October 24th, 2013 by Elma Jane
Reflecting recent research that concludes mobile payment adoption remains low, Total System Services Inc. (TSYS) issued results from a survey that confirm consumers prefer banking applications other than payments for their mobile devices.
While reinforcing the dominance of debit and credit cards as payment mechanisms, the TSYS 2013 Consumer Payment Choice Study revealed that mobile devices are used as a tool for ancillary financial services, such as checking account balances and accessing discounts and rewards.
“For now, the hype largely remains hope for mobile from a payments standpoint,” the survey said. “On a relative basis, consumers would overwhelmingly prefer to have the ability to use their smartphone to monitor transaction activity or prevent fraud versus using their mobile phone as a form factor in a transaction.”
Columbus, Georgia-based processor TSYS found in its third annual survey that, out of 1,000 consumers surveyed online in the summer of 2013, 40 percent of respondents were interested in using mobile devices to instantly stop illegitimate transactions. Additionally, 37 percent indicated that the ability to view in real-time the transactions made with debit and credit cards was also an important feature.
Receiving instant offers and promotions from stores being visited (33 percent); temporarily blocking and unblocking purchases using certain bankcards (29 percent); and paying for purchases using reward/loyalty points (28 percent) rounded out the top payment-related uses for smartphones.
At the bottom of the scale was to pay for purchases with mobile wallets (25 percent) and to use credit or debit card-funded prepaid accounts for the same purpose (22 percent). “Industry observers regard mobile payments as an assumed eventuality,” TSYS stated. “Our survey results indicate that consumers are presently more interested in increased non-payment functionality on their mobile device.”
But the processor remains optimistic about the promise of mobile payments. “We believe that as the infrastructure matures and the ability to use mobile payments becomes more widespread, this trend will change,” TSYS said.
Prepaid undermarketed?
In addressing the role of prepaid cards in the payment mix, TSYS expressed surprise that prepaid cards are apparently not being marketed aggressively by financial institutions. The processor noted that major banks jumped into the prepaid card industry in 2012 to offer general-purpose reloadable (GPR) prepaid cards as checking account alternatives.
But TSYS found that just over 10 percent of survey respondents indicated they had received GPR card offers from their banks. TSYS attributed that low percentage to the fact that the survey respondents were by default credit and debit card users, while GPR cards are primarily targeted to individuals without access to credit or debit cards.
Regardless, survey respondents aged 35 and younger accounted for 64 percent of those who had received such offers. “It could be that the younger demographic on average represents a less profitable checking relationship for banks, or that banks perceive them to be more receptive to the offering,” TSYS said.
Steady goes debit and credit
Consumer payment preferences in 2013 remain relatively unchanged from previous years, according to TSYS. Debit still trumps credit as the preferred payment instrument overall, with both methods being favored by every eight of 10 survey respondents. Debit is still the clear winner when it comes to supermarket shopping and gas purchasing, while credit is preferred when dining out and shopping in department stores. But when it comes to fast food cravings, cash is still king.
On the opposite end of the spectrum, and also consistent with TSYS’ 2012 report, only 11 percent of respondents said being able to set up text message alerts for account balances and transactions was most valuable, and a mere 6 percent valued the ability to register payment cards in mobile wallets.
However, credit tops debit for online purchases, TSYS said. Further of note is that PayPal Inc.’s digital wallet service rivals debit online, with both payment methods favored by roughly one-fifth of respondents. But for small-dollar purchases, like coffee and donuts, cash remains the preferred payment vehicle, despite innovative mobile schemes offered by companies like Starbucks and Dunkin’ Donuts.
Posted in Credit card Processing, Digital Wallet Privacy, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Mail Order Telephone Order, Merchant Services Account, Mobile Payments, Smartphone Tagged with: account, adoption, applications, banking, checking, consumers, credit cards, debit, devices, discounts, financial services, form factor, general-purpose, gpr, infrastructure, low percentage, mechanisms, mobile, mobile wallets, non-payment, offers, online, payment, payment related, phone, prepaid, processor, profitable, promotions, real-time, reloadable, reward/loyalty, rewards, smartphone, transaction, tsys
October 17th, 2013 by Elma Jane
VeriFone and National Payment Card Association (NPCA) debuted a mobile payment and rewards solution that enables convenience store and petroleum retailers to provide customers with smartphone-based payment options at the pump.
Utilizing VeriFone’s Smart Fuel Controller and NPCA’s mobile payment solution, c-store and gas station operators with VeriFone payment acceptance systems can quickly implement a fixed low-cost mobile payment and rewards program built on existing infrastructure used for merchant branded debit cards.
Consumers are increasingly drawn to rewards-based fuel purchase programs and they expect to be able to use their mobile phone to complete transactions at the pump. NPCA and VeriFone are showing how easy it is for CSPs to offer mobile payment and reward options to customers that increase loyalty and sales.
VeriFone Smart Fuel solutions make it easy for CSPs to offer forecourt pump POS payment without incurring the cost of installing new dispensers. The Smart Fuel Controller combines pump and pay-point support into a single unit, simplifying installation and maintenance, and eliminating the need for third-party interface devices to integrate pay-point management with in-store POS systems.
Merchants can develop their own mobile app, or apply their brand to a mobile app supplied by NPCA, to enable customers to pay for purchases and receive loyalty incentives using their smartphones.
Consumers today would rather utilize the capabilities of their smartphones versus pulling out their wallets. Using this solution, retailers can easily and cost-effectively create mobile loyalty programs that attract and reward high-value customers – without having to replace their existing payment infrastructure.
NPCA’s debit-based payment programs provide retailers with the ability to drive customer loyalty and reduce the cost of payments. Fuel discounts are funded from interchange savings that retailers would otherwise pay to banks. Payment processing is done by NPCA using the automated clearing house (ACH) system to clear debits to cardholder checking accounts and net settle with retailers each day. The company holds five patents related to the processing and methods for ACH-based decoupled debit and mobile payments.
Come November VeriFone and NPCA mobile payments solution will be available for beta testing.
Posted in Electronic Payments, Mobile Payments, Point of Sale, Smartphone, Visa MasterCard American Express Tagged with: acceptance, ach, app, apply, cardholder, consumers, cost, debit cards, devices, infrastructure, interchange, interface, loyalty, merchant, mobile, pay-point, payment, payments, phone, POS, Processing, rewards, sales, smart, Smartphones, solution, transactions, verifone, wallets
