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.

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.

The 7 S's Required for Success in Mobile Payments - Week 4 - Social

By Randy Smith, Mobile Wallet Media
Monday, August 20th, 2012

Week 4 of 7-Week Series

The media focus seems to have been mostly on enabling technology, security and savings, but retailers need a 'Clear-Cut Vision' on how Mobile Wallets will drive more traffic to their stores.

Social will be a key driver of traffic.

Social networks provide the reach retailers are looking for, and one of them is a Droid (please tell me you got that joke referencing Star Wars - Episode 1 + Google's phone). Yes, I know if I have to explain it, it only makes it worse. Welcome to my world of humor. My friends still love me, despite this.


Social has no borders or boundaries and all channels connect to it and serve it. Social networks provide, other media channels, the ability to interact with their customers. Social also has unparalleled depth of data on it's users. Of course each channel each has it's own unique data analytics.

TV, radio and even websites can gather information about their customers to better know and serve them, but this data is limited. Social data is 'Organic Data.' Facebook 'Likes' pinpoint what each 'Social Surfer' is interested in. Try that with any other marketing channel. You want to communicate and allow for 2-way engagement with your ALL of your customers at once. Just post a poll, pic, video, promotion or contest on your Facebook page. Now, I don't want to leave out 'Social's Super Side-Kick' Twitter. One without the other is definitely less engaging in reaching your total audience. Nor should one ignore any of the other prominent Social Networks such as Youtube, FourSquare, Pinterest and Yelp. 

Other media channels freely and without choice promote social networks. Why? Because in the end the 'Customer is King.' If any advertising channel wants to run on all cylinders, it has no choice but to engage social with all it's heart and might. Marketers must do it with passion and purpose or quickly be exposed or ignored as not being 'with it,' or worse becoming irrelevant.

Last week I shared that a 'Heat Seeking Missile' is required to hit our target. To make this missile fly it requires social and the right kind of social. If you ever have seen the movie October Sky, you would know that launching a rocket requires a perfect mixture of fuel. This fuel must burn smoothly and not be full of 'Hot Air Pockets' or the rocket will explode in flight. So am I saying you must be a rocket scientist to carry out social? Yes, but it will require those proficient at Social Media and communication in order to conduct reliable, safe and successful social engineering.

Placing a 'Social Badge' on ones website or ad does not make one Social. Brands must be social, like nice and extroverted people. Customers may come for your product, but will return if a relationship is built. Social Media is about relationship building and adding value to your great product or service.

In a world where customers have a multitude of choices of where they may buy a product or service, they will not as often be so stingy on price or buying elsewhere if they enjoy their shopping experience. This is a key part of brand building and being profitable and via Social, you have the opportunity to take your brand and the relationship to a deeper level. You may share about what, as a brand, you care about besides your product and services; be it saving the planet, feeding starving children or funding college scholarships. But be careful to be very proactive and collaborative with customers and non-profits to achieve the right results. The last thing you want to do is have a 'Cause Marketing' program lacking in real sincerity and purpose. People will see right through this.


In order to accomplish and carry out a successful Social Media campaign companies must hire social, friendly, fun, funny, rational, realistic, intelligent, talented, mature and very creative people that understand their product and their customer. These representatives must also care about what your customers care about and they must care about the causes you partner with. There is no going backwards here! Just like there is no reverse gear in technology, such is the case with social.

Social is most assuredly moving and trending with mobile technology. Mobile of course is changing everything as well (By the way, very soon we will examine in depth how these trends parallel).  Merchants and advertisers must meet their customers where they are at and this is where social and mobile meet. If a marketing channel fails to do this, it would have been like the auto industry saying no to fuel injection or Hybrid Electric Vehicles. Social, along with mobile, are media channels that are in hyper drive and will drive growth wherever it is properly plugged into.

Speaking of 'Hyper Drives,' let's tie in social with the Mobile Wallet. Social is also one of the core suppliers of 'the gasoline' that will enable Marty and Doc's Delorean to reach 88 miles per hour. If you remember from week one, the 'Flux Capacitor' for the Mobile Wallet is the connection between mobile to POS and is what makes mobile payments possible. So if Social in the gasoline, what is the uranium to power the Flux Capacitor?

Retailers, of course, are the 'Uranium.' Without retailers participating, the mobile wallet will be stuck in neutral and really serve no purpose. But thanks to Starbucks, Dunkin Donuts, upcoming ISIS pilots and the 'new' Google Wallet, the prospects are looking good for the supply of uranium.


Social is the 'Gasoline' to drive forward mobile payments!
Retailers are the 'Uranium' that power the 'Flux Capacitor.'
Mobile Wallets provide the Flux Capacitor > POS Technology.

So, let's venture back into the 'Data Goldmine,' that the Mobile Wallet will soon be the 'Mother Load' of them all. We know that social without retail, without mobile, is a Lose-Lose-Lose proposition. And now with the addition of the mobile wallet, the data loop may be made complete, well sort of.

Up until the mobile wallet, the transaction data of customers, for all their purchases at various stores, was exclusive to networks and banks. Each retailer has exclusive SKU data and thus purchase history data, but not necessarily, if rarely ever, tied to card data. With the mobile wallet, the transaction data for all purchases is not limited to just one card brand, but will be expanded to include all payment methods; cards, ACH, gift, daily deal vouchers and virtual currency. Mobile Wallets enable customer tracking without loyalty cards. With Mobile Wallets, retailers can now track customer purchases and thus deliver personalized offers.

Also, as the wallet is paired with shopping carts, and perhaps filled with UPC codes, it could contain the entire data chain. Retailers also parse out their data archives to data aggregators in exchange for gaining even better data so as to market with more precision and better ROI. These data aggregators will also want to buy data from mobile wallets so they may complete their data chain. And last but certainly not least the product OEM's may finally be able also tie sales to individual customers, also enabling product personalized product promotions and even 'Automated Product Registration.' We'll complete this conversation in coming days or weeks in an upcoming article on data analytics and the Mobile Wallet.

So, we strayed a bi into data analytics today from the focus of Social, but that is because Social is the 'Prince of Data and Reach.' The bottom line is retailers can not afford not to embrace Social, wherever it goes. Retailers tune into, as do we all at times, WIIFM Radio: 'What's In It For Me' and tune out if the song playing on the radio is not "Show me the Customers or Money.' There is nothing wrong with this of course. Making a profit is the main goal of any business and without ample traffic coming through the doors, it will not matter if you have the best products and the coolest and most contemporary looking store in the world (well this alone could drive traffic via word of mouth - but we'll leave that to another discussion), if you have failed to build an off-ramp and display bulletin boards along the busiest digital and mobile highways and byways, your best customers will be crickets and the bill collector.



About Mobile Wallet Media
Mobile Wallet Media is a media, analyst and consulting firm focused on the future of mobile commerce. The company mission is to highlight industry innovation and provide insights and opinions that will be relevant and forward-looking. The author, Randy Smith, is the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Startup Alley Winner.

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Battle for Mobile Payments

WED 15 AUG 12 | 01:20 PM ET

Mobile Wallet Media is a media, analyst and consulting firm focused on the future of mobile commerce. The company mission is to highlight industry innovation and provide insights and opinions that will be relevant and forward-looking. The author, Randy Smith, is the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Award Winner.