Overall Winner – Visa with V.me and EMV Leadership.
Best of Show – TazTag with NFC Tablet
Worst of Show – Antennae Hanging out of Your Phone
Special Congratulations to my Friends at Point International!
First Up Visa’s V.me – It’s Easy, Open, and Free; So Far
When Google announced with their wallet they used words like “free” and “open” on a stage with people I know would have a tough time with those words. With the Visa V.me solution, if they can keep it as simple, open, and free as they say and as it is in beta then they will win this wallet war. I had my developers join the beta and test it out, within hours the feedback was:
“WOW this is easy”, “This can offload a lot of PCI requirements”, “What about all those integrators and gateways? If Visa uses this to accept any card and puts any card in their wallet for free and makes it open as this beta is then I know a hundred start-ups that will allow a bit of a logo for free and open”,”They are going to process MasterCard and other scheme transactions?”
What Visa does by offloading the transaction to their gateway and routing the settlement back to the merchant’s acquirer negates the need for a number of eCommerce gateways, at least from the initial looks of it. There are allot of very important value add services a gateway offers beyond just transaction routing such as reporting, third-party processing connections like non-scheme payments, check processing, gift, loyalty, etc. so I’m not saying they will kill the gateway business but for simple standard debit and credit this will kill some of the revenue a gateways sees from these types of transactions.
Thinking from a merchant’s perspective; Regardless of what Authorize.net offers me when faced with the proposition of no gateway fee and offloading of PCI at no cost. I know which way I would go.
If (there are still quite a few “ifs”) they work with all processors and their wallet is as open, meaning as a developer or integrator we would be allowed to create and add our own or our clients cards and tokens to the wallet and have that route back to us as an issuer processor then hooray! They have increased my capability a million fold for distribution. If it is strictly going to be scheme then they have reduced it to a thousand fold, and if they restrict it (by creating exceptional certification and branding hurdles) then they only increase my capability by tenfold. Like I said there is allot of “ifs” but at the outset my hopes are very high that what they said in private conversations about where they are going with this come true.
When Google announce “free and open” it originally scared a lot of people in the industry thinking that their dreams of creating competitive wallets and integrations were dead. What I heard at their announcement was “don’t worry we have it all taken care of, we will proliferate the wallet and the integration at the merchant and we will make this available to developers to integrate with and use because we idealistically believe that our offering will advance the industry as a whole not just for a few” Then came the realization that that’s not a bad approach and we can all focus on building better programs for our clients, better solutions that make couponing more ubiquitous, loyalty shared, ticketing a breeze, etc. But then the solution really hit the street and for some there was a sigh of relief and for others a letdown of hopes.
Now with V.me again hopes and fears are raised and we will just have to wait and see what actually gets delivered. I must say though we (Merchant360) have done hundreds of host integrations for transaction processing and never has it been so simplified.
EMV Around the World – Driven by The Desire to Increase Acceptance
While the announcements pre-date Cartes my understanding of the significance was gained there. Visa sees an increase in acceptance because of chip (contact and contactless cards and NFC phones) with a reduction in use of magnetic swipe cards. Without getting into the details of the numbers this means increase in transactions at higher average transaction and decrease in infrastructure requirement with decrease in fraud. Allot said in one sentence but I now see it.
The biggest issue on my mind that I needed to get an answer to going into meetings there was what it means “PIN not required”. For as long as this industry has been around (20 plus years) the schemes have been pushing higher and broader levels of stricter rules allowing the manufacturers and suppliers to create bigger entry barriers. Then came PCI where the rules were all laid out in black and white for everyone to adopt and challenge the industry suppliers. Then a few years ago the Secure POS Vendor Alliance was hatched working to making the bar higher and harder to reach again with the goal of making barriers. Now as I hear and see it Visa is breaking down the barriers. There has been outrage in the industry with people shouting, why, and how; but I now understand and believe this is one of the most significant changes in our industry since PCI.
The short of it is that there are actuaries (risk analyzer) whom have built models around increase in chip, reduction in mag swipe, increase in capability to determine authenticity through other means than PIN that will drive increase in acceptance points. All this equates to more money transacted easier with less infrastructure requirements, costs and faster time to market. To that I say let’s go!
Best of Show – TazTag – NFC Tablet in Production and with Sales
I’ve known these guys for 3 years now and they started out to create a handheld NFC OEM device with touch screen. The solution has evolved from a prototype of electronic guts to a product that was too expensive for what it was to now a full blown android table with NFC and the means to add new and replace old Point of Interaction devices. Since their model is to sell through integrators this makes it even more attractive for me. They have been selling the solution for only a few months now and have individual orders topping 2,500 for a single distribution. This is very significant numbers in the NFC space.
We (at Merchant360) have been actively working with several tablet solutions with NFC or with connectivity to NFC devices. We built a solution for a tablet and bluetooth RFID reader that tracks trash can pickups for a client recently. We are currently working with another loyalty solution provider at evaluating several tablet solutions (I touched and played with three others solutions at Cartes this year) to support retail counter top and aisle interaction points. The new solution from TazTag looks to have taken the lead as the right fit solution. I’ll be posting more on this as we integrate it.
Worst of Show – Antennae Hanging From My Phone
In a word it’s “Frankenstein” I do apologize to all those I offend with this comment but this is the feedback I get. I’ve had this solution for going on three years now in my lab and have carried around to a few issuer bank meetings and the feedback I get is this is not a solution they can endorse given how it looks and the difficulty attachment. I sat with 3 of the 4 manufacturers who now have this solution and they talked about how easy it is to install and the world that it opens up. I can agree with the world opening statement but easy is relative. I have a slew of phones (Nexus S’s, iPhone 3 and 4, blackberry, Nokia, htc,..) and while for me opening it up sometimes removing the battery and slipping this solution onto the SIM is not hard I would not call it easy by any stretch. Some SIMs are slide in out, some are pinched, and their holders were not designed with tolerances for having a slipped in (no matter how thin) solution. Then comes the antenna – anyone in the industry knows that tuning is what makes the difference between decent and really bad connectivity. With something flexible you can hang outside the phone or pinch it over the battery and folded wrong till it breaks I just don’t see the average person putting this on their phone. We talked about people brining in their phones to stores, buying the solution and having the clerks trained to do it right but still there is this black wiry thing hanging out of my phone. Again I love NFC and am a big fan of anything that helps us get more adoption and acceptance but I’m not seeing my issuer customers buying this for their members and consumers buying this on their own.
In Closing
All in all another great year! A few new clients and partners and great reconnecting with lots of old friends. Although not part of the show a great big congratulations to my friends at Point International for what looks to be the biggest acquisition in our industry thus far. Good show and thanks for the beers!
