ViVOtech Says Its Contactless PIN Pad Will Pave the Way for Mobile

ViVOtech Inc., perhaps best known as a maker of readers that enable contactless card transactions, this week plunged further into the point-of-sale business with the introduction of a PIN pad capable of processing contactless payments. The device, known as the ViVOpay 8100, brings the Santa Clara, Calif.-based company into closer competition with established terminal makers. It can handle routine mag-stripe card transactions but can be switched over to contactless card and mobile transactions based on near-field communication (NFC) at any time, the company says. It also paves the way for promotional and loyalty programs merchants may want to deliver on an NFC platform or on stickers or other mobile-payments media, such as micro Secure Digital cards. Merchants installing the device, which ViVOtech expects to sell for less than $150, “become future-proof,” argues Mohammad Khan, president and founder of ViVOtech. Khan says ViVOtech expects to sell between 20,000 and 30,000 copies of the device in the U.S. this year. The target market is small to mid-size merchants, which are most often served by independent sales organizations. These resellers, Khan says, have responded well to the new device since its introduction on Tuesday at the Electronic Transactions Association annual conference in Las Vegas. “ISOs like it,” he tells Digital Transactions News. Unlike ViVOtech's contactless reader, which the company introduced about eight years ago, the 8100 can process mag-stripe card transactions, including PIN debit payments, as well as contactless transactions. It also faces the customer, so the card never leaves the customer's hand and the transaction remains under the customer's control. This, says Khan, is a key point, as it helps prepare cardholders and merchants for mobile transactions, a form of payment in which the payment device, the phone, remains with the customer. The introduction of the new device may not be without some complications. It comes only a few months after Best Buy Co. Inc., a major electronics chain, shut down contactless transactions on Visa Inc.'s payWave platform because the card network would not allow PIN-based transactions, contending they slow down the contactless process. MasterCard, however, does allow contactless transactions with PINs. Merchants typically prefer to accept PIN-debit payments over signature-debit transactions because they carry lower interchange pricing. The new device also catapults ViVOtech into direct competition with established terminal vendors for the first time. Market leader VeriFone Holdings Inc., for example, has added built-in contactless capability to its 1000SE PIN pad. Khan argues his company developed the device to help speed up the transition from mag-stripe to contactless cards, and ultimately to mobile payments. “To get the market moving, we have to do this sort of thing, otherwise it would never happen,” he says. “In '02 and '03, if we hadn't done the reader, we would still be waiting today [for contactless]. Nobody believed in contactless [then].” Still, the 8100 links to electronic cash registers and terminal makers' devices, so Khan sees it working with terminal vendors' products as much as competing with them. While he concedes ViVOtech may come in for some flak from those vendors, he says he can make the case that his company's real interests lie not in POS hardware but in software, like wallets, that control virtual accounts and media such as coupons. “I do believe I will convince them,” he says. “[Our] real business is in the back-end software.” He also hopes the 8100 will help open a much larger worldwide market for all POS vendors. While there are about 2 billion cardholders globally, the number of mobile users comes to about 4.5 billion, he says. “By the time we finish, we're going to turn those 4.5 billion mobile users into payment users,” he says. “That more than doubles the 2 billion card users. That's worth going after.”