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Mobile POS Method Standardization Problem
Retailers have delayed in adopting new hardware or software technology that enable mobile payments to take place due to the lack of mass adoption by any one technology method enabling mobile payments. Currently in the United States, the magnetic-striped card enables credit or debit card payments in the physical world by way of swiping the card through a magnetic card reader. In Europe and other countries a chip in a plastic payment card stores the payment card credentials and is inserted into or tapped upon a payment terminal to transmit the card credentials and complete or initiate a payment transaction. Payment terminals in the US and around the world have been designed and enabled to process transactions using magnetic-striped cards and/or chip card transactions.
However, no such model of invention, other than Square Wallet debuting just last week, has been displayed publicly that will allow the same functionality of enabling different types of payment methodology for mobile or digital wallets. That is, mobile or digital wallets as we know them today utilize only a single technology and do not enable the use of any mobile payment technology by way of integrating additional methods of mobile payments and tying them to a retail location.
NFC or Near Field Communication technology enables mobile payments by transmitting payment card credentials to the payment terminal to initiate a transaction. This replicates the transfer of card credentials via a magnetic striped card, card with an NFC or RFID chip or a card with a bar code. NFC requires a 2-way transmission from the phone to the payment terminal in order for the technology to work. Currently less than an estimated 5-10% of phones and payment terminals in the USA today are equipped with NFC.
There are multiple alternative methods that have been invented to enable mobile payments other than NFC such as: generating of a barcode on a mobile screen, using a phone/device to scan a digital or printed bar code at point of sale, generating a numeric code for entry into point of sale terminal or cash register and displaying of phone to cashier with information enabling the transaction to be completed. Needless to say there are other methods to enable using a phone to pay for purchases online or in the physical world.
How it Works
The Mobile Wallet POS Switch works as a form of software smart router or switch. Users first login into their mobile wallet app or web site to make payment. For the app to work, the retailers mobile payment technology of choice will have been communicated to the mobile wallet platform and the mobile wallet software platform will have integrated with the unique method of processing mobile payments as used by the retailer. The mobile app or web site may use geo-location, WIFI, search, etc. to determine location.
In summary, the unique screen displayed to initiate a mobile payment transaction from within a mobile wallet app or web site will be one created by the unique mobile payment method provider or the mobile wallet app or web site platform designer. The MPOS Switch works to enable multiple methods of mobile payment all from a mobile phone/device through a single mobile app or web site. In replacement to visual text messages appearing on the mobile screen, the appropriate text for each type of mobile payment method could also be communicated by phone audibly via the phone or employ the actual screens or technology as adopted by a given retail location.
Also, in the future, the method of mobile payment, used in conjunction with the MPOS Switch, could use any type of technology to enable mobile payment such as biometric fingerprint, voice, eye, DNA or other biometric authentication. Such biometrics may also be used as authenticating users or to replace the login process.
The mobile screens for each type of mobile payment technology could be color coded (as shown above) to provide added simplicity in understanding what type of payment method is to be used to pay at the store one is in. Depending upon the Mobile Wallet provider and the mobile payment POS enablement provider (perhaps another Mobile or Digital Wallet altogether), the user's Mobile Wallet screen using the MPOS Switch technology would either display the exact screens from the native app or provide a Universal and color-coded theme along with a logo, or not, of the mobile payment technology or mobile wallet provider.
So there could be many ways to build this, but one thing is certain, it must be agnostic to all smartphone mobile device platforms. Of course an HTML or mobile web site could be generated to work on any smartphone or tablet, but there could be other ways to accomplish the end goal.
The MPOS Switch could also work to connect to or be redirected to work through an alternative platform or the native app or HTML platform. This method does seem feasible, but it would require connecting to various API's to accomplish ubiquity. Alternatively, a single platform could be built to be connected via way of an API. This would be the "Universal and Agnostic" platform that would mirror successful API's such as Facebook Connect, Apple's App Store and Google Play. Mobile wallet platforms and players like Corfire, mFoundry, Moneto, C-SAM, Paydiant, Firethorn (Qualcomm), Sqaure, LevelUp and Google Wallet also stand a great chance to build out this Ubquititous MPOS Switch Platform or in the very least they should be connecting to it.
It also seems to me that a company such as Appcelerator, or like services might be uniquely enabled to quickly build out this "Universal Mobile Wallet Platform." PayPal, has already built unto and partnered with Appcelerator to enable in-app purchases using PayPal's platform. Also, PayPal already has the infrastructure in place with it's digital wallet, ebay and Bill Me later service. Plus, PayPal has worked hard to not adopt or commit to any one technology. Heck PayPal might already be getting ready to launch a MPOS Switch service next Spring? If they were not then perhaps now?
This idea is well beyond a conventional "Container Wallet" concept as this accounts for solving the last mile problem of retailers needing to adopt more than one method of enabling mobile payments. It also should serve to instantly increase adoption by merchants. By reducing the choice for retailers down to the one that works best for them. Retailers will be better empowered to act by being armed with the knowledge that whatever technology is adopted they will be good to go. Also the convenience provided for consumers of being able to use a single app or mobile web site will quickly scale consumer adoption.
Could Apple, Google, PayPal, MCX, ISIS or ? already be working on such a platform? Have others before this announcement filed a patent app on such technology? Well, I could be completely wrong, but I think if these companies and many more have not already started working on such, with this announcement of the MPOS Switch, they may begin work now.
Of course, there is the potential of major embarrassment for myself, as a company may already have publicly announced technology as such (beyond Starbucks). If this is the case, then count this as an endorsement or compliment to your existing or announced products and services. If you have invented and have a patent-pending or issued patent on such technology, then I may have trumped your news and this article will serve as a way to take the temperature of the demand and acceptance of such an idea. This invention, on the other hand, may have IP that trumps all. Only time will tell. I believe this is the solution to solve the standardization problem, if not perfectly at least good enough to get us all out of the mud we are stuck in. The mud being a fractured market. I firmly believe this may serve to reduce the number of wallets to 5-7, from the 30-40 or 300-400 we currently have as potential models, and be more like today with 4 card brands.
You want the rest of the story. I want to tell it through a major media source such as TechCrunch or any of the top payment news and general news media sources.
Media/partners > partners@MobileWalletMedia.com
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In the road to the ever-elusive model of ubiquity for mobile payments or wallets, this is a "Cloud-Like" solution to solve the problem which can account for any method of payment that may come to be. Whereas offering "Future Proofed" terminals may account for most of future payment methods, communicating with POS terminals and cash registers one at a time and one system at a time seems like a tougher and more cost and time consuming method than simply connecting to a single wallet platform in the cloud. I'm not saying that merchants should not adopt both QR/2D bar code scanners and NFC, for both make sense in the long haul, but in the short term this new model says that adopting only a single, successful mobile payment system is all that may be needed. In the short term this favors bar code solutions, solutions that uses a mobile phone scanner or phones equipped with NFC readers.
Just today Visa made a major announcement that about V.me. It gave us a few more clues of Visa's direction and focus, but is still a bit vague with details about rollout in America and how it will integrate with POS. It appears it is sticking with NFC, but is also appears to be staying out of the fray of the "Mobile Wallet" standardization war and sticking with a purely "Digital Wallet" strategy. This puts them in direct competition with the strategy of PayPal and Google's Digital Wallet strategy, not to mention Amex and Mastercard. This is a wise strategy in my opinion, but after this article they and ALL other wallet players may rethink their strategy. In their release they did, interestingly point out that in future, V.me "can also support QR codes, barcode scanning or other methods." But is this referring to being agnostic by means of staying out of the mobile wallet standardization issue or by means of incorporating it?
Here is a key excerpt from the TechCrunch article: “In early 2013 – not necessarily in the U.S. – you’ll see physical implementations of V.me,” says Schulz, explaining that mobile has enabled new ways to shop beyond online checkout, but may also include things like mobile shopping combined with in-store pickup, for example. V.me’s mobile payments mechanism can take advantage of NFC, more popular overseas than here, but it can also support QR codes, barcode scanning or other methods. Those initial POS rollouts may focus on the NFC support, though.
Having V.me become not just an e-commerce and m-commerce option, but also a mobile payments option, will further clutter the digital wallet landscape, now filled with a number of digital wallet and mobile wallet contenders. But that won’t always be the case, says Schulz. “Right now we’re in the proliferation stage,” she explains. “Over time, you will see a consolidation. And where will that consolidation end up? It will end up with trusted brands. It will end up with consumer-centric value propositions…And it will be about acceptance and scale.”
With Mobile POS Switch, Retailers Can Adopt Solution That Suites Them Best!
Discussing the Future
of Mobile Commerce!
