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“I thought someone would be able to change the way people shop, but I didn’t think it would be a startup because this will happen quickly and you also need brands that people trust. And PayPal is one of them. It takes the combination of a trusted payment company and the cooperation with great brands that people trust to change how people shop. I thought I would be able to convince all the major retailers all around the world because I have had  relationships with them for 30 years,” Kingsborough said.

Even with the departure of PayPal’s president Scott Thompson, who is now Yahoo’s new CEO, PayPal hasn’t missed a beat and is executing on its vision, Kingsborough said.

Solving consumer and merchants needs Kingsborough came in and honed the in-store payment initiative, which was underway well before Kingborough arrived. He focused on appealing first to consumers and making it simple for them to grasp, before ensuring the merchants could be able to understand the value of the system. Then he went about getting the cooperation of merchants, criss-crossing the country to call upon retailers and payment infrastructure companies to get them on board. Along the way, he helped PayPal pick up necessary components like location-based service WHERE, whose CEO Walt Doyle was personally persuaded to sell by Kingsborough. The plan is now to start rolling out the payment system in the second quarter though the first U.S. trials have already begun with Home Depot.

Kingsborough said he was drawn to PayPal’s approach to payments because it was aimed at solving deep consumer and merchant needs. He said competitors who focus on near field communication and other alternative payment systems are too often preoccupied with the capabilities of their technology, but they’re not addressing the pressing needs of users.

“Competitors think they’ll solve how easy it is to pay at retail, but that’s not a consumer problem. Their problem is how do they become masters of shopping and use their money smartly and organize their efforts to shop online, in-store and on mobile,” said Kingsborough. “We have a holistic approach. We ask the consumers [what they] want to do. They want to save money, save time and feel important in stores.”

NFC: a feature, not a solution That’s partly why he thinks NFC in particular isn’t ready for prime time. He said it’s going to take a while for it to proliferate in stores and on handsets. But more fundamentally, it doesn’t make consumer’s lives better.

“Do I think NFC will work someday? Maybe. But to me, NFC is a feature, not a solution that solves problems. If your strategy is NFC today, you need a new strategy,” Kingsborough.

Google and Isis, the carrier consortium including Verizon, AT&T and T-Mobile, are pushing hard on NFC and are angling to become the go-to mobile wallet for users, who will be able to pay at point-of-sale terminals with a tap of their phone. Many of the pieces for NFC fell into place for the technology in 2011, though there are still many hurdles ahead toward a broad rollout (subscription required) and mass consumer adoption.

PayPal’s approach bypasses many of the hardware constraints of NFC and pushes a two-pronged approach to in-store payments. Users can either use a PayPal Access card connected to their account, or more intriguingly, enter their phone number and PIN at a POS terminal and access their PayPal account. PayPal takes a user’s identification and turns it into a token, which is authenticated in the cloud, so no actual credit card numbers or financial data travels back and forth.

What it takes to win Kingsborough said the companies that win will be comprehensive and ubiquitous, allowing consumers to conduct transactions wherever they want to. By going with a software-based approach, PayPal can address about 8.2 million of the 10 million point of sale terminals with its payment system, without forcing retailers to buy new hardware. Then it’s up to PayPal to convince retailers to jump on board. It’s doing some critical work by signing deals with payment infrastructure companies like AJB Software Designs, which helps connect the point of sale terminals at many tier-one retailers to payment processors and financial institutions. Merchants that use AJB will have an easy path in enabling PayPal payments in store. PayPal is talking to other point of sale companies such as Verifone.

Merchants won’t just be getting a potentially cheaper alternative to credit cards. In PayPal’s vision, they’ll also be getting a way to push out offers to consumers, both in-store and nearby. Kingsborough said PayPal is working through its mobile app to address a variety of needs of merchants, from helping them manage online, mobile and in-store sales to improving loyalty and offering targeted discounts to users. Those additional tools will be rolled out over time in the next year or two. Google has outlined early plans to also provide coupons and offers to consumers using Google Offers in conjunction with Google Wallet.

Providing value But the other important winning determinant will be providing valuable, relevant and easy-to-use services to consumers, becoming the one mobile wallet they turn to, said Kingsborough. He said using tools like WHERE’s targeting and location technology will allow merchants to not just push out deals but deliver very context-aware content. For example, he said a clothes retailers might be able to message a nearby customer, letting them know they’ll earn $5 in their PayPal account that day if they buy jeans that they’ve purchased in the past. And, with the right permissions, the merchant may also be able to know the customer is with two friends and offer a group discount.

“It’s not just the capabilities of location-based services or understanding what a person just did; but it’s about being highly relevant to the person using the services,” Kingsborough said

He said in the battle to become the preferred digital wallet, PayPal will be the simplest for people to use, allowing people to link their credit, debit and loyalty cards, even potentially their drivers license. Just as people stick primarily to one browser, he said consumers will want to rely on primarily one wallet and he believes that PayPal will be that provider.

“Ours to lose” Kingsborough said it’s the whole offering that makes PayPal’s approach a winner. It’s a trusted name with more than 100 million users worldwide and it’s focused on providing value to both consumers and merchants with an easy path to ubiquity. “This is ours to lose,” he said. “I’m very confident about that. Otherwise, I’d be golfing right now in Hawaii.”

Whether service professionals are meeting with customers at home or sales associates are interacting with visitors at a retail location, the new Vantiv solution is part of Vantiv’s overall strategy to address customers’ growing mobile payment needs.

“Merchants and consumers are seeking greater mobility, control and timely access to data,” said Bill Weingart, Chief Product Officer, Vantiv. “We’ve teamed with Verizon to combine our payment and security expertise with Verizon’s ability to tailor development of mobile technologies to address those needs.”

The Vantiv mobile payment solution serves merchants who require mobility, convenience and security and addresses many business needs through a value-added suite of applications including accounting, payroll, workforce management, loyalty, inventory and customer relationship management (CRM). Having complete business control in a packaged, intuitive and flexible platform is a significant differentiator in the realm of tablets, and allows merchants to conduct data enriched customer interactions and transactions, anytime and anywhere.

JKrete Supply in Mason, Ohio is among the first Vantiv customers to participate in the field trial.

“This technology gives me more flexibility and makes it easier to serve my customers,” said Jay Rhoden, Owner, JKrete Supply. “Having the option of being mobile takes my business to a whole different level. I have everything I need at my fingertips. I can sell my products anywhere I go at any time. Vantiv tailored this product to meet my needs; it is clear they listened to customer demand.”

“Verizon, through our Private Application Store for Business, is leading the charge to work with innovative companies to develop industry-specific mobile solutions,” said Chandan Sharma, Vice President and Global Managing Director of Verizon’s financial services practice. “The ability to customize enterprise tablets and applications has been characterized as a potential ‘game changer,’ and we look forward to working with Vantiv and its customers to advance the playing field for mobile commerce.”

The capabilities were featured in a Tab Times article “The 10 most important tablet trends, products, and stories at CES 2012.”

For more information on Vantiv and to view more information on the Vantiv mobile payment solution visit us at www.vantiv.com .

According to the joint press release, the initial focus of the MasterCard and Intel partnership will be on MasterCard's PayPass payments hardware and Intel's Identity Protection Technology (IPT). The idea will be to make a faster, more secure transaction with a just a click or a tap of a card or smartphone through the NFC capabilities of PayPass.

There are larger currents in motion here than just creating better transactions hardware. According to MasterCard, 85% of transactions are still done in cash. The company's goal is to make a dent in that number. Even a half a percentage point change towards digital purchases could mean hundreds of millions of extra dollars flowing towards the payment processing industry. This is why MasterCard is repositioning itself not just as a payments firm, but as a technology company.

Convergence Of Tech & Payments

In 2011 there have been a multitude of partnerships made between tech and financial companies. A lot of the movement has to do with the emerging model of mobile payments, especially into the physical (not Web-based) world. The biggest one is probably the Google Wallet initiative, that has a wide group of companies in its early rolls (and more to come), including Google, Citi, MasterCard, Sprint and various NFC makers. There is also the Isis project that brings the other three carriers, AT&T, Verizon and T-Mobile to bear with NFC capabilities. Last week American Express announced a $100 million fund to help fund e-commerce projects. While mobile will be a huge focus for this convergence between tech and financial, it is not the only push.

Square is pushing itself into the mainstream with deals with Wal-Mart, the carriers and Apple while Intuit has made partnerships with both Verizon and AT&T with an eye towards pushing its GoPayment dongle and QuickBooks infrastructure at small businesses. PayPal wants to be two things at once, both a technology leader and a payments company and has been making a lot of horizontal movements in the sector as well.

This is not just about the financial industry moving towards technology, the way MasterCard is trying to do it. The technology industry is equally as fervent to moves towards payments. Jack Dorsey, one the founders of Twitter, is probably the best example of this. He saw earlier than most that mobile was changing the entire tech industry and that payments would be a huge part of that. Hence, he started Square, one of the first pillars of the bridge that is being built between the two industries.

Both Apple and Google have been making pushes into payments. Apple has hundreds of millions of credit cards on file to support its iTunes model where as Google Checkouts has been positioned to be the de facto purchasing solution for Android apps.

Facebook continues to outfit as many mobile devices with the ability to access its network, having already signed deals with numerous carriers around the world to provide free access to its networks regardless of handset. With MediaTek already working with handset vendors in India, Philippines and Indonesia, Facebook could see additional growth in these regions.

Celpay (one of the pioneers of mobile banking in Africa) provides payment solutions for multiple billers in the countries that they operate (Zambia, Zimbabwe and Tanzania) (Read here)

MTN Mobile Money recently implemented a "bulk payment" capability that allows companies to offer new payment solutions. This application is currently utilised most for the payment of salaries (Read here)

M-Sente (a mobile wallet provider in Uganda) recently announced the launch of MultiChoice payments. (MultiChoice is a regional payTV provider) (Read here)

The rate of innovation and launching new services on multiple live products in Africa is an indication of the health of the industry in emerging markets.

Brian Waring, VP of marketing and category for Starbucks in the UK, says: “There’s no doubt that mobile payments are going to be the future of shopping, but it’s not clear how it’s going to develop. We just didn’t want to wait. Ours is so simple and it enhances the whole experience for customers.”

It introduced the option in the US in early 2011 and claims 20 million payments have been made using the technology in its 6,800 US stores.UK customers will also be able to use the app in international Starbucks stores that offer the capability as it updates to give the cash balance in the local currency.

When Nokia launched its new Lumia 710 and 800 handsets in October, it was widely expected that these devices would be the first Windows Phones to support NFC. Nokia had all but confirmed this itself when, last year, it stated that all of its 2011 smartphones would include NFC support.

Keith Varty, Nokia’s head of apps and partnerships, stated: “We need to get a [Windows Phone] device into the marketplace with NFC capabilities, and when we do we can really start to showcase our services.”

So it looks like we’re still at the stage of NFC’s development where the best is yet to come, but with the pace of development finally accelerating across the industry, it appears that we won’t have too much longer to wait. How long Windows Phone users have to wait for NFC is a different matter - with the confirmation that the technology is already supported by the OS, the decision to launch devices with it on board now rests solely with the manufacturers.

In 2012, there will be more NFC-enabled Android devices. For now, only the Samsung Nexus S and a few others have mobile wallet capabilities. Lest we forget PayPal, it is important to note that it recently launched an Android app that allows for money transfer via NFC. 3. Carrier Billing Is Alive And Kicking Carrier billing allows users to pay for apps on their mobile phone bill instead of using a credit card or a third-party mobile payments service to pay at the time of purchase. This payments system is moving right along. In April, Spring joined T-Mobile and AT&T to support carrier billing in the Android Market. Mobile payments company BOKU went live for Android app developers in June. It began offering carrier billing on 230 operators in 56 countries worldwide. eBay purchased mobile payments company Zong in July, and integrated it into PayPal. Zong allows users to make mobile purchases through carrier billing. PaymentOne, another leader in carrier billing, lets users pay with their phone numbers, and validates transactions via text.

The second half of the NFC conundrum is that there are a lot of hands reaching for the supposed pile of money that NFC payments will enable. Look at Google's announcement of the Wallet product. Or the ISIS partnership between Verizon, T-Mobile and AT&T. Google is partnering with Mastercard, CitiBank, Sprint, FirstData, Verifone, VivoTech (the NFC partner), Hypercom, Ingenico and NXP (another NFC partner). All of these large companies are going to want a slice of the pie. Where does that leave the retailers? You know, the ones that are actually trying to make money with good and services? Sadly, on the outside of the circle. The carriers are the biggest culprits, wanting to take as much as 50% of transaction revenue because it is "going over their pipes." The financial services companies will be happy taking their normal rates in the 1.75% to 3% range as long as there is a promise that more people will pay electronically (read: sans cash). Between retailers, partners and infrastructure, NFC has years to go before it will be viable for all parties involved.

What will happen in this time frame? Think about the so-called "4G" technology WiMax. The technology is already becoming antiquated with LTE and all the major carriers are working on the next version after that. Sprint is keeping a hybrid of WiMax and LTE going forward but overall it is a tech that died before it even matured. NFC may be the same. What if there are massive leaps in quantum teleportation in the next several years? Does NFC become the WiMax of the payment world?

Maturation Of Direct Carrier Billing The "I do not see myself buying a fridge with this" line comes mostly from the direct carrier folks. Direct carrier billing is the perfect area for micro-payments and payments that stem from ease of use. Think of parking. If you could pay for your parking on the street with your phone, would that convenience be worth an extra couple of cents on the dollar to you? The direct to carrier ecosystem has evolved to the point where it actually makes sense for offline and online use. Zong (acquired by eBay for PayPal integration), PaymentOne and Boku are the leaders in this space. PaymentOne has processed $5 billion in mobile payments and lets users pay with their phone numbers, validating transactions via text. Zong allows that capability as well. Payment One's "One Care" features, announced last week at CTIA, makes direct to carrier billing safe and secure. Transparency is important in mobile commerce because consumers do not really trust their phones to handle their money quite yet. The most important aspect of direct to carrier billing now is that the revenue mechanism has been flipped. It used to be that merchants only got some 40% or less of payments while the carriers and partners took the rest. Even with high margin transactions, that is unacceptable. Today, direct to carrier billing provides the merchants with more than 80% of the revenue, sometimes nearly 95%.

The Dongle World: Smartphones As Credit Card Readers Square, VeriSign and Intuit are pushing hard into the dongle department. Jumio is doing the same thing, just without the dongle. There is not much to be said about the dongle world that we have not already touched on at ReadWriteWeb outside of the notion that it is bringing easy credit card readers to the mobile masses.

The dongle competitors are not worried about what is happening in the ecosytem because it does not really touch their core business. For instance, PayPal does not see NFC or dongles infringing on its business in any way, shape or form. As Laura Chambers, PayPal's head of mobile, said in a recent interview, "we are not worried about much in the ways of competition. There is a lot of white space in the industry for horizontal movement."

What Is PayPal Really Doing? In the interview with Chambers, the first question I asked was, "Why does it seem like PayPal has become a "me too" operator in mobile payments?" It is a fair question, even if Chambers balked to acknowledge that PayPal has been in "me too" mode for the last year or so. PayPal has ignored the dongle movement and NFC is not on its radar as a technology it feels it needs to integrate. "What is the difference between a tap versus a swipe?" Chambers asked. "We are working with what works in the current infrastructure ... We have sat down with consumers and merchants to work with them on what they want." PayPal is growing sideways because there is not a ton of room right now to grow vertically. PayPal will get into NFC solutions when the time is appropriate. Its strategy now is to create as much flexibility for consumers as possible through its mobile wallet program. PayPal's stance is data driven - the company can track when and what consumers buy from mobile phones and tablets. Hence, PayPal is focusing on the shopping end of the spectrum, as opposed to a pure payments play. "60% of people buy more and spend more on mobile," Chambers said. "But, we see that people are not really buying different things on mobile ... the No. 1 driver of growth in mobile payments is boredom." That fits in well with what PayPal sees as "couch commerce." They released a study recently saying that mobile shopping is going to boom this holiday season. As such, PayPal is ready to deploy an end-to-end solution for merchants and consumers to reward loyalty and provide deals and offers along with digital receipts. PayPal believes that it has a lot of room to grow in mobile through these types of horizontal movements. We are also seeing this on a non-mobile front with eBay partnering with Facebook and the Open Graph API and the new X.Commerce initiative that consolidates the PayPal, Zong, Magento, RedLaser and Milo technologies. The company is calling it an "open commerce ecosystem."

Future Of Mobile Payments This article is the first in a series of the trends in mobile payments that ReadWriteWeb will be working on in the next several months. There are a lot of questions and the answers are just beginning to emerge. Who are the winners in the space? Are retail shops in danger of "becoming expensive fronts for online shopping," as Chambers said in the interview? Does NFC really have potential to disrupt offline payments or is it just cool technology? These questions and more are what we will be tackling in the months to come.

2012 will be the year of "NFC training wheels."

NFC smartphones will outnumber deployment targets.

Carriers will deploy NFC faster than consortiums.

New Sage Mobile Payments 2.0 features:One Merchant Account — Businesses can now use their existing Sage Merchant ID (MID) account to add mobile payments to their existing payment solution, and at the same low processing rate.Updated User Interface on Smart Phones — The new, completely intuitive, colorful user interface makes processing payments easier than ever.Signature Capture — Businesses can give customers peace of mind knowing a signature is required to complete their transaction. With the swipe of a finger, a signature is captured to complete a sale. A signed receipt is emailed to both the business and their customer.Tax And Tip Calculator — Businesses no longer need a separate calculator to determine tax due and tips; Sage Mobile automatically calculates both.‘App Store’ Download — By going to the Android Marketplace or Apple’s iTunes store, businesses can download the Sage Mobile application at no cost. Then, once they have called Sage to set up their merchant account, they can start accepting mobile payments.

Businesses using Sage Mobile Payments can benefit from increased chances to close sales; anytime, anywhere transactions; a secure and PCI compliant payment processing environment; real-time authorizations for expedited cash flow; and minimal cost.Sage has been providing businesses and organizations with electronic payment systems for more than 20 years. Visit Sage Payment Solutions online at www.sagepayments.com.

Sage North America today announced the launch of Sage Mobile Payments 2.0, the latest version of its Payment Card Industry (PCI) compliant mobile payments product. Sage Mobile Payments comes bundled with a Sage merchant account, and allows businesses to cost effectively and securely process credit and debit card transactions on mobile devices, like cell phones and tablets, including Apple’s iPad, across all major wireless carriers. Version 2.0 focuses on enhancing the customer experience through new features designed to save businesses time and increase the security of their transactions.