Mobile Payment Systems

The below article was published in @QatarToday Magazine - Feb 2012 issue.

The mobile network is evolving at a lightning speed and will thrive over coming years. Recently, introduction of mobile payment systems (MPS) has gained momentum and a greater attention from telecoms and financial institutions. Mobile phones are looked upon as an appropriate medium for supplementing existing payments and settlement procedures.

The cashless society is coming: American consumers now carry more than 750 million credit cards, while paper currency production continues to decline.

The phrase “mobile payment system” can apply to various mechanisms for initiating and accepting transactions using a mobile device.

According to Forrester Research MPS can be divided into two categories: -

• Payment systems that utilize a mobile network to initiate or authorize a transaction.

• Contactless systems that use a mobile phone in lieu of a traditional credit card.

In other words, mobile payment systems apply to: -

• How consumers pay for goods

• How merchants can process transactions.

Lets us look at some of the emerging mobile payment systems in the market that allow accepting credit card payments on mobile: -

Square

Started By – the San Francisco-based mobile technology firm is a startup from Jack Dorsey of Twitter fame.

How does this work - Square enables users to accept credit and debit purchases by swiping cards through a small dongle that plugs into their iPhone, iPad or Android audio jack. The startup has already released software for iPhone and Andriod devices.

Fees - Square charges a fee of 2.75 % on each swiped transaction, no contracts, monthly fees or hidden costs. Users who select to enter credit card numbers manually must pay 3.5 % and 15 cents per transaction. Service will only deposit up to $1,000 per week into the merchant’s account, the rest is deposited in 30 days.

GoPayment

Started By - It is a partnership between popular iPhone accessory maker Mophie and Intuit. Intuit is the company that provides business and financial management solutions and the creator of QuickBooks, Quicken and TurboTax.

How does this work - the pocket-size GoPayment reader plugs into the audio jack of any supported smart phone or tablet and supports the iOS Android and BlackBerry operating systems. Users can swipe cards or manually enter card data. GoPayment processes and authorizes payments in seconds, and funds are then immediately deposited into the merchant’s business bank account. Its 4 million QuickBooks users can sync GoPayment transactions with the most recent versions of QuickBooks for PC and Mac

Fees – Merchants who process less than $1000 a month need to pay 2.7% rate to swiped transactions and a 3.7% rate to manual transactions. A high-volume option, priced at $12.95 a month charges a 1.7 % fee on swiped transactions and 2.7% on manual entries

There are a few more payment systems like Pay Anywhere and Verifone’s PAYware Mobile, which work on a similar mechanism of attaching a card reader to your mobile.

Contactless Payment Technology called Near Field Communication (NFC) enables mobile payments by tapping your phone on the payment machine.

Google Wallet is an app that uses Near Field Communication (NFC) to make secure paments by tapping the phone on any PayPass-enabled terminal. Google Wallet being an app can store credit cards, offers, loyalty cards and gift card. Mobile phones will automatically redeem offers and earn loyalty points when a customer taps the phone on a terminal.

In the Middle East region, NFC mobile payments have already been introduced in UAE following a collaboration agreement between Etisalat, MasterCard and Research in Motion. People can pay for their purchase of cinema tickets, and in the future metro tickets, just by tapping their phone at a payment terminal. Nokia has also introduced the NFC enabled phones in UAE for the users.

As with introduction of a new technology, there are security concerns that need to be addressed prior to its commercialization. Merchants that use a personal mobile device as part of accepting payments from customers may not have direct control on the security of the environment in which the device is used. Some merchants feel this is the most convenient way of receiving payments, while some customers feel this is very insecure; any merchant can attach a customized scanning device on their mobile to collect the card info.

London 2012 Olympics will be the first global event where mobile payment systems using NFC will be on display. It could take years before many other merchants adopt this payment mechanism and customers start getting comfortable to use it. You never know next time paying at the local grocery store or buying a coffee with a smart phone may be a regular thing.

Emergence of Mocial Marketing

The below article was published in Qatar Today magazine, September 2011 issue. The article highlights innovative mobile marketing technique adopted by brands. Click on the below pics to continue reading.

"Text Version"

Emergence of Mocial Marketing

Mobile marketing has come way beyond sending the 160 character text. With the growing popularity of smart phones the scope of reaching your customer via the mobile channel has grown.

Mobile and social media are merging and this integration of social networking and mobile will change the way we reach out to our customers.

According to Silverpop, an email marketing firm, a survey revealed the following results –

More than 75 percent of the marketers polled stated that their campaigns are only somewhat “mocially” integrated or not at all integrated.

Twitter and Facebook dominate the social scene, while only four percent of respondents are currently using location-based services, such as Foursquare and Gowalla, in their marketing efforts.

  

QR (Quick Response) is one of the popular tools that has been successfully adopted by Online marketers for mocial marketing. QR codes, a decades-old technology that was first used in the supply chain and now has become a way of mobile marketing.

  

A QR code is a matrix or two-dimensional bar code readable by dedicated smart phone (camera enabled).

How do you use QR code: when you see the code on a billboard, magazine page, on the metro, etc, scan it with a smart phone that has the necessary code-reading software. The code can contain a text, image or can a redirect the person to a mobile website.

How can marketers use it – Share your campaign information that can include anything from special promotion and competitions to images. Use it on your print media to share additional info or some other message.

  

Benefit – You can always change the URL code in the QR to show different content. Unlike in print media, if there is a mistake in your marketing campaign you don’t need to reprint the content. When you hand out brochures, collection of data is almost close to impossible unless you conduct a survey later on. QR marketing is able to collect details of each access of the QR Code instantly.

QR Codes Fact Sheet (via Queaar a social communication platform): -

• Q2-2011, QR scanning traffic was rising at an astonishing rate of 9840% vs Q2 2010
• QR codes are scanned more by women (64%) than men (36%)
• 35-44 year old users have scanned the most
• 87% of users expect a coupon or deal when they scan a code
• 68% of scans are done via iPhone
• New York is the leading city in the US for QR code scanning
• The most QR codes scanned globally are in Japan

Who is using QR Codes?

Starbucks wanted to allow their customers to pay for their latte’s via mobile media. They thought it would be an old fashioned way giving them prepaid cards and then swiping them on POS machines. So they decided to develop an app for iPhone to help customer pay and top up their ‘e-card’ using their own mobile phones.

It works like this –

- punch in your Starbucks card info

- verify some details, and the iPhone app becomes the gift/e-card.

- A secure QR code is generated for the store to scan when you pay the bill.

This payment mode is now enabled over 1000 Starbucks stores in USA.

Nissan Motor Company has begun fixing QR codes on vehicle window of their 2012 Altima. The QR codes link users directly to a mobile optimized page that includes videos, features, vehicle inventory levels and more. The customer can give feedback and know more about the car they have bought.

  

Try creating your QR codes on : -

http://www.mobile-barcodes.com/

http://www.createqrcode.appspot.com/

The study of human behavior shows that incentives offered for completing a task, tend to be addictive.

An outright example for this is location based website – Foursquare. The mobile app encourages people to share their location wherever they are. The users try to check-in to locations several times to receive one of the several badges offered by the site.

  

The entire experience of achieving the “Mayor” status of a particular location gives users immense pleasure. The commercial side of this is that many retailers give their customers discounts/freebies upon achieving “Mayor” badge (or any other badge prescribed by the retailer). E.g. Dominos pizza in UK offers exclusive discount to anybody who checks into their outlet frequently and becomes the Mayor of that particular outlet.

As per a report published by ICT Qatar in 2011, on average, each household in Qatar owns 3.9 mobile phones and the country has a mobile penetration rate of 99%. About 57% of the individuals who own a mobile phone access internet via mobile. With access to high speed networks combined with usage of smart phones, makes a clear case of experimenting with Mocial Marketing in the country.

The emergence of this new marketing technique gives marketers a new channel to reach out their customers and build relationships. Customer engagement via mobile would be taken to the next level once brands are able to customize the experience.