VeriFone recently published a press release (found here) describing the mobile commerce market; or more particularly the challenges mobile payment vendors face in gaining retailer and consumer acceptance of the complex mobile payment equation.  I was impressed with VeriFone’s honest interpretations of the current market situation. 

The article lists six rules, by VeriFone CEO Douglas G. Bergeron, that “industry participants need to adhere to in order to ensure success of mobile commerce.”  These rules ring true and are especially compelling coming from someone who has been in the industry for as many years as Mr. Bergeron.

In this series of posts I’ll comment on each of these rules and show how Propay’s social m-payment solution,  Zumogo, addresses each one.

Rule 1: “Deployment and management of complex NFC technologies will require significant ongoing services from the retailer’s payment systems provider. Until retailers are assured of receiving real value from mobile commerce, service providers who stand to gain from either carrier fees, advertising revenue or transaction charges must be willing to bear the costs of this highly disruptive paradigm shift.”

There’s no question that acquiring hardware at the point of sale, alone, is a significant expense to the retailer, but adding the additional maintenance costs and service fees that NFC vendors will charge makes NFC a hard pill to swallow for the retailer and will continue to be “until retailer’s are assured of receiving real value”. 

Zumogo provides a viable solution to both issues:

Expensive hardware and maintenance costs:

Zumogo eliminates the need to purchase additional hardware at the point of sale.  With Zumogo’s point of sale integration software, which will be released soon, the retailer can leverage the substantial feature set and connectivity of their current system by installing extensions to their POS software.  For a merchant who has minimal or no POS integration needs, a browser is the only requirement to securely execute mobile transactions.

Real value for the retailer:

Zumogo and NFC are complementary technologies and both provide significant value to the retailer under the right conditions.  There are scenarios where the “tap and go” efficiencies of NFC work very well.  For example, situations that require high-volume, in-person and possibly automated transactions such as bus and subway terminal turnstiles, provide a great environment for NFC.  For situations that require location agnostic or asynchronous transactions such as restaurants, stadiums, deli’s, web sites or call centers, Zumogo provides a solid solution.  

To provide even more value Zumogo adds communication and process efficiency features such as localized advertising, two-way chat, push marketing, event publishing etc.  The inherent security in Zumogo’s framework reduces fraud as well as the costs associated with current data security standards.  More about these features will be discussed in later posts.

The expense and complexity of NFC will be difficult challenges for the large-scale adoption of the technology.  While retailers will always require secure solutions they also want the payment process efficiencies that mobile solutions promise  at an affordable price, which is exactly why Zumogo was created.

Part Two ->

Wayne Peck – Director of Software Development