Is Bluetooth, *Gasp,* A Viable Mobile Checkout Alternative?

Written by Evan Schuman
December 4th, 2012

In the world of in-aisle mobile checkout, device size and convenience are critical, given that today’s typical associate ships with only two arms. That would certainly argue against associates having to carry two devices, synched via Bluetooth, to perform a checkout. But the almost-having-cornered-the-market nature of iPads and iPhones in in-store mobile checkout, coupled with Apple’s new and incompatible Lightning connection port, may force some inconvenient near-term options.

When Apple rolled out its new hardware in October, along with its Lightning port, it created an annoying short-term problem for retailers, because the Lightning adapter it sells interferes with the card sleds retailers use. Until Lightning-compatible sleds start shipping, chains have to improvise. And even when those new sleds ship, the inventory of existing sleds will still require workarounds.

On Monday (Dec. 3), a European mobile and E-Commerce payments and POS card reader vendor (Adyen) introduced a device that can handle both magstripe and EMV, which certainly makes sense for Europe. The interesting part, though, is that the Adyen approach uses two units (a reader/scanner and the Apple or Android smartphone or tablet) connected by Bluetooth. That’s a lot of hardware for an associate to lug around in the aisles,

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but it’s apparently necessary (at least now) for the EMV functionality. It also nicely—if unintentionally—sidesteps the Apple Lightning problem. Indeed, Bluetooth would theoretically avoid other interface upgrade issues, too. Is the trade-off worth it?

As a practical matter, the Adyen approach requires at least four hands. Typically, customers would hold the 4.2-ounce (about 118 gram) card interface device (roughly 3.9 inches long, 2.7 inches wide and about 0.75 inches deep) in one hand while holding (or swiping) their payment card with their other hand. Meanwhile, the associate uses one hand to hold the mobile device (typically a tablet) and the other hand to type.

Speaking of trade-offs, the Adyen approach also raises an interesting EMV question for the U.S. When Adyen contacted us about its rollout, company spokesperson Eric Sokolsky said: “Adyen is looking to the future when EMV cards will be the standard format in the U.S.” That is undoubtedly true, but the company is apparently looking with quite a powerful pair of binoculars, as it made this announcement with three simultaneous rollouts: London, Amsterdam and Berlin.

Sokolsky said Adyen is not even offering this approach for U.S. retailers at this time but would if any retailer requested it. Although that is hardly a rousing endorsement of U.S. retail EMV enthusiasm, it’s probably a realistic one.

Adyen is “focusing on Europe for now, because that’s where the EMV action is,” Sokolsky said, adding that the company will roll it out to other geographies based on EMV market maturity. “That said, should a major retailer contact Adyen asking for the device, we will work with them on an individual basis.”

Although the card brands are pushing readers to be able to handle EMV in the U.S., not many retailers have embraced EMV—for some very good reasons. There’s a fine chance that a healthy number of readers will be able to handle EMV in a couple of years, but will consumers have such cards anytime soon? The changes within mobile payments are sufficiently up in the air that most chains want to see those events play out more before committing to EMV.

That all said, two U.S. issues may make EMV mobile card swipe capabilities more interesting than their countertop-based older cousins.

First, there’s the age-old border issue, given that Uncle Sam is surrounded by two EMV strong supporters. As Walmart argued more than two years ago when it first tried pushing U.S. EMV, if you have to support EMV for Canadian and Mexican customers coming to stores in northern Minnesota, Maine, Vermont, North Dakota, southern Texas, California, Arizona or New Mexico (among other border states), you might as well standardize EMV chain-wide (as Walmart has done).


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Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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