What is a Mobile Wallet? Part 2 - Merchant Technology
December 8, 2014
In our last "What is a Mobile Wallet" post we covered the main technology components of a mobile wallet and how smart phones will help us move away from physical wallets. This time we are focused on the technology that merchants will need to have for each type of mobile wallet application.If you have been following any of the financial regulator changes you should have seen the Durbin Act get passed in 2010. This should be a clear sign that merchants are at war with legacy payment platforms and are actively seeking new mediums that:
A) lower prices
B) increase sales
C) improve loyalty
D) reduce fraud.
Today merchants can accept one of the following options:
As you can see, merchants are heavily incented to push debit cards as it lowers their repudiation risk and transaction fees. Without the promise of new customers and/or the reduction of fraud the incentive for the merchant to take credit cards or checks isn’t what it once was.
Mobile Wallets have the potential to greatly reduce fraud risk while increasing data and membership loyalty at merchants. Hence, even for the same transaction fees, if the merchant gets more business and especially more repeat business – there is a huge upside for merchant adoption.
The second leg of merchant technology involves the payment terminals. Today payment terminals have a multitude of technology including the following:
Ultimately, CU Wallet believes that mobile wallets will need to support many of the legacy payment vehicles as well as all future merchant technology to be widely adopted. This means, it needs to be a mobile wallet platform whereby you can evolve the tools over time to support a dynamic environment where both consumer and merchant technology get cheaper every day.
CU Wallet platform starts off using QR Code technology for quick transaction tokenization (security) and payment while preparing for NFC and BlueTooth options.
Click here to see the next post in the "What is a Mobile Wallet" series where we talk about user demographics and who mobile wallets are for.
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