VeriFone has crystallized its long-term position in a pivotal announcement today about a new product determined to put the VeriFone POS devices at the coveted center of payments, loyalty, and mobile commerce industries. As reported by American Banker this morning, VeriFone’s new service is called, “PAYMEDIA Solutions” and it appears to have the feature-rich experience that several different companies are attempting to provide to consumers through the emerging mobile commerce sector.
A MANAGED PAYMENT SERVICE
PAYMEDIA includes a new next-Gen VX 520 hardware component as part of the solution. Application management is automated and transparent to the merchants and acquirers, so they do not need to worry about keeping the terminals up to date with proper software, according to an email interview with VeriFone.
PAYMEDIA is positioned to offer a remarkably wide suite of services. The VeriFone video on the services offers little in the way of specific detail, but gives a preview of the targeted categories, including social media applications, customer engagement technologies, and reporting to detail insights into customer behavior.
The only specific features of this service are illustrated in the features of MocaPay and vPromos; two customer engagement services that also are based on “software as a service” delivery instead of license applications and installed software.
In an e-mail interview today, VeriFone said that they do not own an interest in either MocaPay or vPromos. When asked about loyalty industry incumbents like Maritz and Affinion, VeriFone said in an e-mail:
“In an effort to provide an unparalleled solution in features and functionality, VeriFone intends to partner with a diverse array of loyalty/rewards, couponing, alternative payment, and social media providers including some large well known organizations. Partnerships will be announced as additional solutions becomes available with PAYMEDIA.”
Clearly, VeriFone is open to working with other partners to enable various features and functions of PAYMEDIA in the future.
SECURITY, SECURITY, SECURITY
To secure this system, VeriFone relies on its “VeriShield total protect” system, another subscription-based offering empowered by EMCs RSA. On its website, RSA refers to itself as the security division of EMC. It solutions combine identity assurance, data loss prevention, encryption, and (interestingly) tokenization, which is one of the items offered by the new TSM model.
DIRECT COMPETITION, OR BEST FRIENDS
VeriFone and Isis appear to be going after the same thing. Both want to accept all payment types: Visa, MasterCard, PayPal, and maybe even ACH. Both want to offer additional value beyond simple payment transactions, such as coupons, loyalty programs, discounts, tender steering, and other value added features. And, of course, both want to get paid for the services. Recent articles described how these two companies might be planning to work together in an effort by Isis to quickly penetrate the retail market in United States.
Although there are many questions about the product, service, and customer interface of the Isis product, one thing is for sure: we will all see what it looks like before the end of the year with its Salt Lake City market test. The Salt Lake test, according to Isis and its recent press releases and announcements, will have a feature-rich experience for consumers. The Isis video demonstrates a scenario where a customer can leave their house without taking their physical wallet, and have the ability to pay for everything from coffee to repair genes, without missing out on coupons, discounts, or loyalty programs. The significant difference between the offerings of Isis and VeriFone’s PAYMEDIA is the network access point: VeriFone will use the IP connectivity of all POS devices, while Isis will likely use the networks provided by its founding partners: AT&T wireless, Verizon wireless, and T–mobile.
With this new announcement, the two most likely mobile commerce solutions are coming into sharper focus. The key is connectivity. Isis hints at its service in its recent video, while VeriFone’s services is taking shape through PAYMEDIA and PayWARE.
To offer the feature–rich experience, which merges payments with coupons with other forms of rewards programs and loyalty systems, these networks need to be accessed through an IP system instantaneously at checkout. That can happen in one of two ways: either the retailers POS system can access the network, or the customer’s mobile phone can access the network through its mobile carrier. This is not an insignificant point because the network that is utilized for these transactions will likely carry with it the ownership of the customer, and the ability to collect and analyze the corresponding data. That also means that the ability to share in the revenue, and charge a fee for these services.