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PAYPAL HERE REBOOTS: PayPal has a growing ecosystem of offline payments solutions, and one of the key pieces is PayPal Here, the two-year-old app for merchants, which pairs with an attachable dongle that allows smartphones and tablets to accept credit card swipes. Earlier this week, PayPal announced a redesign of the app, touting new features such as streamlined checkout, improved search, itemized shopping carts and e-mailed receipts, and the ability to swipe customer cards at any point in the payment process. "We've incorporated a lot of feedback from small businesses," Jill Rose, PayPal’s director of small business marketing, told BI Intelligence. "It's all about enabling them to do what they do best … We want to be able to scale with them." Early reactions were favorable on the iOS app store. “I wasn’t really impressed with the app," wrote user Matt M. Mitchell. "But love the redesign. Much more simple and streamlined.”
The next move for PayPal Here might be an upgrade so that the hardware can accept EMV credit cards — cards with an embedded microchip. "We are definitely looking into future enhancements of the hardware, as well as EMV,” says Rose. The U.S. credit card industry is moving to overhaul card security with EMV cards, and one question is whether mobile payments systems like PayPal Here will move with it. PayPal executives are not saying much else on the subject, citing quiet-period policies ahead of an April 29 earnings call. PayPal Here has already implemented EMV card readers in the UK and Australia, where EMV technology and chip-and-PIN cards are the standard. (Keith Griffith for BI Intelligence)
VERIFONE CEO TOUTS EMV CAPABILITY, TURNAROUND: Verifone CEO Paul Galant said yesterday that last quarter 70% of the company’s devices shipped with EMV compatibility. As we've written, the migration to EMV is a huge opportunity for point-of-sale hardware providers like Verifone. Galant, who made the remarks during a keynote address at the ETA's Transact 14 conference in Las Vegas, took the reins at Verifone in September. Galant was charged with turning Verifone around, after the company's struggles with a frustrated client base, financial underperformance, and questionable acquisitions. “The VeriFone address was very striking and well done,” Yankee Group senior analyst Jordan McKee tells BI Intelligence. “Galant was convincing in describing how they’ve dealt with the issues in the past, and are starting to come back to a place of prominence.” (Keith Griffith for BI Intelligence)
THREE THINGS TO KNOW ABOUT HEARTBLEED: After cybersecurity researchers this week announced the discovery of the Heartbleed security flaw, a vulnerability that can expose encrypted data from affected Internet servers, security experts have been scrambling to fix the estimated half million websites affected. Heartbleed is relevant for the payments industry because credit card and transaction data can be compromised. Here are the top three things to know about the bug:
What kind of data can Heartbleed expose?
Essentially, any data stored on or received through a website’s servers, including account passwords, credit card and transaction data, and personal information.
How does it work?
Using the “heartbeat” communication link that keeps a secure connection active, attackers can trick a server into responding with a block of data-containing system memory. The attack can be repeated until desired information, including the server’s encryption key, is obtained.
Is my website vulnerable?
You can test your site’s current vulnerability by entering the domain name into this tool. Unfortunately, there is no way to determine if a server has been attacked in the past using Heartbleed, but only websites that use a security protocol called OpenSSL would have been affected. (Krebs on Security, Heartbleed.com, Keith Griffith for BI Intelligence)
SQUARE'S FUTURE UNCERTAIN. Echoing one of our 2014 predictions, a new article from Re/code paints a bleak picture of Square's prospects. Here are the key points:
A buyout is unlikely — Sources say CEO Jack Dorsey doesn't want to sell to Google. Apple would be more likely to invest in its own payments solution if it got into payments, and an offer $8 billion might garner Dorsey's interest, but the company's numbers don't support that valuation.
An IPO isn't imminent — Again, Square's numbers would be unlikely to support a public market valuation acceptable to Square's investors.
Square's partnership with Starbucks has ended up lukewarm — Starbucks CEO Howard Schultz stepped down from Square's board in October 2013 and while Square processes transactions for the company's U.S. stores, it's unlikely that it's making a substantial profit from the deal and may actually be offering its services at a loss. (Re/code)
UBER EXPANDS DELIVERY SERVICE: Car hailing app Uber is launching a new package delivery service in New York City that will allow users to hire couriers to collect and deliver requested items. The service isn't set up to have a courier buy things from stores, so you couldn't hire a courier to pick up a hammer from Home Depot, for example. But you could hire a courier to pickup some clothing you left at a friend's house. As Uber continues to expand the services that can be purchased from its app, its user base will continue to grow and with it, its trove of payment card data. It also means more revenue for Braintree which processes transactions for Uber. (Business Insider)
ALIPAY INVESTS IN MOBILE PAYMENT SECURITY. Alibaba-owned payments service AliPay is investing $6.5 million to create a fund aimed at researching payment security, according to Alizila. The fund will focus on investing in companies that specialize in mobile payment security. In recent news, AliPay's mobile payments business was threatened by the People's Bank Of China's decision to halt the use of QR codes for transacting payments. The central bank cited security concerns as the reason for the decision. AliPay's mobile wallet app AliPay Wallet has over 100 million users. (Alizila)
FIRST DATA NEW SMALL BUSINESS PRODUCTS: At ETA's Transact 14 conference, payments processor and technology provider First Data announced three new products geared toward small businesses.
Merchant Analytics — a cloud-based analytics platform designed to help merchants manage their business and upsell products based on customer insights.
TransArmor — a payment security product that removes sensitive information from transactions using end-to-end encryption.
Perka — a digital marketing platform with location-based marketing and social media features.
First Data's new products are part of ongoing trend in the payment industry towards integrated merchant solutions that combine aspects of payment processing, marketing and business management. (First Data)
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