It may not be the year of mobile payments — yet — but it is certainly the year mobile payments players are laying the groundwork for what they know is inevitable.
That is, mobile is going to increasingly play a role in how money is thought about and how it is moved around the world, between people and between people, businesses and financial institutions.
This week, PYMNTS dug into the week of mobile pay news to bring you the latest from the ecosystem. And, like most weeks (as demonstrated by our past few weeks of tracking the top news and players), it didn’t disappoint.
This week, that meant: Early Warning’s clearXchange network and its impact on banks’ mobile payments reach; the latest in the Dunkin’-Starbucks customer loyalty battle; what’s happening in biometrics for Wells Fargo; Square’s plans in Australia; Alipay’s new funding boost; PayPal’s financial inclusion partnership; Stripe’s in-app push toward EMV; Mitek’s global expansion for mobile deposits; and Apple Pay’s latest win in the gas station industry.
And that was just in the past four days.
Early Warning Boosts Big Banks’ P2P Power
The tech giants in the P2P payments space are about to get competition from six top U.S. banks.
Early Warning, a real-time payments, authentication and risk mitigation solutions provider, announced Wednesday (March 9) that Bank of America is now live in processing real-time P2P transactions through Early Warning’s clearXchange network.
Bank of America announced its plans on Wednesday, following in the footsteps of U.S. Bank, who announced plans to bring real-time P2P payments to its customers on March 3. The real-time payments solution will be available for JPMorgan Chase, Capital One, PNC and Wells Fargo later this year, according to what representatives told Reuters.
Customers at the banks can send real-time P2P payments to customers between banks, which would be available for immediate use. What this means is that, for the first time, consumers can directly deposit funds into their bank account to be available in real time.
Dunkin’ Donuts/Starbucks Mobile Loyalty Wars
The coffee giants in the country have found one major way to make mobile payments relevant for consumers: tying it to loyalty. So, when Dunkin’ goes after Starbucks following the news that the Seattle-based company was changing its loyalty program, it also has to do with mobile strategy (which Starbucks, admittedly, has a lead on).
But now Dunkin’ may have found its way in.
That’s exactly what Dunkin’ Donuts and CEO Nigel Travis are planning, Reuters reported. In an interview, Travis remarked that the recent changes Starbucks made to its rewards program — ditching points per purchase in favor of points per dollars spent — could open up an opportunity to win back low-margin spenders from the larger chain.
“We feel excited about the change to Starbucks’ loyalty program,” Travis told Reuters this week.
How is Dunkin’ going about its Starbucks loyalty subterfuge? Since the change to the Seattle coffee chain’s reward program now rewards customers who spend more per purchase, irrespective of how frequently they go, Travis said that his company is giving out $5 gift cards to publicize its more advantageous loyalty program. At DD, customers have to spend $40 to earn a free beverage, compared to $62.50 at Starbucks.
Wells Fargo Goes Biometric
It’s becoming increasingly evident that biometrics and facial recognition are the future of mobile payments security.
Wells Fargo made news with this week when it spoke about its plans to roll out a new feature for corporate clients using the bank’s commercial banking app. Going forward, those clients will be identified using an eye scan or face and voice recognition technology.
It is yet another nail in the coffin for passwords, PINs and other information that a person can easily forget, lose or have stolen.
“Usernames and passwords are basically 15 years old. They’re at the end of their useful life,” said Secil Watson, who oversees online and mobile applications for Wells Fargo commercial banking. “Something needs to take their place.”
The move comes as Apple and Samsung are installing fingerprint scanners on their phones and big consumer banks, like Chase and BoA, are allowing biometric sign-ins.
The best eye scanners in the world use retinal scanning tech to check the pattern of blood vessels on one’s retina. Wells Fargo is not using something quite so extreme and is instead using a smartphone’s front-facing camera to verify the pattern of blood vessels on the whites of one’s eyes. That pattern is apparently as unchanging as a fingerprint.
Square’s Australian Play
Square is expanding its global footprint with the launch of its suite of POS solutions in Australia — its fourth market so far, the company announced.
Which, of course, means more access for SMBs to accept mobile payments. The company has partnered with Cuscal, an Australian transactional banking services company that has maintained its presence in the local market for over 40 years.
“With Square Reader in Australia, we’re empowering local sellers with the tools they need to start, run and grow their businesses. This is an important step for our company and an exciting moment for a market so committed to innovation and an entrepreneurial small business community,“ said Jack Dorsey, CEO of Square.
While, in the U.S., Square offers free card readers and charges 2.75 percent per transaction, the company has taken a different approach in the Australian market, with a 1.9 percent transaction fee that is stapled to a $19 Square reader.
Alipay In the Spotlight
Alibaba’s financial arm, Ant Financial, may soon be worth somewhere between $50 billion and $60 billion. At least, if the many reports citing anonymous sources are correct. Why does that matter for mobile payments?
Alipay — Ant Financial’s dominating mobile payments service.
Early this week, The Wall Street Journal reported that Ant Financial was looking to raise $3.1 billion (20 billion yuan), which would put its valuation around $50 billion. But, by later in the day, a Reuters report had pegged that valuation closer to $60 billion.
Alipay has become a staple service for Alibaba and Ant Financial, as China has a massive population of mobile-friendly consumers who are driven to smartphones for nearly ever facet of life, including payments and finances, of course.
Just to get a taste of its success, during Alibaba’s Singles’ Day Global Shopping Festival, the company had $14 billion in GMV settled through Alipay across its platforms. That’s from 115 million buyers in a 24-hour period.
PayPal’s Financial Inclusion Partnership
PayPal has extended another relationship aimed at supporting startups that serve the financially excluded — a population that instead often turns to their mobile devices for financial needs (less access to banks).
This relationship between PayPal and Village Capital, a venture development organization that finds, trains and funds entrepreneurs working to solve global challenges, aims to improve access to financial services across the globe — or, in this case, the underserved in Latin America, the U.S. and India.
Through this collaboration and with the support of local ecosystem partners, the two companies will operate three venture development programs in 2016 to support emerging FinTech innovators in those regions.
Touted as a first-of-its-kind initiative, PayPal and Village Capital will serve roughly 40 additional FinTech startup ventures in order to power progress toward increasing financial participation for underserved populations.
Stripe’s In-App EMV Push
Mobile point-of-sale technology provider CardFlight announced this week its integration with digital payments and FinTech firm Stripe to enable developers to accept EMV chip card payments within mobile applications.
As part of the collaboration, CardFlight will make its EMV chip card-enabled mobile card readers, which will also accept magnetic stripe payments, available to Stripe merchants and developers.
“Together with Stripe, we can enable more developers than ever to quickly, easily and securely accept EMV chip card payments in their apps,” Derek Webster, founder and CEO of CardFlight, explained in a press release. “Our goal is to enable companies and developers to accept payments in their own apps without having to invest in building their own payments infrastructure. Today’s announcement is another leap forward in that mission.”
Mitek Brings Mobile Deposits To The UK
Mitek is expanding its global outreach with the launch of Mobile Deposit, its mobile check capture technology, in the United Kingdom.
Since its launch, Mobile Deposit, which lets users quickly cash a check by taking an in-app picture, has seen widespread adoption in the U.S. and Canada, with over 60 million consumers using the technology and over 4,800 American and Canadian financial institutions supporting it, including the top 10 American banks.
With a huge user base backing its growth prospects and a change to the 2015 Small Business, Enterprise and Employment Act, U.K. banks can now accept, exchange and process check images starting July of this year.
The mobile capture and identity verification software solutions provider said, after the U.K., it plans on expanding its product outreach to other countries, and to support that, its solution will be customized for each market to accommodate the variances in underwriting and tech specifications.
Apple Pay Drives Up Gas Station Acceptance
A few weeks ago, PYMNTS reported that Apple Pay was getting a test drive in ExxonMobil’s Speedpass+ app, with Apple Pay users in limited locations now able to tap and go to pay for their gas.
It seems the service is now ready to pull out into regular traffic, as reports broke this week that ExxonMobil will be rolling out Apple Pay at more than 6,000 gas stations nationwide.
And though it will be real world — and highly habit-forming — commerce, it will not be via the tap-and-pay method that is, generally speaking, the hallmark of physical retail that Apple Pay uses. The ExxonMobil integrations instead capitalize on Apple Pay’s use as an in-app payment method.
To pay at the pump with Apple Pay, users must download the ExxonMobil Speedpass+ app. When drivers roll up to an ExxonMobil station, the phone knows where it is and lets users select a pump number, or they can use the app to scan a code on the pump. From there, it is gas pumping as normal, followed by authorizing payment with Apple Pay.