RAMP Conference in Chicago
Last week Waspit was one of the sponsors at the RAMP Alternate Payments and Mobile Retail Services Summit in Chicago.
The conference provided a platform for retailers and companies in the payments sector to debate POS solutions, technologies, payment ecosystems, loyalty programs, mobile coupons, and many other topics sensitive to retailers today. All the leading players within the respective industries were there – MasterCard, AMEX, Google Wallet, ISIS, Discover as well as many leading retailers such as Macy’s, McDonald’s, BP and Sears .
Obviously contactless and mobile payments featured heavily at this year’s conference – particularly in reference to the interchange merchants now have to pay on micro-transactions.
Interestingly enough the retails have a fairly negative view on contactless and mobile payments. As card companies try to capture even more of the cash market by going after micro-transactions, they are not taking anysteps to incentivise merchants by implementing an alternate interchange model for micro-transactions. This means a merchant pays the same rate of interchange on debit card micro-transactions as they would on a $50.00 debit card transaction.
David Matthews, CIO from National Restaurant Association, suggested (figuratively speaking) that his members would rather someone steal a candy bar priced at a $1.00 than pay for it with a debit card. This is because they would pay $0.22c on interchange and therefore lose their gross margin on the transaction.
Tripp Sessions, Head of IT at Wendy’s Restaurants, said that over the past 10 years they have moved from being a predominately cash based business to one that now pays over $10 million in interchange per year. This is once again because customers are increasingly using cards to make micro-payments instead of using cash.
It’s obvious from these discussions that the card companies need to provide merchants with an alternate interchange model before merchants promote contactless and mobile payment methods to their customers. This really is in the best interest of the card companies, because if they really want to promote micro-transactions, the best way to educate the customer is through the merchants.
Another interesting topic revolved around the introduction of EMV in North America. After VISA’s announcement in August stating they would be pushing for EMV in the USA, they are now proposing to incentivize merchants to switch over by claiming merchants will be able to reduce their annual PCI costs. But the fact is merchants will need to pay approximately $30 to upgrade each of their terminals to EMV, plus unpublished activation, as well as installation and maintenance fees. The changeover costs will almost surely amount to more than the savings on annual PCI audit fees for most large merchants.
Regardless, this is good news for Waspit since these new terminals will have NFC capabilities built in. According to ABI Research by the end of 2012 85% of terminals worldwide will accept contactless transactions.
Waspit CEO Richard Steggall spoke on a panel ‘State Of The Union: The Mobile/Contactless Payment Evolution, Alternative Payment Systems – Where or Will We Ever Arrive?’.
He also chaired a panel which had Jim Stapleton (Chief Sales Officer, ISIS), Kevin McGinnis (Vice President Product Platforms, Sprint), Robb Duffield (Senior Vice President, Corporate Development, Sequent Software) Stefan Happ ( SVP and GM of the Americas, Global Payment Options, American Express) and Robert Ziegler (CEO, Corduro).
Some of the more interesting topics covered by this panel revolved around the how the pre-paid industry and GPR vendors need to innovate if they want their user propositions to remain relevant in a rapidly evolving payments sector.
Also, that the mobile wallets currently on the market tie the consumers into specific banks, networks, even handsets due to the way the market has segregated itself. Corporate alliances often limit the consumer’s choice. Jim Stapleton from ISIS agreed that an agnostic solution is needed if wide-spread take-up of mobile payments is to be achieved.
Brian Smith, director of product platforms at Sprint was questioned as to whether he thought the Google Wallet promotion would go towards diluting or confusing Sprint’s own proposition. By promoting a joint Google, Citibank, and Sprint proposition, Sprints core Telco proposition becomes a much more complicated sell at the retail level. He said that he did not believe this would be the case, but that retail staff would be sufficiently trained. Yet when in a Sprint store today, the staff were unable to answer with any certainty even the most basic of questions relating to how the Google Wallet could be activated.
The conference was a two day event and covered a vast array of highly relevant topics. Further information can be seen at www.retailramp.com. Also, the event was covered by Mobile Payments Today who interviewed a number of companies in attendance. See their interviews on the below link, including an interview with Waspit.