Are you holding the future of the payment system? (Contd.)

PayPal Here for business

     People are adopting Mobile Payments at a fast rate. We have started using them in our mobile applications, for e-commerce and throughout the internet for making payments. We know that businesses and consumers use Mobile Payments a little differently and the companies provide slightly different services to cater those needs. Apart from the necessary features, that we saw earlier, companies have also taken couple of steps that provide them a significant edge over others. One point to be noted is most of these services are available only in US right now. Once adoption increases these companies will provide the services in other locations.

PayPal

PayPal is the kingpin in the Mobile Payments space providing solutions for both business and consumer and according to ITG it has a market share of 78%. PayPal upgraded its Consumer Mobile app and capabilities in 2013. All we need to do is download the app, sign in to the PayPal account, take a photograph and provide other security details. Once ready we will be able to see a list of stores that accept PayPal payments. We have to check in to the store, connect securely using the app, make the purchase and mention that we are making the payment through PayPal. The store will get a photo identification from our account and we will be able to make the purchase in seconds. We need not use any card, we need not type a pin, we need not even take our phone from our pocket. It will all happen automatically and we will get the invoice as well. Apart from this there are a lot of cool features in the app: We can order ahead in some stores, browse for stores that accept the payment type, switch credit cards in the PayPal account, link more cards, see all the past transactions, send money to other accounts and receive money from family and friends.

     For business, PayPal Here service provides a card reader to be used to scan any credit card and collect money. For instance, if someone opens a small retail store they can right away start using the service "PayPal Here" to accept money. PayPal, Google Wallet and Square (the top 3 in Mobile Payments) all have an exclusive app that will be used for making these payments. Now when these systems are used as Mobile Point of Sale systems few services such as the transaction fee, time taken to receive the money to our account, transfer money to another bank account, 24/7 Customer service, cost and reliability need to be considered to evaluate them. PayPal takes care of all these things and dominates the space.

The one major disadvantage is that we need a PayPal account to use it. Setting up the process, looking for stores, and getting used to the service will demand a lot of our time in the beginning and this is a major downside for PayPal. Since there is an additional step involved in setting up another player between us and our bank account many people hesitate to adapt to this. But for business this is a really good option.

Square

 

     Square launched its service around 2010 and focuses primarily on business with a market share of 18%. Like PayPal it has all the features in its mobile app. Square also helps business set up a complete point of sale system and also offers other business services like managing orders, inventories, analytics etc., Recently Square has mentioned that its payment device will accept Apple Pay.

Google Wallet

Google introduced Google Wallet in 2011 in US and from that time it has made significant improvements in its offers. The Wallet will store credit cards in the Mobile App and we will be making the transactions using Near Field Communication (NFC). All we have to do is tap the NFC enabled reader with our phone, enter the pin and our transaction is complete.

     Apart from the regular in app services that are offered, Google has more features which are excellent. Wallet lets us store loyalty cards, various redeem coupons, offers etc and use these at the time of transaction using "Single Tap" payment. Google Wallet is linked to the Google account and using this we can send and receive money from friends. Google Wallet can be used for in app purchases in NFC supported android devices. This removes the process of entering the debit or credit card details in the tiny screen, which is the primary hindrance for mobile payments adoption. Google also offers Google Wallet card which can be used as any credit or debit card. It can be used to make payments anywhere in US (where Debit Mastercard is accepted) and also collect cash from ATMs. This card provides us security against theft because if we know that our card is compromised then we can easily stop any transaction through "Lock the Card" option in the app.

     But there is one disadvantage, Google stores all our transactions. Right now the privacy policy mentions that the transaction data won't be used for any purposes but Google has the power to do it if it wants to. This is a turn off for many tech folks especially those who value privacy. Even though Google Wallet offers so many features it still has only a 4% market share and adoption is slow among Android mobile phone users.

Apply Pay

Apple Pay needs no explanation as it is new and a lot of people have already read about it. So lets focus on the key areas where it differs from other competitors.

• Apple Pay has NFC enabled in iPhone 6, 6 plus and Apple Watch. We can make payments using these devices and in the iPhone instead of a pin number we will be using the secure finger print scanner to acknowledge the transaction. This security is the best in class in the industry at this stage. 
• In the transaction process "network-level tokenisation" is used and so the details of the credit card is not shared during payment process. The bank and Apple will accept specific tokens as secure pass and will facilitate the transaction.
• The merchants don't have any information about the card details or about us.They only have the token info and the order info.
• It provides in app purchases in specific apps using the same level of security. More companies are updating their apps to integrate Apple Pay.
• Apple does not store any of the transaction details, does not capture it and does not use it for any business purposes. It will only capture the geographic location of the purchase. All of the card details resides in the phone.

     These advantages apart from regular services will help Apple bite off some market share from competitors.

      Even though all these companies offer these incredible services and offers, there are specific hurdles that prevent the adoption of Mobile payments. Some of them are the additional transaction fee involved in the process, installation of costlier NFC enabled systems by retailers, uninterrupted support for the services, introduction of middleman in the transaction process etc., Slowly as technology progress some of these hurdles will be solved and one day Mobile will replace Wallet too.