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With the traditional lines between e-commerce and the point of sale blurring, a Boston-based startup on Tuesday introduced a mobile wallet that lets consumers shop at multiple stores, both brick-and-mortar and online, and skip past checkout lines.
AisleBuyer LLC’s app, which works on iPhones and handsets running Google Inc.’s Android operating system, has been available since August with technology that allows consumers to scan products, pay for them in the aisle, and walk out the door. But the latest upgrade lets shoppers use the same app to buy from both brick-and-mortar and online merchants. And while previously the app was limited to stores belonging to a single sponsoring merchant, it now lets shoppers buy from multiple merchants using the same payment credentials.
AisleBuyer relies on bar-code scanning to download product information, reviews, offers and incentives, and other information to shoppers in the store. Once they’re ready to pay, shoppers use credit or debit card credentials stored in the app’s digital wallet. They get a receipt sent to their phone that they can display to store personnel as they go out the door. With the introduction of e-commerce capability, users who can’t find merchandise in stock can tap the same wallet to buy from the merchant’s Web site and arrange home delivery. “We integrate into the point-of-sale system of each chain,” Andrew Paradise, AisleBuyer’s founder and chief executive, tells Digital Transactions News.
To automate data entry, the company last month introduced Card Capture, a system that lets app users scan their payment card using their smart phone’s camera. The technology captures the card number and expiration date from the image of the front of the card and enters it automatically in the app’s wallet. Users must enter the card-verification value, found on the reverse side, manually.
AisleBuyer, which was founded early in 2009, started with a four-store toy-and-baby-gear chain in the Boston area called Magic Beans. Paradise says his company has now signed agreements with merchants accounting for more than 19,000 locations, including two of the largest chains in the country. He says he cannot yet release any names. The two big chains, which account for the bulk of the new locations, will launch the technology by February, he says.
AisleBuyer is among a recent crop of startups in mobile-payments to steer clear of near-field communication (NFC) technology, which relies on radio-wave transmissions to trigger transactions. FaceCash and MobilePay USA are other examples of recently founded in-store mobile-payments systems that eschew NFC. Many experts still think NFC will become the standard technology for point-of-sale payments with handsets. But on Monday, Square Inc., a San Francisco-based mobile-payments company founded late in 2009 by the co-founder of Twitter, announced new applications that let consumers tap a mobile wallet in a physical store by opening an app and giving the merchant their name.
While processors like PayPal have blurred the line between e-commerce and POS payments, AisleBuyer is also the first to marry the in-store and e-commerce shopping experience, using the smart phone as a platform. “They’re eliminating the distinction between online and off-line,” notes George Peabody, an analyst at Maynard, Mass.-based Mercator Advisory Group who follows emerging payments technology. “AisleBuyer is an example of what the future will look like.”
Still, the startup could run into some snags along the way to the future. For now, the card networks treat its transactions as card-not-present payments, which incur a higher interchange rate than card-present payments and are thus costlier for merchants. The company says this is more than offset by the offers, rewards, and other promotions its platform can deliver and by the shopping analytics it can produce. When a buyer scans a product but then puts it back on the shelf, for example, the system can deliver an offer for a competing product nearby. And Peabody says scanning quality with smart phones can be “quirky.” Also, he says, “if you’re scanning 30 or 40 items, it can lose its charm.”
But AisleBuyer’s technology may appeal to merchants looking for a way to attract new customers and keep existing ones, especially since it allows shoppers to place a store’s proprietary card in the wallet. Also, merchants sponsor the app, so shoppers identify it with the store. As more retailers are added, that could lead to some clutter on phone screens. AisleBuyer is investigating technology that would rely on one icon, or “meta app,” and use geolocation to change the name on the icon as users enter each new store.
Pricing for AisleBuyer isn’t yet settled. The company says it is working with merchants to determine pricing models.
Integration time for merchants using POS systems the company is familiar with is about six weeks. For those using other systems, it’s more like 10 to 12 weeks, the company says.
