Payments Companies Push ISVs And VARs To Move Fast To Sell Mobile Tech to Merchants

Stressing such factors as the rapid growth of mobile commerce and the advantages of streamlined integration, representatives from Discover Financial Services, Mercury Payment Systems LLC, and PayPal Inc. on Tuesday urged a roomful of point-of-sale technology resellers to begin moving quickly on selling mobile payments to retail clients.

“I would challenge you to look at your [payments] partners and ask, are they ready to move fast and take advantage of mobile,” John Badovinac, senior manager of acquirer relations at Discover, said to the audience of independent solutions vendors and value-added resellers attending the RetailNOW conference in Orlando, Fla.

Nick Nayfack, director of product for mobile and emerging payments at Durango, Colo.-based Mercury, said integration time for mobile payment and marketing programs has been drastically reduced. Lengthy and complex integrations often put off resellers looking to equip merchant clients for mobile. “This is not a week-long project,” he said. “It’s one to two days. We have two partners doing one-day integrations. It’s a significant step forward for us.” The swifter integrations are the result of a program that will emerge from its “alpha” stage and become commercially available for VARs and ISVs within four months, Nayfack said.

Pricing, too, could soon become more favorable for merchants. Speaking to Digital Transactions News, Nayfack said pressure is building within the payments industry to classify mobile transactions so they will receive card-present interchange rates, which are generally less expensive to merchants than card-not-present rates.

“[Mobile] has to be treated as card present,” he says. “I can’t go to a merchant with a straight face and say, ‘It’s 3% with a phone but 2.8% with a card.’” One way to look at mobile for interchange purposes, he says, could be “card not present/person present.”

Both Discover and Mercury are working with PayPal. Discover provides the card-processing rails and Mercury, which is now part of processor Vantiv Inc., offers PayPal acceptance for physical points of sale. But all three companies have traditionally worked through independent sales organizations to sell their services. With mobile phone and tablet technology, they are now pushing hard to recruit ISVs and VARs, which specialize in marketing business-management systems to retailers that can include payment capability.

“We’re creating a relationship and a pipe through which you’re delivering the future of the point of sale,” Badovinac told the audience. That future, he and the other speakers added, will soon include Bluetooth beacons in stores that will identify customers as they walk in and, if the customers opt in, allow stores to send personalized welcome messages and incentives.

Although they are the subject of considerable speculation, Bluetooth beacons remain in the testing phase. “Delivering that experience is really, really difficult, but very cool,” said Badovinac.

All three speakers stressed the importance of mobile marketing as a means of delivering personalized offers with measurable results. “Mobile is a scalpel for marketing, as opposed to the big hacksaw of traditional channels,” said Nayfack.

To underscore the sense of urgency, Brandon Piper, senior manager for retail partner development at PayPal, outlined the rapid build-up of mobile transactions within PayPal’s system. From processing $100 million in mobile volume in 2009, the company progressed to fully $27 billion last year, he said.

“We stumbled on it four years ago when we saw mobile taking off,” Piper said. “It’s part of the changing consumer expectation that you can take out your mobile phone, tap two buttons, and get what you want. [Such an expectation is] pretty unreasonable, but we’re pretty close.”

RetailNOW is an annual conference produced by the Charlotte, N.C.-based Retail Solutions Providers Association.