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May 14, 2019
Contactless payment growth, rewards card revamps and machine learning are among the top six trends when it comes to retail payments this year.
While mobile payments are getting more popular, contactless cards are expected to catch a bit of fire in the U.S. this year, according to a study by e-commerce software firm SurchX.
In a blog, posted in Forbes, SurchX CTO Krishna Doddi noted that outside of the U.S. contactless payment accounts for two of five in-person Visa transactions. She also noted that as cashless takes root, retailers will experience a negative margin impact.
"The data from my company's research shows 90% of consumers expect merchants to take any credit card they choose to use. And unfortunately for merchants, the data also reveals there's no rise in customer satisfaction if merchants take their preferred card. However, if the card isn't accepted, 93% of consumers say their satisfaction goes down, and 87% say they are less likely to shop there in the future," she wrote.
Blockchain is one of the trends given its "appealing benefits," according to the post, though Doddi acknowledged it's not yet primed for large-scale adoption. She expects retailers to take a tentative approach and watch how big brand retailers tackle the payment option.
Another trend is the reward card strategy given increasing consumer use but retailers will find themselves in a bit of a quandary given higher credit card processing costs, wrote Doddi.
Also, on the top trend list are machine learning and autonomous payments, according to the blog. Doddi said machine learning will "take off," when it comes to store operations and, that due to ease of use and the benefit of greater efficiency, retailers will move toward autonomous payments.
Topics: Contactless / NFC, Loyalty Programs, Mobile Payments, POS, Retail, Trends / Statistics
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May 13, 2019
The U.S. Supreme Court, in a narrow 5-4 decision written by Justice Brett Kavanaugh, ruled that a consumer lawsuit challenging Apple Inc.'s dominance of mobile app sales for iPhone, can proceed.
The case, Apple Inc. vs Pepper, involved allegations that Apple had artificially mobilized pricing for mobile app sales for the iPhone, because the iOS app store is the only way to download apps for the device.
Apple moved to dismiss the suit, originally filed by four iPhone users, who argued that because Apple collected 30% commissions on all iPhone app downloads that it had illegally monopolized the market, according to court documents. Apple, in its court filing, argued that iPhone users could not directly sue the company based on an earlier case, Illinois Brick Co. vs. Illinois, arguing that consumers were not direct purchasers from Apple.
That case argued that the party that sets the retail price was the party that could be sued and that Apple was an intermediary. Under the current structure for iOS apps, Apple charges independent developers a $99 fee and allows them to set prices for mobile apps used on the iPhone.
"If accepted, Apple's theory would provide a roadmap for monopolistic retailers to structure transactions with manufacturers or suppliers so as to evade antitrust claims by consumers and thereby thwart effective antitrust enforcement," Kavanaugh wrote in the opinion.
The four iPhone users originally filed suit in 2011, arguing they would have been able to pay less for the apps in a competitive market than under the existing structure. Apple started selling the iPhone in 2007, and launched the App Store in 2008. The store sells about 2 million downloadable apps for iPhone users.
Kavanaugh joined the four liberal members of the court, Ruth Bader Ginsberg, Sonya Sotomayor, Stephen Breyer and Elena Kagan. Justice Neil Gorsuch wrote the dissenting opinion, joined by Samuel Alito, Clarence Thomas and Chief Justice John Roberts.
While the court did not weigh in on the merits of the specific case, legal experts say a victory from the original plaintiffs could lead to new competition for mobile app sales, and eventually impact consumer prices.
"The Apple v Pepper case means that consumers have standing to bring cases," John Bergmayer, senior counsel at Public Knowledge a Washington D.C.-based nonprofit that focuses on digital rights and open competition issues. "It’s too early to predict the effects on a particular app category, but the case could lead to more competition if the plaintiffs are successful in their underlying claim."
ACT The App Association, which represents 5,000 mobile app developers, said in a statement that it was disappointed in the ruling, which it said rewarded trial lawyers rather than developers,
"This decision and its categorization of developers as 'suppliers' or 'manufacturers' to platforms sets a troubling precedent," said Morgan Reed, president of the association. "Ten years ago getting software was quite a different and onerous process — our members count on platforms that enable customers to purchase software safely, easily and with confidence. Under this decision, only trial lawyers will benefit from the simplification of platforms as a retailer and vendor model."
A spokesperson for Apple was not immediately available for comment.
Topics: Mobile Apps, Regulatory Issues
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May 13, 2019
Mastercard has entered an agreement with Kisio Digital to integrate Mastercard payment and digital security technology with the Kisio trip planning and ticketing capabilities. The move is intended to boost contactless public transit and other forms of travel, according to a press release.
Kisio, a France-based technology company, recently joined a public-private partnership from Mastercard called City Possible, where private industry is working with local governments around the world to address smart city issues like transit, sustainability and other areas.
Plans call for a pilot program based in the Netherlands to begin where Kisio will deploy its first Mobility as a Service to test new transportation efforts.
"As passengers get ever more out of their smart devices, they also expect more from transport operators and authorities regarding digital services," Pacome Lesage, chief executive at Kisio Digital said in the announcement. "By partnering with Mastercard, we are able to deliver on these expectations in new and exciting ways, bringing to market a fully functional platform for multimodal transport apps."
"Working with over 150 cities around the world, we have improved the transit experience for residents and visitors while delivering efficiencies for operators," Miguel Gamino Jr., head of global cities at Mastercard, said in the release. "Together with Kisio and other City Possible partners we’re ready to take on the next mobility challenge, co-creating Mobility as a Service options that make tech truly work for people."
Mastercard is working with the New York Metropolitan Transit Authority to roll out new contactless ticketing conversion for the city subway and bus system.
Mastercard also holds a minority investment in Masabi, a mobile ticketing company that allows Uber customers to book buses and tickets through the ride-sharing company’s mobile app.
Topics: Card Brands, Internet of Things, Mobile Apps, Mobile Payments, Technology Providers
Companies: MasterCard
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May 13, 2019
Mazooma Inc. has launched Mazooma Gateway, a platform that provides access to the company's full suite of payments products using a single API integration, according to a press release.
Mazooma said its two main payment methods, e-Check select and OBT, will be available to i-gaming and sports betting operators in the U.S.
Company officials said the gateway will help merchants broaden their customer base, add incremental volume and increase clearing channel redundancy, using technology that has been used for 15 years to process high-volume online gaming.
"Operators in the U.S. gaming market understand the importance of offering customers a variety of payment choices, however long integration queues are a major hinderance to adding new payment methods," Dave Roe, chief product officer at Mazooma, said in the release. "The Mazooma gateway will allow merchants to significantly reduce the integration effort that would typically be expected from onboarding two distinct payment methods."
The company said its solution will be available to net new merchants or those that already offer eCheck or OBT on their websites or native apps.
Topics: Mobile Payments, Technology Providers, Transaction Processing
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The market for fintech companies has grown in recent years, as venture capital has come calling to find innovative new startups engaged in business ranging from mobile banking to point of sale financing and accelerating payments. Several startup firms in the space have recently raised additional funding to accelerate growth in some unique approaches to financial technology.
Cushion, an app that helps U.S. consumers negotiate bank and credit card fees, said it raised $2.8 million in a seed round led by Afore Capital, which was an existing, pre-seed investor.
Additional participants in the seed funding include 9Yards Capital, Flourish, Green Cow Venture Capital and Vestigo Ventures.
Cushion uses an AI-based bot to connect with banks and analyze transaction histories, identify fees and interest charges and then negotiates their removal. The funding will be used to hire additional data scientists and engineers, scale the current platform and develop new financial health-driven products, according to the company.
"Americans spend over $200 billion a year in bank fees and credit card interest," Paul Kesserwani, founder and CEO of Cushion said in a company release. "These penalties chip away at people's hard earned money and do serious damage to their finances."
Since launching in 2018, the San Francisco-based firm has helped negotiate about $1 million in bank fee refunds. About 93 percent of Cushion's customers have had bank fees in the past 90 days and about 85% have gotten some or all of the fees waived or completely removed through the bot.
Subscription collection
Gravy, an Atlanta-based startup that helps companies recover said it raised $1 million in seed funding.
The company specializes in helping subscription-based companies retain customers and recover lost credit card payments. The company said it uses a combination of custom workflow technology and human communication in an industry that is often dominated by dunning software and hardcore collection tactics.
The company, which launched in 2017, has recovered more than $15 million in single-saved transactions over the past 20 months, and expects to double its revenue and the size of its staff before the end of 2019.
"Before I started Gravy with my partner, Renee Weber, I owned an online business built on recurring subscriptions and memberships," said Casey Graham, CEO in a company release. "Although we saw incredible growth month over month on the front end of the business, we always had trouble recovering failed credit card payments and retaining customers that were about to churn."
The firm says it is already cash flow positive, but saw an opportunity to raise this new funding with the help of its board of directors and a few local entrepreneurs. The company has a goal of recovering $1 billion for small businesses by the year 2023.
Most of Gravy's customers are in one of four categories, e-learning/online education, SaaS, subscription boxes or health and fitness, according to a spokesman for the company. He added however that Gravy can work with any company that accepts recurring credit card payments.
Cover photo: iStock
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