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Mobile Payment Brawl: POS Players Vs. Reader Vendors
In what could be seen as undermining its own consortium, Verifone executives have been telling reporters how difficult the Google integration will be for retailers, despite Google’s arguments that the integrations will be fast and easy. Much of that involves Verifone’s efforts to justify fees it wants to charge for such integrations. (What’s the reality? Like most things, it’s somewhere in the middle, being harder than Google said but easier than Verifone suggests. But y’all knew that already, no?)
According to players in the mobile payment space, the key wildcard in these efforts is Apple. The ISIS mobile carrier (AT&T, Verizon and T-Mobile) alliance is not seen as viable long term, and PayPal has already said it will not directly compete with Google. Apple has not officially said that it will compete against Google, although its plans for incorporating NFC capabilities in an upcoming iPhone and iPad are well known.
If Apple cuts a deal with Google and takes the Google cash (and it would be worth a huge amount of money to Google to ink that deal), Google will likely run the mobile payment table: Instant interoperability, and Google would have its package across all iPhones and Android phones. Whatever is left of BlackBerry at that point would likely fall in line.
If Apple and Google do not cut a deal, things are likely to get quite messy. Apple’s recent history suggests that it would resist standardization efforts and opt for an especially proprietary approach. Given its healthy marketshare in the smartphone space and its marketing sway with consumers, that could be bad news for retailers hoping for a relatively quick and painless mobile integration. Disjointed payments are trivial and won’t be much of a problem, but different approaches to data could be disastrous.
Other players are on the sidelines, but there are no meaningful indicators that any would have the funding or relationships to challenge the Google group. (An interesting comment was made about the mobile differences between Google and Microsoft. Google, it was said, is very fond of creating solutions for which there is no problem, while Microsoft’s preference is to create problems for which there is no solution.)
The problem with other vendors trying to move in is that, as many startups are now discovering, it involves two success-killing realities. First, it will often involve selling to both the retailer and the consumer, which throws the vendor into a difficult chicken-egg problem. (Retailers won’t buy until lots of their customers have, and customers won’t buy until several of their favorite retailers do.) Second, this requires software to be installed within the POS and, specifically, in an area that interacts with sensitive card data. You can’t get much more invasive than that, and few chains—if any—will permit a startup to get even close to their card data.
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.
-Marc
