2011.37 | Using BMO Mobile Paypass

I obtained my own BMO Mastercard Mobile Paypass a week or so ago.  While it’s not the mobile wallet we have been looking for, it’s definitely a stepping stone down the right path, so I’m pleased to be an early adopter of this solution.  That and the $50 credit on my Mastercard offered by BMO for the first 1000 users made it a great option for me.

Working in retail technology as I do, and traveling as I do, I’ve had opportunity to use it a number of times.    Here is my experience so far:

1.  Activation – Getting the card activated was simple.  Card arrived in the mail, called 1-800 and I was ready to use it.  Friendly customer service rep from BMO enabled an email receipt to be sent to me on each usage.  That seemed a good practice if I happened to lose it.  If I lose it or someone takes it, I’ll be sure to know quickly as I’m rarely far from my email – though if I lose the phone, that might not be the case.

2. Physical Card – The card is just like any other small plastic loyalty card you have is attached to a keyring.  It is the same thickness as well.  Quite small.  It has an adhesive strip on the back, and attached easily to my phone, and would probably attach easily to anything.  On first placing it on my iPhone, my case wouldn’t go over it, but after re-aligning it from  landscape to a portrait on the back of the device, my iPhone case fits as before – albeit a bit snugly.  I prefer to have the card behind my opaque iPhone case so my credit card is less obvious to anyone nearby.

3. Usage – Using the Paypass is identical to using a standard Mastercard Paypass Card. Once a cashier has asked for payment and Mastercard has been requested, one waits for the NFC terminal to ask for input, and the mobile paypass is touched to the NCR reader (pinpad).  I’ve noticed that some NFC terminals work with no problem while others may require a touch in a particular location on the device.  The card being smaller may influence that – though I think the antenna in the card is the same, it may be tougher to place with the right proximity on the terminal.  I was able to easily successfully scan the card inside the case of my iPhone when I was successful, just as I can often get the normal card to work while still in my wallet.  Needless to say, the card works on its own and requires nothing from the phone.  The mobile device doesn’t have to be on or anything like that. 

4. Acceptance -There are quite a number of retailers in Canada that have contactless card readers.  I used my card in a number of places this week.  Here is my personal experience at different retailers:

Sobeys – Mississauga, ON – Mobile Paypass scanned, but NFC terminal at POS did not accept.   Terminal asked for Swipe or Dip.  I used my regular Mastercard with the Chip to finish transaction.  NFC terminal was an Ingenico i3070 unit.

Tim Horton’s – Mississauga, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt. Note that email receipt does not have list if individual items purchased, but a grand total only.  NFC terminal was a Vivotech standalone unit.

Cineplex – Mississauga, ON – Mobile Paypass scanned by NFC terminal but payment did not process.  Terminal asked for Swipe or Dip.  I used my regular Mastercard with the Chip to finish transaction.  NFC terminal was a standalone Vivotech unit.

Second Cup – St Bruno, QC – Mobile Paypass scanned by NFC terminal, but payment did not process. I used my regular Mastercard with the Chip to finish transaction.

Tim Horton’s – North Montreal, QC – Mobile Paypass scanned and NFC terminal at POS accepted. Received email receipt.  NFC terminal was standalone Vivotech unit.

Jean Coutu – North Montreal, QC – Mobile Paypass scanned by NFC terminal, but payment did not process.  I used my regular Mastercard with Chip to finish transaction.  NFC terminal was Verifone VX810

McDonalds – Mississauga, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verfione VX810

Loblaw – Mississauga, ON – Mobile Paypass scanned and NFC terminal at Self-checkout accepted.  Received email receipt.   NFC terminal was a Standalone Vivotech Unit.

Harvey’s – Toronto, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verifone VX810.

Urban Fare – Vancouver, BC – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verifone VX810.

When I have attempted to scan at terminals for purchases for over $50, the unit does not process payment, which seems correct, as the Mobile Paypass is for purchases over $50.

5. Reaction – Apparently one way to pull a cashier out of that hypnotic trance one gets into in the middle of shift is to whip our your phone and tap it on the NFC reader.  I had a bit of a startled response from every cashier that wasn’t overwhelmed with a long line.  A few of them asked me how I did it, and we had a quick exchange.

In total, I have a mixed opinion of the Mobile Paypass.

When it works, it’s a tremendously handy addition for small payments.  When I’m buying coffee for a few people I don’t have to fumble for my wallet, as I almost always have my iPhone at the ready.  It is a bit disappointing that the system response is mixed, but that is not surprising given it is the first attempt at something like this.  There are always kinks to be worked out.

Being in the industry I appreciate that there are quite a number of system issues at play here.  There are impacts around the NFC readers, the card types accepted by retailers and processors, and more.

Ideally BMO will work with the retailers to ensure that these Mobile Paypasses can be widely and easily accepted.  I for one appreciate the fact that BMO and all of these retailers are making the effort to provide a stepping stone to the mobile wallet, and I look forward to enhancements to the system.

Have any of you used a Mobile Paypass at retailers?  Let us know your experience in the comments.  I plan on using it in continued travels through Canada in the coming weeks, and will update this post.

2010.22 | Chip and Pin in the US

Retailers in Canada have been working for some time to get through the hardware and software hurdles required to get online for EMV prior to the dates liability passes from the card issuers to retailers in October 2010.  Given that EMV has been implemented in places like the UK, Mexico and many other countries, it has always seemed logical that at some point the US would embrace the same technology.  Now Wal-Mart is pushing for it in the US based on its international experience.  While there are certainly difficulties involved in getting it done, the US can’t let itself get behind the rest of the world on technologies like this.  The fact that a now international organization like Wal-Mart is trying to move this forward shows they see benefits from it. 

From my own experience it seems ridiculous that we still scribble a name on a slip of paper and expect it to be ‘security’ in today’s information age.  My own signature is completely worn off my card from use.  I am periodically asked for identification to validate my signature, but once again, how secure is this really?  A 15 year old squints at what I wrote on a slip of paper and compares it to my drivers license?  Even crazier is retailers having to keep many of these slips of paper for many weeks to maintain a paper trail in the event that someone contests a charge.  This is the digital age? 

It seems to me that some of this effort needs to fall to the card issuers, and they’ve made the effort in Canada.  It’s their system that is at risk here, and what an opportunity for the credit card companies to show some value to the retailers.  Given the sort of confrontational feeling in recent years between credit card issuers and retailers here in Canada, it is a strong move to add value to the relationship with retailers.  Working with the retailers to reduce fraud that ultimately comes out of the retailers pocket is a strong play.  While it means a short term cost, it results in a long term gain in the relationship.

2009.44 | e-Payments in Canada

The controversy around Visa debit in Canada continues.  Merchants say the new negative option process is unfair.  Visa says that the current Interac ‘monopoly’ stifles innovation.   The Retail Council of Canada says fees will go up.  

It’s hard to say who is right in this battle, but they both assume that Interac will not change itself in any way to deal with the entrance of Visa to the market, which is not likely the case.  Retailers and consumers alike can expect increasing complexity in the electronic payments area.  As a myriad of services come available, the current simplicity of debit and credit in Canada becomes increasingly complex with new players as well as the interfaces – tapping, dipping, and using debit online (which you can do now, by the way, contrary to Visa’s Mike Bradley’s comments).    It is now possible to pay with mobile numbers online as well, via Zong and Obopay.  More options will come as other posts have indicated. 

While the end game is hard to see at present, the organizations that can bring value to clients for a reasonable fee stand to gain a great deal given the size of the electronic payments market.  The challenge is that payment processors and banks hold the keys to the kingdom at present and will demand a piece of any fee charged – directly or indirectly.  This will restrict new players unless they can find a way to get around these behemoths, as consumers and retailers alike will resist additional fees without some tangible benefit.  Unless there is a real game changer, the most likely future scenario is a plethora of new players with niche solutions chipping away at the current players with small incremental gains.

2009.42 | Squareup = Squirrel Payment Plan?

Some time ago there was word that Jack Dorsey, one of the minds behind Blogger and Twitter was working on a consumer payment system for mobile phones codenamed Squirrel.  More details have surfaced (allegedly)  on his plans: (via)

  • the service will be called squareup.com.
  • it uses a hardware dongle that attaches through the headphone jack of the phone
  • signatures are used on the touchscreen for security validation

It’s a great attempt, and those involved should be lauded for trying to push the industry closer to the dream of an electronic wallet.

Here are some concerns with this sort of implementation – if it’s actually real:

  • hardware - Having one more piece of hardware to carry around is likely to push this service in the wrong direction.  It’s hard enough to remember headphones, bluetooth accessories and your phone, let alone having another 1/2 inch square piece of plastic in your pocket.
  • complexity - this implementation seems to require interaction between the consumer, the POS and their phone.  The process appears to be:  user puts dongle on phone, says they want to pay with mobile, clerk hits button for tender option, customer waits for amount to show on screen, takes time to sign his signature, hit go, clerk waits for approval and accepts.  On first blush this is clumsy and if there are multiple steps errors will be made, and consumers and clerks will get frustrated as it takes too long.  As mentioned before, payments of any sort have to be dead simple for them to be successful – particularly in front of the audience of the rest of the people in a queue.
  • signature validation - signatures cannot be seen by the clerk, and there is a potential for chargebacks as clients say they didn’t sign for it
  • EMV - there is no integration with EMV mentioned – not a problem in US – yet – but it is a problem for the rest of the world
  • security - it remains to be seen what stops others from using someone elses stolen phone to access all cards, though there are probably pins involved.  If there are pins, its one more step for consumers to pay.
  • transaction time - how long does it take for data to be shuffled back and forth – if the payment time isn’t similar to a current electronic payment, it will frustrate users and store staff.

The good news is that this system may get around the prohibitive cost issue of the electronic wallet, with mobile carriers, payment processors, and other parties crowding the payment percentage cut off the top of the payment.  If squareup is the sole organization you deal with and they work through the whole payment process, it could remove that major roadblock to the electronic wallet.  This is probably not the end product, so let’s hope they work through the items above and pave the way to the electronic wallet!

2009.25 | Mobile Wallet Foundation | Books

Mobile Wallet Foundation – Bell, Rogers and Telus have announced that they will be providing a nationwide payments solution across all their mobile networks – a sort of Interac for mobile devices in Canada via a group they are calling Enstream.

Credit must be given (pun intended) to the mobile companies for putting a slightly different spin on their services, but are they really trying anything new? This Zoompass ‘digital wallet’ solution is only a peer to peer payment solution at present. One has to put money into an account and can then pay it to other subscribers. Both peers need to have subscribed and have the software installed on their phone. There is also an NFC credit card involved – one of many many such cards in Canada.

The benefits Enstream itself touts are somewhat weak, and there are holes in the program.

  1. There are already multiple viable options for potential users of this service already. Sure it might make it simpler for novice users to use this service, but they’re not going to pay a personal debt with their mobile.
  2. Who wants another declining balance account where they can forget their money? People will be like squirrels with nuts hidden everywhere -Giftcards, Starbucks Card, Zoompass account – where does it end? Why not leave it in one place – your bank account?
  3. This solution is too complex. One has to download software to their phone (black magic to the masses), establish an account, set another login and password, keep funds in the account, make sure their bank account/credit account is linked, pay the bill, and get their peers to do the same. THEN they pay 50 cents or $0.65 for the privelege to send $20 to their pal – OR – they wait until they have $20 from their next ATM visit and give it to them. Tough choice.

It’s understandable that the mobile companies want to get in on the mobile wallet revolution, and are trying to lay the foundation for merchant payments, of course, but the only way this sort of solution is going to gain acceptance is if:

  • it can be done with current or easily upgradable and /or obtainable technology (no extra stuff – just the mobile device)
  • it is so simple to do that your mother can do it in a queue in front of 10 other people
  • the cost of completing it are the same as current electronic payments (to the consumer it seems ‘free’)
  • there is no additional billing structure, logins, accounts or other details to remember other than a simple wallet PIN
  • it works 99.5% of the time without a hitch in under 5 seconds

This organization is looking to extend the mobile footprint much like Bell tried to expand their into downloadable movies. It’s logical, but it’s not a fundamental change, a shift which is needed. Establishing a mobile wallet is a heady challenge, and a laudable one at that, but it will probably take a game changing twist to make it happen. A real twist. It’s not about the technology – the CEO of Enstream came from the Esso Paypass, program so he has seen the technology can work.

Books – It’s a great idea to install a kiosk to buy books online, or add digital bookselling. Few take it to a completely new level. It’s pushing the envelope, but if there are real benefits to clients, this may be where the payoffs lie.

2009.20 | What Mobile Wallet?

I’ve been looking at using NFC solutions for some time now, and the recent announcement that Subway is going to install a Visa PayWave contactless solution reminded me of that fact. It’s solid technology, it works well, and I personally use it a couple of times per week where I can with my MasterCard Paypass credit card.

In Canada, we have infrastructure in place with most large retailers owning or deploying contactless infrastructure in some fashion – Subway, Second Cup, Rabba, McDonald’s, Canadian Tire, Petro Canada, Tim Horton’s, Cineplex, Loblaw and more moving to contactless support every day. I love it and think it’s a tremendous solution on cards.

We’ve also had a couple of trials in Canada on using NFC as a mobile wallet, with the credit card companies, the mobile carriers the and payment terminal companies all explaining the benefits, but what’s happening to take it to the next level?

Two big things hold back NFC as the mobile wallet (in Canada at least):

1. Acceptance - For 20 years and more, Canadians have been used to three options. Cash – no problem. Debit – swipe card, use pin. Credit – swipe card, sign receipt. Now we’ve added Chip and Pin to credit and debit. That’s confusing to the uninitiated. We also have contactless NFC cards and now dual interface NFC and Chip and Pin on the same card. There is word of Visa Debit competing with Interac.

Now, customers aren’t sure if they swipe, dip, tap, sign or don’t sign, or if there is a charge to use a service. Most of them will default to what they know. They are being asked to think about too much. In this case, it seems that competition is actually a bit of a problem.

2. Device Availability- I spoke to someone from a bank today that works with new solutions and when I asked about contactless, she said she was getting a ‘4 year old phone’ to use for a contactless trial. She uses a Blackberry and I use an iPhone. We represent a large proportion of the market for a mobile wallet in early days, and we can’t get a mobile wallet for our phones. Without NFC or some other secure way to pass information, the mobile wallet is just a mockup, and the fact is that you just can’t get an NFC phone in Canada. I’ve witnessed 1 mobile transaction in Canada and I was with my very knowledgeable Vivotech contact when we did it.

Why can’t we get NFC enabled mobile devices? Unless there is something in it for the mobile carriers, why would they give us a new feature like NFC mobile wallets on our phones? They can’t make more profit from it, and I think that is the greater concern with the trials than the functionality. The system works – it just doesn’t make money for the carriers. Impact: the mobile device makers won’t put something on the phone that carriers don’t want (like: tethering, Slingbox Player, VOIP, programming long distance card numbers etc.) so consumers don’t get them without delay and strategizing by the carriers.

There has also been a problem with hitting on a standard for NFC on mobile. Nokia is done with making their own NFC phones, and they are releasing a SIM card based NFC phone. But when will that happen, and who can really drive it? It may take a third party application to drive mobile NFC, but without a large presence to lend such an enterprise the necessary consumer confidence, this will prove a challenge.

Until payments are simplified and there is a universal (or at least accepted) NFC standard or a viable alternative method of getting data from phones to consumer facing touchpoints like POS/ATM/Kiosks, I don’t see mobile wallets going anywhere.

It’s a wonderful opportunity for anyone that can crack the code.

2009.17 | Convenience | DVD Landscape | Mobile POS

Taking the Store to Customers – Convenience has ever been important to consumer facing businesses, and there are many new and different ways that these organizations are trying to make their products and services more convenient for consumers to obtain.

The primary inconvenience of purchasing food from a mobile vendor is the difficulty of knowing where they are. Kogi Korean BBQ, a taco truck in LA, lets their customers keep track of their location via Twitter – taking uncertainty out of the mix.

Starbucks is looking to place coffee vending machines across North America that leverage electronic payment – including contactless – avoiding the necessity for having coins or small bills at the ready.

Coinstar is already doing very well with Redbox DVD rental machines. They add additional convenience by providing a reloadable credit card solution – a gap filler for those who wish to rent and don’t have a credit card. This should sound familiar, as this solution is available on an NCR platform used by Readycredit. These would be well placed next to NCR SelfServ Entertainment units.

The Changing DVD Landscape – The DVD rental industry is becoming increasingly complicated, with ever changing players, formats and scenarios. While the cheap DVD rental is a boon for the consumer, there are complications, as it represents a paradigm change for studios and consumers alike. Whatever the issues, expect them to be resolved, and this business to continue its growth for the next few years at the very least.

Mobile POS – I’ve already expressed my admiration for the handheld POS units used in Apple Stores. Now it looks like they might be taking the expected step of moving from their current Windows Based platform to an iPhone based solution with the soon to be released iPhone 3.0 software which allows improved connectivity and interoperability for hardware add-ons. This is key, as swiping a card is much faster than typing in a number, and EMV will require dip card readers in many countries.

While this platform doesn’t suit every environment, look for mobile based payment systems to act as the small business POS of the future. You can already download some from the iPhone app store today.

2009.14 | Barcodes | Changing Shoppers | Cards

Barcodes Revisited – NCR pretty much wrote the book on barcodes, but they are constantly evolving, with GS1 Databar and its myriad flavours. Being able to read barcodes and interact with data from the real world with the mobile is growing easier, as my post on SnapTell and ShopSavvy explained, and 2D barcodes and Microsoft Tag technology are also driving it along. Taking it a step further, instead of pointing to something else, some barcodes can contain the content directly.

Changing Shoppers – A recent Time article talked about some changes in today’s shoppers, including their use of technology to comparison shop, the glut of stores in America, and the impact on retailers today.

Cards Technology – The plethora of plastic card products overwhelming the world cannot be ignored. Gift cards, pre-paid mobile phone cards, chip and pin cards, NFC cards, and RFID cards of all stripes are part of our changing retail landscape. There are some interesting twists on the technology that I’ve been looking at lately. There are gift card printers that allow plastic cards to be printed with different retailer logos, values, pictures and messages on them. There are new RFID cards that are ONLY activated when the user applies pressure to avoid security issues. Concerned about the ecological impact of plastic cards on the environment? New biodegradable Envirocards avoid landfills being filled with cards for millions of years.

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