PayPal and Samsung have announced a collaboration that will make Samsung Galaxy S5 users the first to be able to login and shop at any merchant that accepts PayPal on mobile and in-stores with only their fingerprint.
The new biometric feature will mean that Galaxy S5 users will no longer need to remember passwords or login details, PayPal will be the first payments company to support Samsung’s mobile fingerprint authentication technology.
“We spearheaded the Fast IDentity Online Alliance last year and predicted that the industry would soon move beyond passwords, and this announcement brings us one step closer to that reality,” said Hill Ferguson, Chief Product Officer for PayPal. “By working with Samsung to leverage fingerprint authentication technology on their new Galaxy S5, we are able to demonstrate that consumers don’t need to face a trade-off between security and convenience. With a simple swipe of a finger, consumers can still securely log into their PayPal account to shop and pay with the convenience that mobile devices afford.”
“We are very excited about our relationship with PayPal as it will bring one of the most trusted online payment solutions in the world to the broader mobile market,” said Hankil Yoon, Senior Vice President of Mobile Product Strategy. “Together with PayPal, we expect to provide our customers with a seamless and secure experience in online shopping and payments on our new Samsung Galaxy S5.”
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For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing Please visit Alto Global Processing
Despite the fact that the Target breach was purely a problem at the physical point of sale, results of a new poll found consumers still are more worried about online and mobile transactions. According to an Associated Press – GfK poll conducted in January after the Target breach was extensively reported, less than half of consumers are very worried about their personal data when shopping in stores while 58 percent have “deep concerns” when spending online and 62 percent when using a mobile device to make purchases.
Their concerns seem to stop, however, when it comes to taking action to protect themselves. Only around one third of those polled said they have used cash instead of plastic after learning of the breach and only 4 out of 10 have checked their credit report since the news broke.
“There have been worries that shoppers would dramatically change their habits since December when Target announced the breach that could wind up being the largest in U.S. history,” the AP said in a report on the poll results. But the numbers indicate that U.S. consumers have come to expect breaches and are not panicking at the news. Only 31 percent bothered to change their password at online retailers’ Websites, 29 percent requested a new credit or debit card and 18 percent signed up for a credit-monitoring service.
As part of this launch, for the first time both SunTrust clients and the general public can now pay bills or load prepaid cards via Western Union services, or send money to more than 495,000 Western Union Agent locations in 200 countries and territories from all SunTrust bank locations.
“Western Union is adding more choices and convenience for consumers around the world. These new launches with SunTrust are examples of how we’re accomplishing this with money transfer and bill payments in the U.S. and leveraging the strengths of our global brand and network,” said Carter Hunt, senior vice president and general manager, U.S.,Western Union.
“Western Union was a natural choice for collaboration as it gives us more options to serve our communities,”said Beverly Ladley, Consumer Products and Lending Executive at SunTrust Bank. “These additional offerings will allow us to fulfill on our purpose of lighting the way to financial well-being for more families. This is especially important in the New Year as we pay off our holiday expenses and look to find additional ways to successfully manage our finances.”
While the value of Bitcoin has taken a hit recently as a result of action by the Chinese government to restrict its use, gamers who use the virtual-currency got a boost on Friday when it was revealed that Zynga would begin piloting Bitcoin payments. The online game developer said in a Reddit post that it is partnering with virtual currency processor BitPay to make Bitcoin payments available for some of its most popular games.
“In response to Bitcoin’s rise in popularity around the world, Zynga, with help from BitPay, is testing expanded payment options for players to make in-game purchases using Bitcoin,” the game publisher wrote in its post. “The Bitcoin test is only available to Zynga.com players playing FarmVille 2, CastleVille, ChefVille, CoasterVille, Hidden Chronicles, Hidden Shadows and CityVille.”
In BitPay, Zynga has partnered with a growing virtual-currency processor that reported its busiest month ever in November.
The three biggest U.S. payment card networks on Tuesday together proposed the framework for a new standard for online and mobile purchases they said will more effectively protect consumers and businesses from fraud. The fierce competitors said they are responding to increasing consumer demand to protect digital purchases, which make up a growing portion of retail sales.
The agreement is not a full-fledged solution, but signals a willingness of the networks and their issuers to work with merchants, acquirers and processors on a standard for widespread “tokenization” of payment information. Many processors have been substituting tokens for actual consumer card account numbers during transactions for some time so that fewer parties have to store payment account details.
The new standard would draw on technology already in place, but the networks said their cooperation and ability to bring all players in the payments ecosystem together would ensure broad acceptance of tokens, enable all participants in the value chain to route and pass through tokens, spur innovation in the digital wallet and mobile app space and improve cardholder security.
“By working together to form a common global standard for online and mobile shopping, we will be able to provide enhanced security, interoperability and consistency for all participants within the digital payments ecosystem,” said Mike Matan, head of Global Network Business for American Express. “In addition, we will be able to drive the rapid adoption and expansion of digital payments, delivering innovative new products and services that will allow consumers to realize the full potential of digital commerce in today’s world.”
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Visa has announced a series of enhancements to Visa’s Advanced Authorization (VAA) technology that significantly improve the ability of its global processing network to detect potential electronic payments fraud.
Financial institutions can use the information to more reliably know which transactions to decline in real time, potentially reducing fraud by billions per year, while more confidently approving legitimate transactions to remove friction from payments for merchants and consumers alike.
“Cardholders, merchants and issuers all want to have confidence in the convenience and the security of every Visa transaction,” said Mark Nelsen, Head of Risk and Authentication Products, Visa Inc. “The great improvements we’ve made in Advanced Authorization this year were designed to do just that: fight fraud and its costs to financial institutions and merchants, while also ensuring legitimate transactions are handled with the speed and convenience that consumers and merchants want.”
Visa has increased the breadth of each account profile in the Advanced Authorization model by adding more transactional history data, along with additional neural networks to analyze that data. The account profile is a major component of the risk score assigned to a given transaction and provided to the issuer for them to make an authorization decision. The result is more robust performance and improvement of as much as 130% in detecting fraud in debit transactions and 175% for credit transactions.
The enhanced model includes additional risk indicators specific to Automated Fuel Dispensers (AFD) transactions. Visa’s network now can pinpoint suspicious activity at a gas station and apply that to all transactions processed through that station. The model also uses account velocity at AFDs compared to that account’s normal behaviour in the score determination. This can potentially increase the effectiveness of fraud detection in this segment by as much as 266% for debit transactions and 163% in credit.
The VAA improvements offer the potential to substantially reduce fraud in both transactions where the physical Visa card is present, such as a retail store, as well as in “card not present” environments such as online shopping. The improvements are effective for both consumer and commercial accounts and transactions.
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By Ben Carsley, Managing Editor (@BC_PYMNTS)
Welcome to PYMNTS.com’s 2013 CEO Series: a quick and concise glimpse into the minds of the leaders of the payments industry and how they view innovation, change and growth. We’ll ask each top exec the same six questions about the payments industry to gauge who they view as innovation experts and why they feel their company stands out. What advice do these leaders have to offer to those looking to survive in a complex and dynamic industry? On PYMNTS.com, you can find out.
In this installment, we speak with Ken Paull, CEO of ROAM, to learn his thoughts on payments innovation, how the industry is changing and more. What does Paull believe many players forget when trying to innovate in payments, and what does he say payments’ past tells us about its present and future? Find out below.
How would you define your company’s approach to innovation?
It’s a collaborative effort between our own vision of where we see this industry going and the demands coming from our customers and partners. We put a lot of pressure and responsibility on ourselves to be visionaries in this space, as evidenced by delivering the first encrypted card reader to the market and some of the more recent innovations we’ve worked on with customers, such as the integration of payments into a broader mobile experience. You learn so much more and shape such a stronger vision by engaging your customers in this process and jointly leveraging each other’s ideas.
What is the most innovative thing that you have introduced into the market – and what did it deliver to the stakeholder group that was its target?
I’d have to say the most innovative thing we’ve done is architecting our entire platform in a way that’s not only fully brandable and customizable, but also flexible enough so that it can be unbundled into separate offerings. Taking that approach has allowed many major players out in the market to leverage our platform to not only compete with the likes of Square and the other players in the market, but actually break out more value-added solutions and do it with ease and agility. We’ve given other players in the market a huge competitive advantage by providing an affordable way for them to get to market with a mobile commerce solution of their own.
Where do you look for innovative ideas and why?
I already spoke about how important our customers are to our innovation process, but in our goal to become a best of breed provider, we acknowledge that we can’t always develop everything in-house ourselves, especially not in such a rapidly growing segment. So, we also look to key partners for their input and expertise. By integrating some of our partners’ solutions into our platform, those partners become another source of innovation. We’re always surveying the market for other businesses that are providing new and innovative mobile development tools and software modules that might bring value to our customer base.
What do you think that most people underestimate about innovating in payments?
Many companies don’t look backwards and learn enough about where the payments industry has been and how it has evolved. Even though mobile is a new frontier, the mobile payments space is following a lot of the same trajectory that physical payments and eCommerce went through. For example, if you look at a physical countertop device, at first it only accepted credit cards, next it was debit cards, then it was prepaid cards, gift cards, loyalty cards, etc. That’s in essence what we see happening in our industry. Now the software and value-added applications are really streaming in to surround the existing hardware capabilities for mobile card acceptance. I think people underestimate how much innovation has already taken place in the industry and how much of the groundwork has already been laid for the new players entering this space.
What person or company do you think “gets” innovation and why – and, conversely, who or what has missed it and why?
That is a very difficult question. In terms of mobile payments, we are probably working in some form or fashion with a majority of the industry players, so it’s difficult in two respects. The first is that many of them ask us not to disclose information about our relationship, as is the nature of being a “behind the brand” technology platform. The second is that there are just too many people we could offend by excluding. Being an Ingenico company, we obviously have a bias in this respect because we certainly think Ingenico “gets” innovation. By investing in ROAM and building out a mobility line of business, they have the vision to understand how key mobile is to the transformation of this industry and how important it is to their future. On the contrary, we have seen many of Ingenico’s competitors put a less persistent effort into this market during a time that is a very critical inflection point in our industry.
What advice would you give a young innovator in this space and why would you tell her to heed it?
Never lose sight of the wants and needs of your customer (or in the case of a distribution channel environment – your customer’s customer). And don’t be afraid to reach out to your customers and to the market to share ideas and gain other people’s input. This is a complicated ecosystem that we operate in and to develop and bring products out to the market in a silo is a risky venture.
Ken Paull, CEO of ROAM
Ken has over 20 years in senior management roles in the electronic payments industry including senior vice president at RBS Lynk (now WorldPay), vice president at Triton Systems and general manager at VeriFone. He was responsible for building and rapidly growing what is now WorldPay’s national account payments division while also directing the turnaround of what had been a declining ATM processing business. While at Triton, the company surpassed NCR as the second largest domestic ATM supplier and also became the global leader in retail ATM deployments. At VeriFone, Ken built their major account, retail division which has become one of the largest segments of their business. Most recently, Ken has held positions of board director at Access to Money, director at Market Platform Dynamics and president of Pax. A native of the Boston area, Ken holds a B.S. in Marketing and Communications from Babson College, as well as an MBA in Telecommunications Management from Golden Gate University.
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Amazon is moving to close the gap between mobile apps and online commerce by letting developers make money from selling goods in their apps for tablets and smartphones. Mobile developers can now generate revenue by selling physical and digital products listed on Amazon through their apps for a 6% commission as part of a new API launched by the e-commerce giant. Already offering this service on the web, Amazon is moving to capitalise on the consumer shift toward mobile shopping and encourage more developers to build apps for its range of Kindle devices.
“Developers now have the ability to create an even deeper connection between their app and the products customers value and purchase through Amazon.com,” says Amazon Appstore VP Mike George. “Imagine a developer of a nutrition and fitness app can now offer their customers the ability to purchase vitamins, supplements and fitness gear within the app, directly from Amazon.com. It offers the customer a more relevant experience and provides the developer with a new source of revenue.”
Mobile Commerce Boom
Amazon is touting the API as a new way for developers to make money, alongside mobile adverising and using freemium models. But it’s mainly a way for Amazon to make money. Amazon built this retail empire on the web, but the growth of mobile is having a huge impact on its business, with mobile shoppers expected to spend a cumulative USD37.44bn this year in the US alone and it has been forced to adapt, fast. The company was quick to pick up on this shift in consumer behaviour and its mobile shopping app is the second most-used e-commerce app in the US behind eBay’s. It picks up 12.2m unique visitors per month, with visitors spending an average of 18 minutes on the app, but is now moving to harness more e-commerce referrals from third party apps.
Developers Are Key
Everyone knows why Amazon sells its devices so cheaply. It wants people to buy things on them. The firm sells its hardware at cost-price because it wants its tablets and e-readers to act as personalized shopping portals where consumers can download apps and shop for goods, films, books and games.
To get good content, however, it needs good developers and that’s why the firm is launching this new API. To make its ecosystem more appealing to developers. The global app market is set to be worth USD27bn this year, as the number of consumers adopting and spending money on smartphones and tablets continues to rise, and Amazon is looking to increase its share of those sales.
So is Amazon’s strategy working? It’s starting to. Amazon is set to generate USD4.5bn from the sale of its Kindle e-readers and tablets this year, up more than a quarter compared to last year. Crucially for Amazon, however, Kindle-related content revenue is set to surpass hardware next year, generating USD5.7bn, up from USD3.8bn this year.
However, Amazon’s strategy is costing it in the short term as it invests for the future. The firm slumped to a loss of USD7m in Q2 as heavy investment in distribution centres, hardware and content deals ate into its bottom line.
Transactions in China through third-party payment systems, which include online payment companies, topped $1.13 billion in value in the first half of 2013, according to a report by CCID Consulting. The report identified China UnionPay Merchant Services, which processed 46.3 percent of that total, as the market leader with Alipay (17.8 percent) and China Payment and Remittance Service (6.2 percent) rounding out the top three.
Online payment and bank point-of-sale businesses accounted for more than 97 percent of all third-party transactions in the country for the six-month period ending June 30. The $1.13 billion value of third-party transactions in the first half of 2013 represents 66 percent of the value of all transactions in the entire year of 2012.
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