Mindset Payments

Mobile payment space: in need for some clarity (1/2)

Mobile payment is clearly the buzzword of this beginning of the year – with Quora (combining the two leads to even more hype)

However, I think recent articles have sometimes added more confusion to this space than clarification, especially with regards to credit card acceptance on mobile or NFC. In the following 2 posts, I will try to post what I believe are underestimated aspects for these 2 technologies/businesses.

Credit card payments on mobile

Recently many blogs have published posts on the recent move by Intuit to propose GoPayment without monthly fees for a limited time, apparently a move against Square. ReadWriteWeb also published a review of four Mobile Credit Card Technology. However these articles, in my mind, fail to clarify one of the key differences between Square and other providers:

Merchant card account processing: different devices, same economic model

While VeriFone, Intuit etc, all offers payment on mobile, they are not much different from regular merchant account with terminals. To accept payments, you need to provide revenue details, address (online or offline), merchant identification and follow an extensive credit check. While their providers aggressively advertise accepting payment on the mobile as innovative, they  are in truth replacing one device (the terminal) with another one (Iphone or other mobile). The barrier to accepting credit card payment, is however, not lowered and if you are launching a new activity or have an activity on the side for which you want to accept credit card payments, chances are you will have difficulties using these systems.

Square: extending credit card acceptance to everyone (or almost)

Square‘s value proposition is much different. While it still verifies the credit worthiness of its customers (you can read the following post on Tekfin for more details on their innovation in this field) it does not require a merchant account or many detailed information. I am for example approved to use a Square, even if I don’t have a specific merchant activity (if you don’t count demoing it to other fin geek as a professional activity 😉 ). While Square offers functionalities that are clearly targeted toward merchants, especially the Ipad app which can lists products, it also allows everyone to use it to launch personal projects and activities.

Another specificity of Square, which hasn’t been developed extensively so far, is that it proposes an identity for both receiving payment and making payments. A user paying on Square has extra functionalities, such as photo verification for payments or access to its receipts on the Square website. I believe much more can be done from this perspective.

Next NFC Payment and Google, or we know nothing about what Google is going to do except that Checkout will be an proposed option.

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