Everyone believes mobile payments are the next big thing. It’s just that no one quite knows when that next big thing is likely to take off, or what exactly it’s going to look like.
"I think that’s where the future is going to be going for our customer,” Charles Holley, Wal-Mart’s CFO, told an investor conference Wednesday. “It’s just not clear where exactly it’s shifting."
Wal-Mart, for its part, has been trying to deliver mobile payments via MCX’s CurrentC – but it’s running in a field with Apple Pay, Google Wallet/Android Pay, PayPal, and Samsung Pay – just to name a few of the headliners. While there are early favorites, there are no clear winners – yet. Outside of Starbucks, none of the mobile payments players has captured hockey-sticking user numbers in the use-your-phone-instead-of-a-card-at-checkout category that would indicate something is really taking hold.
Part of the problem, according to WiseSec CEO Vadim Maor, is that the way mobile payments are pitched to both users and retailers really kind of misses their most basic desires in a payments platform.
“The smartphone user wants a simple system. Whether she’s at a bank or retail location, she just wants to pay,” Maor told MPD CEO Karen Webster in a recent podcast interview. “Which means that it needs to be as easy and seamless as can be."
But – as all hardened payments veterans know – offering an easy and straightforward experience for consumers on smartphones can be far from either easy or straightforward for merchants – particularly those with “mature” back-end systems.
“The systems on the retailer side are mature systems that aren’t updated on a weekly or monthly basis – unlike consumer smartphones that can change every week and every month with software upgrades and the ability to add new apps,” Maor noted. “The retailers understand the benefit of accommodating smartphones for payments, but they have invested a lot in the infrastructure to accept payments – they can’t be expected to keep replacing and upgrading their existing POS infrastructure often enough to keep pace with consumer technology and app preferences."
The WiseSec solution is a platform that is the bridge between a retailer’s existing system and the easy acceptance of “tap and go,” mobile payments. While apps like Apple Pay rely on NFC technology to provide the mobile payment experience, WiseSec uses bluetooth technology to locate and authenticate a customer in the store.
"We don’t require the merchants to do anything, the only thing they need to do is to modify their API to accommodate third parties and that’s it,” Maor noted when explaining how its platform works with existing systems. “We’re doing the authentication of the device, and the authentication between the smartphone and the back-end system. We want the customers to be able to pay at the POS by tapping her smartphone to a touch pad that is basically not connected to anything."
WiseSec did not get its start in retail payments; the original use of its technology was for security and defense, and more recently in financial services where they have managed to smartphone-enable ATM transactions.
No matter where their platform is applied, however, it all operates on a simple principle – using location details to authenticate users and their devices to retailer POS systems.
"We know who the user is, we know where she is now, and we know what she wants to do,” Maor told Webster. “We are responsible for protecting the data as it flows between the device and the organization, and to protect the organization’s infrastructure."
And what sets WiseSec apart, says Maor, is that it is truly agnostic about the device or source of the transaction.
“Consumers don’t need to change their phones, they don’t need to upgrade their Android devices or iPhone 4 or 4S. If they want to use their mobile phones to pay, all they need to do is to tap the phone to a WiseSec installed touch pad."
And that sort of independence matters, Maor notes, because it means that retailers don’t have to play favorites. And, as Maor points out, that includes retailers’ ability to turn consumers’ bank accounts into a mobile payments solution that can be used in-store to check out.
"Today we have a lot of organizations that are holding customers’ money and they aren’t necessarily a credit card company or a bank,” he noted. “WiseSec is not going to replace Apple Pay of course, but Apple Pay didn’t invent tokenization or biometric authentication – the patent is on having a secure element inside of the phone. We use tokens, we use encryption and biometric tools with the devices we can enable to deliver the same tap and go experience, without having to have an iPhone 6 and Apple Pay."
But to be clear, WiseSec doesn’t want to replace the POS or disrupt retail so much as it wants to enhance it by making the bar for entry low enough that the growing rumble for mobile payments is enough of an incentive to push them forward – and accelerate acceptance of mobile payments.
The company is still new to retail – though Maor alluded to deals in the works in their home country of Israel with some major retailers. The firm is getting some traction stateside as well, including in the hospitality market, where hotel guests can use their smartphones as room keys. WiseSec will also be stateside for Innovation Project 2015 at the Innovator Expo where it will demo its technology.