E-Commerce

Alto Global Processing: DID WE JUST SEE THE FUTURE OF MOBILE PAYMENTS?

CEO, Market Platform Dynamics for http://www.pymnts.com/

Say hello to Apple Pay. It’s the new kid on the payments block and, depending on how things unfold, it could be the new Gorilla in the mobile payments ecosystem.

Here’s what it is.  When consumers get an iPhone6 or 6 Plus, they can use Apple Pay almost right away (obviously in October when it is live at merchants) as long as they have an iTunes account – and there are 800 million of those now in the world. All these 800 million consumers need to do is to enter their CVC code and they’re up and running.

Consumers can then use those Apple Pay accounts to pay at places that have NFC terminals by holding their phone near the device and holding their thumb on TouchID. (Whether this is faster than swipe remains to be seen.) Want to put another card in? Just snap a picture and Apple will do the rest—so long as it’s with one of its affiliated banks (which now includes those that control more than 80 percent of the consumer transactions in the U.S.).  Consumers can always do it the new old fashioned way and type in all the card details into Passbook.

Card info isn’t actually stored on the phone at all. Cardholder information is tokenized and stored in the secure element and never makes it onto the phone’s memory or on Apple’s servers in the cloud.  That’s a pretty big deal. Apple Pay leverages the card network’s tokenization standard, which pretty much seals the deal on how cardholder security will be done in a digital world. Between that and fingerprint ID, Apple Pay seems pretty secure. The spiffy Apple Watch that they showed also enables payments but must be paired with the phone to do it.

There are two other big deals here.

The first is that Apple Pay is also headed online, which means it is going head to head with every other digital online acceptance mark, e.g. PayPal, Visa Checkout and MasterCard PayPass.   With 800 million iTunes accounts worldwide, Apple is millions of miles ahead of all three of those guys combined. All Apple needs is for online merchants to accept it. And with all those iTunes accounts, that doesn’t seem like it will be that hard.

The second is the API. Apple is doing with its payments app what it did with Beacons and the apps store before that: creating an ecosystem that stimulates innovation and strengthens the power of its own walled garden. Allowing developers to embed Apple Pay in their apps is an efficient way for Apple Pay to get massive distribution and scale.

As great as this sounds, there are two limitations of Apple Pay right now for consumers and merchants.  And it’s that old chicken and egg issue that gets in the way of every new payments system.

At least as of today, no one has an iPhone 6 capable of working with Apple Pay. That will change on September 19th, but most people won’t be able to use Apple Pay next year because they won’t have the right phones.  Estimates say that Apple will sell roughly 180 million phones over the next 12 months worldwide and about 25 million of those are in the U.S.. Since that is where Apple Pay works today, analysts say that the addressable market for Apple Pay is 25 million when they count the number of people whose contracts are up and who are eligible to buy a new phone. Apple is, of course, hoping that enough people find the iPhone 6 cool enough that they buy it anyway, contract terms notwithstanding, which could make that number much higher.

Then consumers that do have Apple Pay can’t really use at it very many places right now. Apple says that there are 220,000 merchant locations today that accept NFC but that’s a small fraction of the 8 million plus point of sale locations in the U.S..  Apple Pay ignition depends on merchants believing in Apple and consumers believing that merchants will believe in Apple.

So that’s why what happens next will be really important to watch.

Apple clearly did not intend to innovate payments in its purest sense of the word. It preserved, yet made digital, the core tenants of the four party system that has defined the payments world for the last 60 years. It has given NFC an entirely new lease on life and all but crowned it as the technology standard for payments. As we’ve said many times, NFC needed a catalyst to ignite it and the longer that it lacked one, the more it was at risk of becoming obsolete. Apple Pay is banking on the fact that enough merchants in the U.S. will light up the NFC capabilities that come with their new EMV terminals. The promise of millions of high spending Apple Pay consumers may be that catalyst.

It appears that Apple did intend, however, to reinvent the experience of buying.  We’ve seen hints of it already as making a payment with Apple Pay in a physical store doesn’t require popping open an app to activate the card. This is just the tip of a very deep iceberg. Expect that experience on steroids as the beacon and payments ecosystems mash up, inspire innovators to spring into action to create entirely new sources of value for consumers and merchants.

The other subtle, yet potentially game changing observation I had today is how Apple chose to name its payments capability. Apple introduced us today to Apple Pay, not iPay, not iWallet. Apple wants the consumer association with Apple first and foremost. Sure, card brands and network brands are visible, but Apple Pay will make every other brand subordinate to it because that is how the consumer and the merchant will view it.

That means that the power, at least in the iOS ecosystem, is likely to accrue over time to Apple. And with 800 million registered accounts, well, it might not need that much time.  Just ask the mobile operators what happens when Apple exercises its power over an ecosystem: the balance of power shifts in a pretty dramatic way to them.

Fast forward a few years and it is quite likely that payments becomes an ecosystem defined by apps in the cloud, assembled in Passbook under the control of Apple at least for the iOS ecosystem.   Not only did we meet Apple Pay yesterday, we might also have just met one of the most powerful players in the payments ecosystem.

Let’s not get ahead of ourselves. The news is still fresh and many details are still not known and those that are must still be digested. Today, in many ways, marks the beginning of mobile payments 3.0.  The next couple of years will be something to watch now that Apple is in the game.

Source: http://www.pymnts.com/news/2014/did-we-just-see-the-future-of-mobile-payments/#.VBBj42RdX84

For More News Please Visit: http://www.pymnts.com/

For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing

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Alto Global Processing: Amazon Launches Recurring Payments for Third-Party Sellers

 

alto global processing amazon launchesAmazon this week expanded its third-party payments service to include support for recurring billing. Two hundred and forty million consumers have Amazon accounts and the company has long been seen as a sleeping giant in the e- and m-commerce world. Amazon will now enable online sellers to access those accounts for sales made using a subscription model. The Seattle-based company tested the service with several Websites including mobile phone company Ting, according to a Reuters report confirmed by Amazon.

Amazon’s hope, according to the report, is that startups like Ting, which might have trouble convincing consumers to hand over their credit-card details for automatic periodic payments, will have no such trouble when that information is already vaulted by Amazon. A Ting representative told Reuters that customers who used Amazon recurring payments spent 30 percent more than customers who did not.

Amazon is expected to expand its payment activity even further next week, when, industry observers say, the company will launch its own smartphone.

Source: http://cardnotpresent.com/news/default.aspx?id=5826

Please visit http://cardnotpresent.com/ for more payment news! For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing

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Alto Global Processing: American Express Expands OptBlue Merchant Acquirer Program

American Express has announced the expansion of OptBlue, its new merchant acquiring program that extends U.S. small merchant acceptance coverage for its cards. alto global processing amex

Amex reports there are now 10 participating acquirers in OptBlue, five of which are among the top 10 in the United States. New to the program are: First Data, EVO, Merchant e-Solutions and First American Payments Systems. The program was announced at American Express’ Financial Community meeting earlier this year with Vantiv, Global Payments, Heartland Payment Systems, Worldpay, Transfirst and JetPay as the first participants. Participating acquirers will provide a full one-stop servicing solution for American Express Card® acceptance to eligible U.S. small merchants.

OptBlue is part of American Express’ ongoing commitment to enhance the U.S. small merchant experience and is an evolution of our acquiring business,” said Ed Jay, Executive Vice President, Merchant Services – Americas, American Express.

“The program will help deliver a smart and easy solution for U.S. small merchants to enjoy the benefits of American Express Card acceptance while making it convenient for consumers to Shop Small® year round.”

With OptBlue, participating acquirers can offer U.S. small merchants the benefit of a single statement, one settlement process, and one contact for all the major card brands. Acquirers determine merchant pricing in addition to providing payment processing and servicing. OptBlue will help expand American Express’ U.S. small merchant coverage, providing consumers more payment options at local businesses. American Express continues to receive the same transactional information it does today, allowing OptBlue merchants to benefit from the valuable tools, services and marketing that the Company delivers to small merchants. OptBlue is limited to eligible U.S. small merchants that have a projected American Express charge volume of less than $1 million per year.

Source: American Express Expands OptBlue Merchant Acquirer Program.

Please visit http://www.paymentsnews.com/ for more payment news!

For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing Please visit Alto Global Processing

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Alto Global Processing: IRS DEEMS BITCOINS TAXABLE PROPERTY

Senior Analyst at PYMNTS.com
Bitcoin collecting and use just got a lot more complicated, thanks to a March 25 IRS notice classifying bitcoins as property and not currency. As such, it imposes a huge record-keeping burden on anyone who is dealing in bitcoins.

According to the IRS, general tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, the notice imposes a huge record-keeping cost on anyone dealing with bitcoins.

“Anytime you buy or sell you have an IRS record-keeping obligation,” David Evans, chairman of Global Economics Group, tells PYMNTS.com in commenting on the IRS notice. “Obviously, they are only going to enforce that selectively, but people that are heavily into this will have issues.”

The IRS decision also provides what Evans believes is a real impetus to using bitcoins only for things that are only denominated in bitcoins. If a website offers “stuff” that is only priced in bitcoins, then it would be hard to argue that there’s been appreciation, he said.

Still, the IRS created some major headaches for many bitcoin users. “It imposes huge paperwork requirements; every time you pay with an appreciated bitcoin, you face a tax liability,” he said. “And it means you have to pay your personal income tax rate of about 10 percent to 40 percent (more if state taxes apply) if you’ve held the appreciated bitcoin for a year or less.”

Most people, Evans suggested, will ignore the IRS rule, and merchants don’t have to worry about taxes if they are using a bitcoin wallet provider that pays them in real currencies. Still, this provides a strong incentive to hold on to one’s bitcoins if the belief is they will appreciate. That way, the holder is liable only for long-term capital gains instead of using them for transactions, he said.

“For people in the with paper losses, it might provide an incentive to dump them and get the tax write-off,” Evans added.

To read the full IRS notice, click here.

Source: http://www.pymnts.com/in-depth/2014/irs-deems-bitcoins-taxable-property/#.UzMlNa1dWSo

For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing Please visit Alto Global Processing

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Alto Global Processing: PayPal and Samsung enabling commerce with fingerprint authentication on Galaxy S5

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.”

Please visit http://www.paymenteye.com/ for more news

Source: http://www.paymenteye.com/2014/02/26/paypal-and-samsung-enabling-commerce-with-fingerprint-authentication-on-galaxy-s5/

For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing Please visit Alto Global Processing

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Alto Global Processing: MasterCard, Visa Propose Tokenization Standard for Digital Commerce

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.alto global processing visa mastercard

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.”

For more information on this please feel free to contact Luca Bizzotto, CEO of Alto Global Processing
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