiring a mobile POS device or to wait upon the server to pay and close out a tab. In the Summer of 2010, ISIS announced it was forming a carrier network. In the Fall of 2010, my former company, MobilePayUSA, followed by debuting at TechCrunch, giving us the first vision of what a 'Universal Mobile Wallet' might look like (Yes I'm a Homer). Paydiant and Cimbal showed us the way to turn a 2D bar code into a transaction ID and way to pay by scanning with a smartphone. And, Dwolla also launched reducing fees to 25 cents a transaction for merchants. 

In January of 2011, Starbucks Card Mobile launched and by March had already provided a solid proof of concept for the Mobile Wallet. Corfire was developed and would become the platform of choice for Dunkin Donuts. Google Wallet utilized MasterCard's PayPass to launch it's Mobile Wallet in the Summer of 2011.

2012 saw Visa debut V.Me at ETA, but has yet to make a push as a Mobile Wallet. PayPal, though it debuted a Digital Wallet in the Fall of 2011 and has showed us two alternative ways to pay, but has yet to debut a Mobile Wallet in the USA. PayPal has however shown us a preview of their Mobile Wallet plans in the UK.

This past Summer, Levelup and Kuapay showed us how to sprint with flair and relevance. After a Spring announcement, MCX revealed it's identity as a Merchant Coalition Mobile Wallet. Dunkin Donuts also got into the race and is powered by Corfire. And Moneto just recently announced it's Mobile Wallet works with PayPass. 

Will Apple's Passbook, teamed with the iphone5 (with NFC) and iO6 soon become a Mobile Wallet? 

Continue reading rest of article at MobileWalletMedia.com.

NFC and 2D Lead the Way to Scale Mobile Wallets, but is there a Black Swan?

By Randy Smith, Mobile Wallet Media
Monday, September 10, 2012



Scalability - Week 7 of 7-Week Series

The less barriers to adoption and the more universal or "Future-Proofed" solutions are, the greater the chance of adoption by all tiers and types of stores. The biggest winners will be the solutions that are ubiquitous as cards are now.

Retail commerce has never been at such an exciting time as now, nor has is been at such a technological crossroads. In the late 90's it was e-commerce, loyalty and gift cards that retailers and service providers were busy implementing. Now a mirror-image of the 90's is being re-enacted with the goal of enabling mobile to replace plastic and paper cards & coupons. With literally next to zero infrastructure in place to date, the solutions that can move fastest, in their move to mobile, will win the most market share. View rest of article at MobileWalletMedia.com.

Daily Deals Manifest Destiny - Can One Live On Deals Alone?

By Randy Smith, Mobile Wallet Media
Thursday, August 30th, 2012

Daily Deals are indeed not dead, but must evolve and transform if they are to survive the mass adoption of the Mobile Wallet. Daily Deals as we know them will continue to exist, but they will need to reduce fees and discounts drastically to reach their 'Manifest Destiny.'


So just a couple weeks back I wrote about how Daily Deals are perhaps too dysfunctional to survive. I wrote the article in response to the slew of bad earnings and news reports about Daily Deals companies. This is the first article in our 'SuperCommerce Series.' Tighten your belt it's going to be a wild ride!

Daily Deal companies will need to change their revenue, distribution and redemption model to survive the coming 'Mobile Wallet Revolution.' In my previous article on Daily Deals, I spoke much about Daily Deals limiting their market with high fees and discounts. I'll add a bit to that here and now.

If Daily Deal merchant fees are reduced drastically and allow merchants to set lessor discounts or rewards, more like LevelUp, they will have a chance to provide deal vouchers for just about anything. That's right, I said anything! So yes, it will be possible for "One to Live On Daily Deals Alone!"

Well, perhaps not anything, as we know money can't buy many things.

I see this as a new "Mega Trend," one that will completely transform not just mobile commerce, but all retail commerce! This trend itself could be every bit as disruptive as mobile, the web and the mobile wallet itself. The implications of this transformation will alter all retail marketing and advertising! If you think hard about this, you will realize the spending and purchase decisions of consumers will be altered once Daily Deals are in the Mobile Wallet. With the consumer armed to carry as many deals as they want, this will prompt the consumer to buy more deals as they are easier to manage than the current, 'Clunky.' and non-seamless, redemption methods. Therefore, if the purchase cycle is moved forward to "Lock-in customers and future sales," then marketing and advertising will need to redraw their lines around this.

So is what I'm saying here that Daily Deals will become like a new virtual currency? Yes! If this new breed of Daily Deals is convenient enough and enough brand name retailers adopt this model, consumers should scoop them up like crazy. So rather than a high-discount and costly coupon or voucher to drive consumers to the store, a deal with a lessor discount, say a $110 voucher for $100 in cash. LevelUP has already shown us a glimpse of this type of offer. Convenience is traded for larger discount. Consumers will take a "Good Deal," and so may merchants, if it is easy to obtain and redeem. This model I believe will be a powerful force to direct, not just traffic, but lock in loyal customers and sales in advance. If one goes down the rabbit hole deeper, if a consumer has spent their funds on "Mobilized Daily Deals," then the decision to where they shop is done.

These types of deals have long been available during the holiday season via bonus gift card offers and consumers may purchase gift cards online at a discounted rate. But the inconvenience of carrying multiple cards has made it impractical at scale. With the Mobile Wallet, such barriers are removed.

OK, now onto distribution. If you are a Daily Deal company, you are ripe for disruption if you are not plugged into and integrated with the major Mobile Wallets. Why? Because the convenience associated with receiving and redeeming offers via the Mobile Wallet will demand it.

Imagine if redeeming a Daily Deal was just like making a purchase using the Starbucks Card Mobile or LevelUp app. This is the future of Daily Deals and really offers period. Mobile Wallets will make getting great deals easy, simple, convenient and fast! Deal companies, merchants and marketers should get on board this "train of thought" or be left behind with a worthless ticket to nowhere.

So with, Google, PayPal, ISIS, MCX, Square, LevelUp and more Mobile Wallets launching this Fall or 2013, don't you think they might be interested in offering a high-margin, Daily Deal service of their own? Well, one may say it may be easier to just partner with Groupon or Living Social or another of the myriad of the high-volume, Daily Deal companies. On the other hand, with the stock hit Groupon has taken as of late, perhaps they are ripe targets for acquisition by Mobile Wallet companies. Via acquisition they may lock in merchant relationships, a sales force, a platform and revenues, all in one fell swoop. Or perhaps Daily Deal platform infrastructure companies will be ripe acquisition targets? Mobile Wallet companies are all armed with a massive customer base and billions of bucks. Buying infrastructure alone could make for an exellent investment. Of course some of these companies may already own a Daily Deal platform.

Amazon, which has a large investment in Living Social, may stand the best chance to stand firm and negotiate deals with all major wallet players. Amazon, has yet to make a move or tip it's hat with regards to it's plans for a Mobile Wallet, even though they are very adept at processing payments.

Apple, with it's much anticipated launch of it's iphone 5, with or without NFC and possible announcement that Passbook will become a complete mobile wallet, is news we are all eagerly waiting to hear.

First Data launched a new service named "OfferWise" at SXSW this past Spring. To quote First Data from their YouTube page "First Data's OfferWise solution is a revolutionary product that allows consumers to electronically link offers and deals to any payment card or mobile wallet." The release by First Data in June,  is titled "First Data OfferWise Solution Enables Universal Commerce for Offer Publishers and Merchants." First Data, if you are not aware, processes an estimated 60-65% of all retail transactions. If OfferWise can be a "platform in the cloud that seamlessly ties offers to Mobile Wallet," they could prove to be a platform of choice for Mobile Wallets and one not to ignore. 

Daily Deals in the Mobile Wallet, for clarity's sake, will not actually be a "gift or prepaid card," but will be a voucher, that may be redeemed via one's Mobile wallet, at a specific set of retailers, for a limited time. The other side of the equation to enable Daily Deal to be processed has to do with the integration to Point of Sale (POS), which I've touched upon in recent articles, and hence will not belabor again now.

How Mobile Wallets, Daily Deals, POS vendors and processors all decide to work together to build the future of Daily Deals and mobile commerce will be interesting to watch, but rest assured and God-willing, I will be here to comment upon it or be part of building it.

To wrap it up, and set up my 'Shameless Plug of the Day,' as a brand new journalist and as a FIRST-TIME EXPECTING DAD, I'll leave some meat on the bone for a later discussions and paid consulting. Just remember to tell others you heard it here first, refer others to read my articles and hire me to consult. I'm also open to offers I cannot refuse.



Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, commerce, daily deals, security, loyalty, marketing, prepaid cards, virtual currency and the convergence of them all with social and local. Randy Smith, the Founder and Chief Editor of Mobile Wallet Media, was also the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Startup Alley Winner in 2010.

A Glimpse of PayPal Mobile Payments for the USA in the UK?

By Randy Smith,
Mobile Wallet Media
Tuesday, August 28th, 2012

Could PayPal's "Pay InStore App," now on trial in the UK, be a preview of the future of PayPal's mobile payments in America? It seems to be the 'Missing Link' to provide mobile payments in the US. It appears to work much like the famed, Starbucks Card Mobile App.





I like this solution. It is as it says in their video "FAST, EASY, SECURE AND SIMPLE."  The PayPal Blog announced in May of 2012 their "Pay inSTORE" app would be availble for use at Oasis and other major retail brands. This app is available on iphone or Android and allows customers to pay via PayPal. This app enables retailers to use their existing infrastructure to add mobile payments.

PayPal's UK, Pay InSTORE App may be used in one of three ways:

1) Mobile Checkout via ipads.
2) Scan a bar code from the app.
3) Type the number below the bar code directly into the payment terminal.

The Pay inSTORE app may also be used to redeem offers collected online and forwarded to phone app. PayPal users may also opt in to receive and redeem special offers using the app.To quote the PayPal video "The app works with or without signal." as well. This is big!

The UK PayPal In-Store Checkout, like it's 'Sister App' in America, allows users to pay without using their mobile phone. In America, users enter their mobile phone number + pin and in the UK users enter a user or transaction ID to make a payment. Correct me if I'm wrong, but this will require integration at POS to accept these transactions. Payment terminals are programmed or setup to accept only a certain range of gift card numbers. Each gift card provider gets certified on each terminal but merchant acquirers can program terminals to only enable transactions through their partner processor. Having users enter manuelly, a virtual card number, representing a credit card, does not make sense as it opens the gateway to incompliance with PCI.

PayPal's, UK inSTORE Checkout enables merchants, unlike in the US, to scan a bar code to enable mobile payments. It appears the POS register will need to be setup to scan a 1D bar code as a gift card. This can be fairly straight forward, if the merchant has access or ability to configure their POS software to make this adjustment. From there it gets a bit trickier.

Each POS software has a gift card port and some are hard wired to a single processor or solution. If the processor has partnered with PayPal, then they will be able to route the transaction for approval through PayPal. Of course it is possible, through their recent partnership with Discover, that PayPal transactions could ride the rails of Discover, with the processor routing the transaction as a credit card transaction. If this is the case, the processors would likely still need to convert transactions from a non-financial or gift card transaction to a financial or credit or debit transaction in order to reroute through Discover. This may be an unnecessary or not the most easy step due to legacy systems.

Processors such as Mercury, PayPros and Merchant Link may have a key advantage here to utilize their existing relationships with POS vendors. First Data, TSYS, Global, ChasePaymentech and Vantiv (5th 3rd) may also make a big play here and now if they choose to do so. Eventually the transaction would be routed to PayPal to gain the actual authorization using the user's chosen method of payment encased in the Digital Wallet.

Though PayPal may be offering a preview of their mobile payments future for the UK and beyond, it still will require some POS and processor integration. Could PayPal already be partnering directly with POS vendors such as Micros and NCR to create a direct connection to PayPal?

This is by no means out of the question and makes a lot of sense for them to do this very thing. By cutting out the processors, they are creating their own payment network with each direct connection to PayPal. However, I'm sure most processors would wisely partner with PayPal here to take advantage of the 100 million+ PayPal users that PayPal would want to route through their gateway. This seems to be the way to go and is a Win-Win-Win, with the third 'Win' being PayPal connecting merchants with their users.

If processors decide not to work with PayPal, then I'm sure PayPal, if it has not already offered POS vendors the option to connect their software directly to PayPal's API yet, will soon be announcing this soon. I'm not trying to trump PayPal's news or lead them down the road that is available to them, or maybe I am doing one of such? However, PayPal is not the only one that can, will or has already begun building direct payment gateways as such that connect POS to Mobile Wallet, but they will surely be a tough competitor in this space.

There is still, as I pointed out in my prior article on PayPal, another way to avoid this problem of integration, of which Square may have the same problem, and seamlessly use their partnership with Discover to enable their new 'Pay InStore' app, thus requiring no software or hardware integration at point of sale.

I again offer my consulting services. PayPal, networks, processors, POS vendors or Mobile Wallet companies such as MCX please reach out to discuss how we might work together. I look forward to talking to innovative people and companies soon!

Yes, I understand this is not normal journalism, but I'm not a normal journalist. I invented one of the original Mobile Wallets and have been an entrpreneur most of my life and a journalist for less than 30-days.



About Mobile Wallet Media
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, marketing, loyalty commerce, security, prepaid, virtual currency, daily deals and the convergence of them all with social and local. The Chief Editor, Randy Smith, was the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Award Winner.

The Mobile Wallet Olympics Have Begun!

By Randy Smith, Mobile Wallet Media
Monday, August 27th, 2012


This is week 5 of a 7-Week Series: The 7 S's Required for Success in Mobile Payments

Let The Games Begin!

Time is money in business and retail and possibly even more so with Mobile Wallets. The wallets that will make the biggest impact will be the one's with the most transaction SPEED at Point of Sale and most easily and seamlessly integrated with POS.

During and since the London Olympics, a fast and furious slate of news about Mobile Wallets strolled across our screens seemingly every other day. With all the pomp and positioning on par with the actual Olympics, I believe the 'Opening Ceremony for the Mobile Wallet Olympics' has officially taken place.  But rather than just two weeks of competition, the 'Mobile Wallet Olympics' will play out over the next 2-4 years.

The race for victory in mobile payments is much like the actual Olympics. In the actual Olympics there are a multitude of athletes, events and countries with clear-cut favorites and the underdogs, of which we love to see both win medals. With the Mobile Wallet Olympics, rather than people and countries competing for medals, there are products and companies competing for market share vs. medals. The top 3 companies that end up on the medal stand will garner most of the money and market share, but like those that make it to the finals in the actual Olympics, there will be victory and rewards to share in as well. And of course there will be many companies partnered to support and give their marque product, their Mobile Wallet, the best chance for success.

In replacing our good old friend the 'Mag-Stripe Card,' mobile payments cannot be slower. At POS the NFC Tap and the 2D bar code scan appear to be the clear front runners. Either of these mobile payment methods seem to be just as fast as cards or cash.

For Mobile Wallets to succeed they need SPEED of adoption and integration. The more simple, more options and more reasons merchants have to adopt technology, the more likely they will do so. Be it Usain Bolt or Michael Phelps in recent Olympics or Dale Earnhardt Jr. of Nascar on the race track, less drag and better mechanics are two key differentiators that set them apart from the rest. Of course a high level of talent must serve as the foundation for success to redeem these benefits. A merchant without a 2D bar code reader rigged for coupons or payments will soon be requirements to compete in market that is getting ever faster and efficient.

For readers not akin to sports analogies, please forgive me as I am a avid sports fan and ex-athlete (football, basketball, volleyball, hockey and baseball). Hopefully it still helps with perspective and vision.

For a POS mobile payment method to become a standard, the easier and more quickly it is for merchants to integrate, may make all the difference. Right now is seems that 'NFC is the turtle and the 2D bar code is the hare' in the race for standardization, but this race will tighten as more reasons are added for merchants to adopt new NFC or 2D bar code equipped terminals.

I found a good summary article, describing 'Future-Proofing' payment terminals. This article by MerchantAccountGuide.com, quotes Mike Duffy, president of Chase Paymentech: "As emerging payment options gain adoption in the U.S., merchants are looking to make the customer check-out process as easy and safe as possible. The Future Proof terminal is a one-stop solution for merchants to keep accepting today's forms of payment and prepare for new consumer payment preferences on the horizon."

While Chase and Verifone lead the market in showcasing of 'Future-Proofed' terminals, Merchant Account Guide describes Merchant Wherehouse's terminals as follows:

"The company introduced its "agnostic" Genius platform, which can be integrated into any POS system, regardless of device or operating system. Like Verifone and Chase, Merchant Warehouse has also been throwing around the "future proof" label. And it claims that Genius can "integrate every conceivable transaction technology, payment and type and customer engagement program" -- including  NFC, EMV, QR codes and mobile payments, as well as loyalty, gift and reward programs."

In my opinion the 'Four Horseman' of the Future-Proofed terminal must include the following types of readers: 1) EMV, 2) NFC, 3) 2D bar code and 4) mag-stripe. Of course 2D bar code readers are an investment ($150 - $300 each) some retail merchants have already made. It's my strong bet that many more of the Mobile Wallet apps will use, like Starbucks and LevelUp, the display of a 2D barcode to enable mobile payments. If the payment terminal has a 2D scanner, it will be able to capture the card credentials, actual or tokenized, and process the transaction with any POS system, without integration.

A 5th horse in the race for alternative payments may very well be Pay-Pal's 'In-Store Checkout's Mobile Number + PIN' solution. I know I said in my last article this solution, "as is," is not secure enough to scale without massive potential for fraud, but I think they will soon rectify this problem. When they do, this will be a very convenient and secure product.

Most POS software allows for configuration of their software to scan 2D bar codes for the purpose of payment. This is already being done with gift cards. However, is there enough value for the merchant to buy and configure their software to do as such if they have not already done so? Well, with Square and LevelUp already processing their mobile transactions as such, I think there might be. An additional question that must also be asked is:"Will there be added difficulties to connect closed loop with open loop or the proprietary Mobile Wallet platform? I believe that the 2D bar code will become a standard for processing mobile payments and that all Mobile Wallets must have a 2D bar code display option to process payments.

Future of Mobile POS
I believe 2013 is going to be a huge year of adoption of mobile POS solutions. This is due to the perfect storm of mass adoption of smartphones, payment apps and ipad mobile POS solutions that increase speed, convenience of checkout for merchants and consumers alike. Plus mobile POS checkout can also enhance margins for merchants and discounts for consumers. All the momentum in the media with major retailers like JCPenny and Starbucks making moves to fully embrace mobile POS and payments, will readily move the adoption meter to include Tier 2 and 3 stores. Don't be surprised if you see signs at the mall this Fall featuring mobile payments during our first 'Mobile Christmas.' It is prime time to be in the retail POS industry!

Merchant service providers or resellers need to provide case studies or paint the picture how employee costs may be cut by improved SPEED of order processing and checkout combined with the opportunity to "up-sell customers." I see mobile POS being used to accomplish both by extending the reach and capacity for order-taking and checkout.

In restaurants, mobile POS enables a server to add an order in seconds without duplication, delay or increased chance of errors. The time freed up for servers will enable ample time for up-selling and providing better service, thus consumers will be more satisfied and more likely to return sooner and more often. At a busy night at the bar, a "line-busting" mobile order capability could increase orders by 15-30% or more. Bottom line is adding Mobile POS technology can cut employee costs and enhance service and sales.

Merchants can effectively market these solutions by tying to loyalty and 'Offers tied to enrollment.' Smartphones and tablets are everywhere now and "Cool, Convenient and Savings" is the way to sell. The new mobile channel will move to eventually tie all campaigns under one coherent marketing umbrella. Loyalty programs tied to paper or plastic have long restricted the adoption rates of consumers. Who wants to carry around a card for every store they frequent? Merchants may empower their customers to "Go Mobile and Earn Special Rewards." Once customers are on a Mobile POS or Mobile Wallet platforms, merchants are enabled to extend personalized offers based upon past order history or proximity offers using GPS and coherently tie to all other marketing channels.




About Mobile Wallet Media
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, marketing, loyalty commerce, security, prepaid, virtual currency, daily deals and the convergence of them all with social and local. The Chief Editor, Randy Smith, was the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Award Winner.

A Square Peg in a Round Hole! Is Pay With Square Scalable?

By Randy Smith,
Mobile Wallet Media
Friday, August 24th, 2012


I love the Starbucks Card Mobile App. It is fast, simple, convenient, fun and rewarding. However, 'Pay with Square' may have a tough time scaling as fast as other Mobile Wallets, like Google, MCX and ISIS, if they fail to simplify integration at POS.

The Pay with Square Video showcases a long overdue and brilliant customer service feature, making it much easier for hospitality employees to provide 5-Star service. I spent several years in the 80's and 90's working in guest services for luxury hotels and in the restaurant industry. Therefore, I understand very much about high-end customer service in the hospitality industry. Pay with Square is great, but it may prove difficult to get their software installed quickly unto POS systems.

Pay With Square will require custom software to be loaded onto 'Locked-Down POS Terminals' and PC's or tablets, which may or may not be unlocked. Locked means the system is 'locked-down' and access to load new software is often controlled by POS Dealers, POS Network Security Firms or POS Providers themselves. Unlocked systems are open and able to download new software without working with the dealer or POS provider. Either way, the fixed systems do not like new software on their platform, much like our bodies do not like viruses or cancer.

Systems are locked down to prevent hackers or viruses from infiltrating the POS software, stealing data and corrupting the system. A 'Secure Network' is set up by merchants to protect the communications between mobile POS and fixed POS systems, as well as the back office, central network or payment processor.

Most 'Fully Integrated Systems' are locked down and many ‘Stand Alone’ PC's are also locked down. POS tablets are less likely to be locked down, unless they are issued by a POS Dealer or POS security firm to better secure the devices.

So Starbucks, Square and all merchants running their stores on Locked-Down, Fully Integrated Systems, will have potentially huge integration challenges or equipment costs to add Pay with Square. For a merchants to accept Pay with Square the merchant has the choice of using Square Register via an ipad or integrate with the merchant's current POS system.

If a merchant wants install Pay with Square on their Locked-Down, Fully-Integrated System, they will have to coordinate the unlocking of the system. Now this would get you Pay with Square, but this would be a stand alone system. Yes, this can be done, but this does not make sense as the customer or the cashier would have need to manually enter the amount due. This leaves too room for mistakes by cashier or customer and a process of closing out the transactions with their current POS system would need to be established as well. This makes no sense to do this unless they were just showcasing a proof of concept. Since Square needs a highly scalable system, this is not the solution.

However, it might make more sense if Square separates out the 'ID recogniztion' from the actual payment authorization. Or if they could authorize transactions separately from the existing POS and then merge the transaction data back in real-time ito balance and reconcile the cash register ledger.

The most likely solution for Square is to integrate fully with POS systems, like TabbedOut, Paydiant or MocaPay have already done. They would start with the system(s) Starbucks is using and try and integrate with the top 10 systems by early next year. This too, is not a straight forward process, as connecting to each POS system is a very different process.  There is another, more scalable way to do this, but I'm not at liberty to discuss publicly, as it could potentially reveal MobilePayUSA trade secrets.

Other than integrating to dozens of POS Systems, I don't see how Square will scale quickly with installing Pay with Square. This could be a very viable route if they have enough people assigned to integration. Within 3-months they could accomplish integrations, then run 3-months private pilots and be ready by Q2 of 2013 for launch of Public Beta. Many merchants have older POS systems, which they very likely would be required to replace or upgrade if they wanted to accept Pay With Square or several other mobile payments solutions. Maybe I'm wrong about all of this and Square has some unique integration method up their sleeve? But it does appear Square will still have to work within the limits of known integration methodology.

So one may ask, "Will this not lead to merchants switching over to Square Register and tablets?" Yes and no. This is a function of size and complexity of their store ordering system and size of their chain.

The larger the retail chain, the less likely they will want to swap out their current system to Square Register. It will be really hard to convince major retailers to change out their entire systems just to accept Pay with Square! We've already seen that most major merchants dragged their feet to pay for terminals with NFC. POS registers cost up to $3500 each, the POS software they run is most likely already works great and is secure.

Retailers would only want to adopt Square if they had simple ordering needs at POS, like a coffee or sandwich shop, and they were unhappy enough with their current system. It makes complete sense for new merchants with simple software needs, as the cost to get up and running with ipads and Square Register is as much as $3,000 less per register. By the way I do think Square Register has a huge potential merchant base, merchant's with fairly simple software needs, but it will have a tough time convincing 'Top Tier Retailers' to rely on Square as the platform to run their stores.

Unless a merchant is committed to being an innovator, like Starbucks, Square will truly a 'Square Peg in a Round Hole' and is not likely as scalable as NFC or QR code generation and scan like Starbucks Card Mobile. If Square sticks to Starbucks Card Mobile model and ditches or keeps their very cool, customer service tool separate from payment, they may scale at a pace equal to many current competitors.




About Mobile Wallet Media
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, marketing, loyalty commerce, security, prepaid, virtual currency, daily deals and the convergence of them all with social and local. The Chief Editor, Randy Smith, was the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Award Winner.