Tag: smartphone payments

The marketplace is rocked by the shocking news that a major player has dropped out.

The CEO of VeriFone, Doug Bergeron, has stunned the direct-to-micromerchant mobile payments world with the announcement that it is stepping out of that marketplace following unprofitable results from its Sail service.

The point-of sale provider’s mcommerce news came as a surprise to the majority of the industry.

As VeriFone had dedicated a great deal of last year and much of this year on the promotion of the growth of mobile payments services, the decision that the company has now made to remove itself from that direct-to-micromerchant space has caused many heads to spin. The announcement was made during the most recent quarterly conference call.

The CEO released the mobile payments news that the company is stepping down.

During the call, Bergeron stated that Sail, its own mobile payments service, has been unprofitable. This program had been giving small businesses the ability to use smartphones and tablets to accept transactions through debit and credit cards. He said that “Customer acquisition costs, either through search engines or TV advertising, cannot and will never justify the razor thin margins produced by merchants with infrequent volumes and extremely high attrition.”

The NFC technology community has also been left blinking in surprise, as it had been looking toward that company to propel forward its adoption, particularly after the iPhone 5 was released without its capabilities.

Bergeron described the mobile payments program at VeriFone as a failure and is now causing many of the other players in the industry to take a second look at their own potential for profitability. This is particularly the case after the CEO questioned the ability of the environment to be profitable at all. The company has announced that all of its assets from that space will now be sold off.

He explained that he felt it is possible to see similar thoughts among the competition as their businesses models are shifted toward wallets services. It is his belief that the only mobile payments players who will be able to survive “this fundamentally challenging business model” will be those who are capable of offering micro merchants other services, as well.

Participants in an online survey reveal that they believe a cashless future is on the way.

Harris Interactive has released the results of its most recent survey, which has indicated that among adults in the United States, well over half believe that mobile payments will replace both cash and credit card based transactions at some point down the road.

Over 30 percent of the respondents said that the replacement would occur in five years from now.

The survey was performed online from November 14 through 19, with the participation of 2,383 respondents. Each were adults and they all lived in the U.S. When asked about the replacement of credit cards with mobile payments, the 66 percent believed that this would one day occur. That said, only 32 percent of the participants felt that this would occur within the next half decade.

The mobile payments survey also looked into the replacement of cash with smartphones.

The results of the poll showed that the participants felt nearly the same way about cash as they did about credit cards in terms of their replacement by mobile payments technology. In fact, 61 percent of the respondents said that they felt that one day, we would no longer use cash because of our smartphone devices. However, only 26 percent believed that this will have happened in five years’ time.

The survey findings identified several different reasons that can explain the hesitation that consumers have regarding the use of mobile payments transactions. These can help to explain why adoption of the technology has been as slow as it has.

The survey presented the participants with a number of different reasons from which they could choose, in order to explain why they would hesitate to use mobile payments for making purchases. The answers included – but are not limited to – the following:

• Over half (52 percent) are content with their credit cards and/or cash so they don’t see a need to change.
• 51 percent expressed concerns over mobile security in terms of financial and private data.
• Half didn’t own a smartphone.
• 40 percent didn’t trust the security of entering mobile payments information into a merchant’s device.