A few days ago ‘Mobile Business’, one of the leading German news portals for such businesses, published an interview with Christian Deger, Managing Director of Sales and Business Development at payworks, about the mobile point of sale solutions offered by payworks and PAY.ON.
Cause of the contained detailed description of the payworks services we decided to translate the interview into English to make it available to all of you.
Following the interview:
Mobile Business: What does payworks do?
Christian Deger: We provide companies with all the necessary components to launch their own mobile point of sale solution. In addition to providing a white label app and the necessary hardware, we operate the technical infrastructure required to process mobile payment transactions securely and in accordance with regulations. Developers with their own apps are able to easily access our mobile payment backend via application programming interfaces.
Mobile Business: How does your latest Chip and PIN solution work?
Christian: Our Chip and PIN solution involves a payment application on a mobile device, such as a smartphone or tablet, which is connected wirelessly to a credit card reader with an integrated PIN pad. Together, these are used to process the transaction. After the payment has been triggered in the app, the card reader takes over: the reader directly encrypts the payment information on the device and sends them to the respective bank via our processing gateway. The payment data is only decrypted at the receiving end, following which the transaction is processed. After the successful completion of the payment, the mobile app receives a notification from the reader and the user can, for instance, receive an electronic receipt by entering their email address.
Mobile Business: What is the advantage over using traditional card acceptance terminals?
Christian: Traditional terminals are relatively expensive and not very flexible regarding implementation. It’s also often a highly convoluted process for retailers to get them into their stores in the first place. What makes many of the providers who develop solutions on the basis of our technology stand out is that they make initial uptake for retailers far simpler, they offer a transparent pricing structure and useful extra features such as analysis or loyalty functions, which are directly integrated into their apps.
Mobile Business: How are end customers able to authenticate themselves during the payment process?
Christian: Shoppers can authenticate themselves either by entering their signature on the smartphone’s touchscreen or by entering their card’s PIN on a certified PIN pad. It is not permitted to enter the card PIN directly on a smartphone or tablet touchscreen.
Mobile Business: How do you guarantee that the transaction and the end customers’ bank details are secure?
Christian: Security is the number one priority for all our solutions. In order to avoid the security risks associated with smartphones, bank details are directly encrypted on a certified card reader and only decrypted once they are received in a secure PCI-DSS certified environment. This means that transaction and bank details cannot be read or modified by viruses or rooted smartphones.
Mobile Business: Which debit and credit cards are currently compatible with your mobile solution?
Christian: Our solution allows for all credit cards (Visa, Mastercard, Amex, etc.) and corresponding local debit cards (Girocard in Germany) to be processed in accordance with regulations. Due to different local regulations, the technical implementation varies from country to country. For instance, in some countries outside Europe our solution is used with plug-in magnetic strip readers to process Visa transactions, which is currently not possible in Germany. Instead, a certified Chip and PIN solution is required.
Mobile Business: Which end devices is the app/solution available for? How much does it cost?
Christian: Our white label app is currently available for iOS devices, with an Android version coming soon. Our mobile payment SDK payworks.connect is already available for all major platforms, offering developers simple access to our processing infrastructure. This enables mobile payment solutions to be developed without the developers having to deal with too many questions about certification and security: we take care of that. Most of our customers make the app available for free download and make their money from transaction charges.
Mobile Business: What charges do retailers have to pay for each transaction?
Christian: Most providers only charge a transaction fee rather than a base fee. In Germany, all providers charge less than 3% of total transactions. In other countries, there are examples of retailers who pay a monthly flat rate for an unlimited number of transactions.
Mobile Business: Which standards and certificates does your mobile payment solution support?
Christian: Our recently launched Chip and PIN technology is compatible with all major standards used for standard card terminals. The hardware itself is certified in accordance with PCI-PTS (PIN transaction security), EMV Level 1 and EMV Level 2. PCI-P2PE certification (point-2-point encryption) ensures that the encrypted connection between the card reader and the prescribed hardware security module (HSM) conforms with regulations. The gateway through which transactions are routed is certified in accordance with PCI-DSS. Furthermore, additional tests must be carried out with the relevant banks for all accepted payment methods before retailers are allowed to implement the solution.
Mobile Business: Can you describe a short example implementation by a local customer?
Christian: One of our clients used our white label app at this year’s Oktoberfest in the Hippodrom and Käfer tents. The Oktoberfest retailers, who sell roses, feathered caps and stuffed animals to visitors, were kitted out with our payment app and card readers so they could take card payments directly at the tables. The retailers used to have to fetch a rented device from the till, which took a long time and was very inconvenient. The feedback on the new, flexible solution was therefore very positive. As a Munich based company, this implementation of our solution naturally was very special for us.
Payments through moblie :The cell phone has revolutionized the way that we operate and live our lives. Starting as a simple communication tool it has evolved into being our calendar, instant messaging device, camera, Internet browser and everything else you can think of. But did you know cell phones are primed to take over our primary payment vehicle as well? In countries such as Japan and Korea, it is already possible to pay for vending machine purchases, groceries and even airline tickets by using your cell phone.The latest trend in moblie payments is a new service from Paypal Mobile that even allows consumers to send payments to others, purchasing items from select retailers, or donating money to charities by punching a short code text into your cell phone. Services such as these give consumers the feel of a moblie wallet where cash, credit cards or even wallets are quickly becoming a thing of the past. But what are moblie payments and how do they work?Mobile payments is the process of using your cell phone to make everyday purchases that normally would would require cash or a credit card. Mobile payments are already becoming part of our lives when you think of current offerings like music, video, ringtones, online game subscriptions, wallpapers or any other digital good. However, despite this service reaching world-wide acclaim in developing countries and all across Europe it has yet to break into America. You would think in a country as hungry for instant gratification as we are this option would be a no-brainer, but the are a number of reasons why we have failed to embrace moblie payments.Mobile Payment Challenges:First off, changing the existing payment infrastructure in the United States would be an expensive enterprise, especially for merchants. Another problem is infrastructure support. Mobile payments cannot work if at least one party involved is not connected to the same back-end server that can be quite expensive to implement. Plus, in America people have much more access to personal computers and back accounts. In less developed countries, however, a person can use his or her cell phone for both of these services, making it a far more convenient technology. And one of the main reasons for the lack of moblie payment supremacy in the United States is poor reliability.Just like we have all experienced before, text messages can easily fail or messages can get lost altogether. Think if you were making a mortgage payment on your cell phone and it didn’t go through or the message was lost. Plus there is always the problem of slow connection speed. If your messages are moving slowly it could take hours for a transaction to go through causing delays that most people aren’t willing to accept. And probably one of the biggest concerns is security. What’s stopping someone from stealing your phone and going on a shopping spree and stealing all your money? Even with the protections of pin codes and fingerprint authorization, there is still a level of concern. However, it is fair to point out that moblie payment is in its infancy right now and still feeling its way out. But there is no doubt that it is definitely on the rise.The Pay OffMobile commerce, including moblie payments and moblie banking is predicted to grow exponentially in the years to come. According to the 2006 report, “Mobile Commerce: Dealing with the Devil in the Details,” moblie payments will be worth 55 billion in 2008.There are around 43.1 million moblie payment users currently and it is estimated to grow by 70 percent to 73.4 million by the end of 2009. According to global research firm, Gartner, there will be more than 190 million moblie users by the end of 2012.Mobile payments, although somewhat risky and unproven, without doubt has some serious advantages. The ability to pay utility bills, shopping bills, purchase movie tickets, insurance premiums, and not to mention the ability to perform bank transfers all with your cell phone is an exciting proposition. Once this technology tightens up on its security issues and becomes more safe and reliable, it will turn into a major 21st century convenience that is here to stay for the long term.