Cover Story: Annual Field Guide to Alternative Payments

Our Guide spotlights how mobile payments and digital currency drive payments innovation.

by John Stewart, Jim Daly, and Kevin Woodward

Alternative payment schemes are becoming almost too numerous to count. A few months back, one payments-industry veteran listed all the mobile wallets he knew of and came up with about 140 entries. Add to that the real-time electronic payment services and Bitcoin and other new virtual currencies, and you’ve got more ways to pay and more forms of money changing hands than does the Grand Bazaar of Istanbul.

Reflecting this bubbling activity, we’ve expanded our sixth annual Field Guide to 39 entries, up from last year’s 38. A full 12 listings are new. Some services are brand new. In other cases, such as the debit card version of Target’s REDcard, which uses the unconventional decoupled/ACH debit model, they’ve been around for a while but gained enough acceptance among consumers to warrant a mention.

Still others, such as Paydiant and Mitek Systems Inc.’s Mobile Photo Bill Pay, to name just two, are white-label services offered through processors and financial institutions under a plethora of brand names and are attracting many new consumer users.

And we can’t leave out Bitcoin and by extension lesser known new virtual currencies that hold a huge amount of potential to change the payments scene despite Bitcoin’s well-documented travails.

To make way for the new entries, we dropped listings for some payment services that over the past year either were eliminated (BillFloat, for example), substantially changed by the their sponsors, or had been listed for years while building only small user bases. We also eliminated the formerly separate listings for PayPal affiliates Bill Me Later and Braintree Payment’s Venmo service.

Digital Transactions generally defines an alternative-payment system as any network or consumer interface (a mobile app, for example) that displaces the Visa/MasterCard/AmEx/Discover networks (seen as one traditional system for this purpose), enables payments in a way that stands apart from that network (even if it ultimately uses it), and/or stands between that network and the consumer in an important way. We emphasize consumer-facing payment systems, but of course many, if not most, of the systems profiled here market themselves to merchants to maximize acceptance of their products.

Information for the listings comes from news reports over the past year, company Web sites and spokespersons, and financial filings in a few cases. We list pricing for the merchant and consumer when it is publicly available. The “Year Founded” line refers to the year the particular service was founded, not the parent company, except in those cases where the two coincide.

Acculynk/PaySecure

Parent: Acculynk Inc.

Headquarters: Atlanta

Year Founded: 2008

Web site: acculynk.com

Field Notes: Acculynk’s technology allows consumers to make PIN-debit transactions on their PCs and mobile devices. The company’s PaySecure technology uses a so-called floating PIN pad that appears on the screen at checkout to let users enter their PIN, and its PayLeap gateway makes the online debit service available to small and mid-sized merchants. The company also offers the Payzur person-to-person payments service. Acculynk has already forged ties with numerous U.S. electornic funds transfer networks and payment processors. In January the company obtained an important European patent for its online PIN-authentication system, and in March, Acculynk struck a deal with e-commerce services provider Ecwid Inc. to give Ecwid’s 400,000 retailers in 175 countries access to PayLeap. On the security front, Acculynk added card-number tokenization to its PIN pad, a move the company says will ease online and mobile merchants’ burdens in complying with the Payment Card Industry data-security standard (PCI).

Amazon Payments

Parent: Amazon.com Inc.

Headquarters: Seattle

Year Founded: 2007 (Amazon Flexible Payments Service)

Web site: payments.amazon.com

Pricing: 1.9% 2.2%, 2.5% or 2.9% of the sale, all plus 30 cents, depending on transaction size. Micropayments (below $10): 5% plus 5 cents

Field Notes: A new addition to the leading Internet retailer’s lineup of payment services for its own customers and e-commerce merchants that use Amazon Payments is “Login and Pay With Amazon,” which the company introduced in October. The system enables a consumer who has an Amazon account and is shopping at a third-party site that uses Amazon Payments to sign in and pay for a purchase with just a few clicks by using his or her Amazon credentials. The service is designed for tablets and smart phones as well as PCs. Software developers can implement Login and Pay on existing Web sites by using a set of widgets and application programming interfaces (APIs). Amazon has 215 million active account holders, so finding shoppers with Amazon credentials shouldn’t be too hard for Amazon Payments merchants. One payment option Amazon reportedly won’t offer is Bitcoin. But Amazon chief executive Jeff Bezos reportedly wants to invest more in payments to exploit the opporunities created by a customer base exceeding 200 million, according to the Re/code technology news Web site.

Apriva Wallet

Parent: Apriva Inc.

Headquarters: Scottsdale, Ariz.

Year Founded: 2012

Web site: apriva.com

Pricing: Determined by acquirers

Field Notes: Fueled by growth in mobile-payment acceptance, cashless vending, and its gateway service, wireless payments provider Apriva marked $9.55 billion in transactions through its payment gateway last year, up 17% from $8.14 billion in 2012. In addition to its mobile wallet and wireless point-of-sale terminals, Apriva also offers AprivaPay Plus, its mobile POS product for smart phones and tablets. As of February, two major banks were using the service under their own brands, with 15 others selling it under the private-label brands of Apriva resellers. Apriva also sells the service through approximately 900 merchant acquirers and independent sales organizations. This spring, Apriva was expected to unveil an independent software vendor program that will provide developers with access to more than 30 payment providers via Apriva’s gateway.

Bitcoin

Parent: None

Headquarters: None

Year Founded: 2009

Web site: bitcoin.org/en/

Pricing: Free to consumers; merchant cost varies but sometimes free or generally much lower than conventional payment systems

Field Notes: Once the domain of geeks, Bitcoin burst into the national consciousness in 2013 and early 2014. Many of the headlines were negative. Among the highlights, authorities, suspicious of the virtual currency’s anonymity since the beginning, busted a major underground market called Silk Road that dealt only in Bitcoin. Mt.Gox, a major Bitcoin exchange, lost $450 million worth of Bitcoin and went bust, though it later claimed to have found $116 million of the missing crypto-cusrrency. Newsweek magazine outed Bitcoin’s mysterious purported founder, a Japanese-American who denied any connection to it. Bitcoin’s price swung widely and the IRS declared Bitcoin wasn’t a currency and would be taxed like property. But there was good news for Bitcoin’s devotees, too, particularly its growing merchant acceptance. Overstock.com signed on and issued enthusiastic reports about customer response. Lord & Taylor became an indirect acceptor through an Israeli app developer. Square Inc.’s online Square Market added a Bitcoin payment option, and startup PayStand offered Bitcoin acceptance at no cost to online merchants. Meanwhile, the idea of digital currencies took further root, with new systems such as Dogecoin and Litecoin appearing on the payments horizon.

Cardfree

Parent: Cardfree

Headquarters: San Francisco

Year Founded: 2012

Web site: Cardfree.com

Field Notes: Headed by a team of payments and mobile-application industry veterans, CardFree spent the past year building relationships with merchants who will provide its mobile app to their customers in order to deliver loyalty and payment services. The company uses one-time authentication codes to protect transactions and customer data. New users include quick-service restaurant companies Checkers Drive-In Restaurants Inc., owner of the Checkers and Rally’s brands, and Sonic Corp., another drive-in chain. In March, Cardfree announced a deal with tech-oriented independent sales organization Mercury Payment Systems under which Cardfree will bundle Mercury’s payment-processing services with its own mobile-commerce and loyalty services. Mercury co-founder Jeffrey Katz is Cardfree’s chairman. Katz in February assigned to Cardfree a patent he received for an integrated reservation, payment pre-authorization and management system that can be tied to a merchant’s point of sale.

Check

Parent: Check Inc. (formerly Pageonce)

Headquarters: Palo Alto, Calif.

Year Founded: 2008

Web site: check.me

Field Notes: Check is one of several startups to appear in the past few years aiming to make paying bills through mobile devices easier. The original Pageonce application was one of the first 500 apps for Apple Inc.’s iPhone. Now known as Check, the app most recently was redesigned in December. It offers alerts about bills due and new interactive features enabling users to add and pay bills easier and view data. Check added an Android version in January. Check claims 10 million consumers have downloaded its app. Billers enabled for payment through Check number in the “thousands,” according to the company’s Web site, and include public utilities, banks, credit unions, credit card issuers, and phone companies.

Chirpify

Parent: Chirpify

Headquarters: Portland, Ore.

Year Founded: 2011

Web site: chirpify.com

Pricing: Merchants pay 2.9% plus 30 cents; $2,500 per action tag per month

Field Notes: A processor for payments via social media sites like Twitter, Chirpify in 2013 broke into TV, billboards, and other venues. Consumers can use marketers’ so-called action tags to request information or actually pay for items they see in commercials and ads. The 20 or so brands using the service as of early March included Adidas, AT&T, Forever 21, Lenovo, Sprint, and TaylorMade.

Cimbal

Parent: Cimbal Inc.

Headquarters: Palo Alto, Calif.

Year Founded: 2010

Web site: cimbal.com

Pricing: Variable, depending on service

Field Notes: Cimbal proffered a novel twist on so-called 2-D barcodes when it first appeared on the mobile-payments scene by having the merchant or person accepting payment display the barcode, with the purchaser scanning it with a phone rather than the other way around. Cimbal says its application works with existing point-of-sale systems and that merchants need not install new hardware. Cimbal, which works with a major data-analytics distributor and payment processor, enables local merchants to deliver personalized offers to consumers when they enter a store. Consumers can buy online and in physical stores using the Cimbal app, funding their purchases with credit cards, debit cards, loyalty and prepaid cards, and bank accounts.

clearXchange

Headquarters: Charlotte, N.C.

Parents: Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Capital One Financial Corp.

Year Founded: 2011

Web site: clearxchange.com

Pricing: At discretion of member banks

Field Notes: After debuting to great fanfare three years ago because of its sponsorship by three mega-banks accounting for half of all U.S. online accounts, not much news came out of the clearXchange person-to-person payments service in 2013. ClearXchange has moved slowly from the beginning; Wells went live first in 2012 followed by BofA. Chase still isn’t live, but a notice on the clearXchange Web site says the service is “coming soon to Chase customers.” ClearXchange got a big boost this February when the massive credit card issuer and banking company Capital One Financial Corp., with 65 million consumer accounts, joined as the fourth owner. Colorado’s FirstBank joined in 2013 but is not an owner. To use clearXchange, a sender using a PC, laptop, or mobile device needs only to enter the recipient’s email address or mobile-phone number. If the recipient’s account is part of the clearXchange network, the payment will be deposited to her account, assuming she has associated her email address or phone number with the bank account. As of early this year, none of clearXchange’s banks charged users for the service. ClearXchange, however, charges the banks an undisclosed fee.

CloudPay

Parent: New Media Insight Group Inc.

Headquarters: Phoenix

Year Founded: 2010

Web site: NewMediaInsights.com

Pricing: 0.5% for merchants

Field Notes: The CloudPay mobile wallet hopes to distinguish itself among the plethora of mobile wallets with a low price for merchants. Merchants pay only 0.5% per transaction, a markedly lower rate than traditional pricing that might be as high as 2.9% using discount rates that assess interchange and other fees. That’s because CloudPay is akin to a branded loyalty card, the company says, and transactions are treated as payments between two mobile-wallet accounts. To use the service, merchants must set up an account to accept CloudPay. They also need a WiFi-enabled smart phone or tablet. Consumers must set up a mobile-wallet account with New Media Insight’s mCard service. Consumers enroll a card on file with CloudPay. Charges are made against that card when they make purchases. Consumers also can set per-transaction maximum amounts. New Media’s focus is not on making money from each transaction, but helping merchants acquire new customers and retain existing ones, the company says.

Coin

Parent: Coin

Headquarters: San Francisco

Year Founded: 2012

Web site: onlycoin.com

Pricing: $100 per Coin; $50 if ordered early

Field Notes: Coin, whose soft launch in November generated enormous buzz in the payments business, is taking orders for a plastic card with a magnetic stripe that can hold credentials for up to eight payment or loyalty cards. Users select which card to use by pressing a button on the card. A display on the card shows the last four digits of the chosen card’s account number, its expiration date, and its card-verification value. The card, which has the same dimensions as a standard credit card and sells for $100, comes with a mobile app and a card reader that links to a smart phone. Users load their cards into the app via the card reader while also using the phone’s camera to take pictures of the cards. The app loads the card data into the Coin card via Bluetooth low energy, a Bluetooth variant that can link devices without sapping battery power as quickly. When the card has been out of range of the phone for a period of time, its power shuts down and it becomes unusable. Early adopters pay $50 per Coin card. Those who buy after the expected summer launch will pay list price of $100. One drawback: Coin does not yet support EMV.

Dwolla

Parent: Dwolla Inc.

Headquarters: Des Moines, Iowa

Year Founded: 2008

Web site: dwolla.com

Pricing: Free for transactions of $10 or less; transactions more than $10 cost 25 cents, charged to the receiver

Field Notes: Dwolla’s big move in recent months was its October introduction of Credit, a service that lets users tap a credit line and grants instant funds access to merchants. Potentially revolutionary is that Dwolla’s regular pricing applies to Credit transactions, drastically undercutting conventional credit card interchange costs for merchants. Alliance Data Systems Corp.’s Retail Services unit owns and funds the receivables. Besides cutting costs for merchants, the service also furthers a long-time Dwolla goal of speeding up funds availability for receivers. Adoption of Dwolla’s FiSync system, which was intended to move money between bank accounts and Dwolla accounts more expeditiously, has been slow.

EasyPay

Parent: Apple Inc.

Headquarters: Cupertino, Calif.

Year Founded: 2011

Web site: apple.com

Field Notes: While speculation abounds about Apple’s intentions in the payments business, the tightlipped computing giant makes do with products like its Passbook wallet, a slew of NFC patents, and the less-noted EasyPay, a service that lets customers pay and check out of Apple’s 400-plus physical stores using their mobile phones without dealing with a clerk. Part of the Apple Store app, EasyPay users scan a product barcode to charge the item to the payment card they’ve linked to their iTunes account. For security reasons, EasyPay only works when buying accessories (not iPhones and computers), but lending it considerable power are the nearly 600 million iTunes accounts now held by Apple, more consumer accounts than either PayPal or Amazon.

Google Wallet

Parent: Google Inc.

Headquarters: Mountain View, Calif.

Year Founded: 2011

Web site: google.com/wallet

Pricing: No fee to accept Wallet beyond established card-acceptance costs; consumers who use credit or debit cards to send money or to reload their Wallet balance pay 2.9% with a 30-cent minimum

Field Notes: Online search giant Google made two key moves last year to breathe new life into its struggling Wallet, one much-celebrated and the other easily overlooked. Its much-celebrated move was to launch the latest version of its Android mobile operating system, known as KitKat, with a feature called host card emulation (HCE). With HCE, mobile-wallet purveyors using near-field communication (NFC) technology can bypass the phone’s secure element (along with telco rental fees) and control mobile payments from a cloud configuration. This frees wallet companies from dependence on mobile carriers and opens up big new opportunities for mobile payments. Google’s less-noted move was to link Wallet to the Gmail service, allowing users to send each other money via cards or balances stored in their Wallet accounts. To use the feature, the sender hovers over the “paper clip” icon within Gmail, clicks on a dollar-sign icon, specifies an amount, and clicks on “send.” The last number available for the number of Gmail users was 425 million, as of June 2012. Also, after ditching the idea of a physical Google Wallet card in May, Google rolled out the product six months later. The card accesses the user’s Wallet balance, which can be funded from a bank account, a credit or debit card, or a Gmail transfer. It can be used wherever MasterCard is accepted.

Isis

Parents: AT&T Mobility, T-Mobile USA, Verizon Wireless

Headquarters: Dallas

Year Founded: 2010

Web site: paywithisis.com

Pricing: merchants pay no fee beyond ordinary card-acceptance cost; issuers pay an undisclosed fee to be included in the wallet

Field Notes: Backed by three powerful mobile carriers, Isis rolled out its service nationally late last year after running a pilot in Austin, Texas, and Salt Lake City. Isis also launched a new version of its mobile app, which relies on near-field communication (NFC) technology to communicate with point-of-sale devices. The new app allows users to pay bills, send money, add funds to stored cards, and log into the online site for the card with a single sign-on. The app also stores loyalty cards and allows the user to designate one to be included with a transaction to pick up eligible points. Similarly, the app displays offers received, allowing the user to pick one to accompany a designated payment card to earn a reward. Participating issuers include American Express Co. (including Serve) and JPMorgan Chase & Co. Acceptance is limited to merchants that can handle contactless payment, and usage depends on phones equipped with NFC chips, though the carriers behind the venture have been busily enabling devices. Merchant and consumer adoption have lagged for Isis, as with all mobile wallets, and the venture faces stiff competition from the likes of Google Inc. and the yet-to-launch MCX mobile-payments consortium backed by Wal-Mart Stores Inc. and a number of other major merchants.

LevelUp

Parent: SCVNGR Inc.

Headquarters: Cambridge, Mass.

Year Founded: 2011

Web site: thelevelup.com

Pricing: 1.95% of sale

Field Notes: LevelUp depends on quick-response (QR) codes, which consumers receive when they sign up and link a credit or debit card to the free app, which works with Android, iPhone, and Windows Phone devices (the separate LevelUp card has been discontinued). LevelUp claims more than 1 million users have signed up for the app. To perform transactions, they scan their unique QR code at accepting merchants, which number 5,000-plus locations. Merchants pay 1.95% for transactions, reduced marginally in April from the 2% LevelUp formerly charged. The fee for promotions, which is a key component of LevelUp’s business plan, is 25 cents for each dollar redeemed. A white-label version of the app is also available to interested merchants and developers.

Loop

Parent: LoopPay Inc.

Headquarters: Burlington, Mass.

Year Founded: 2013

Web site: LoopPay.com

Field Notes: Loop consists of a smart-phone app and an accessory to transfer credit and debit card track data to the app. It works like this: After downloading the free Loop Wallet from Apple Inc.’s iTunes store, the user connects a Loop device to an iPhone. An Android app is expected in the second quarter. Currently, Loop sells cases for the iPhone 5 and 5S for $99, and a fob that plugs into an audio jack for $39. The next step for the consumer is to create an account and load his payment, loyalty, and gift card data into the app. That is done by swiping a magnetic-stripe card through the reader on the fob. The case comes with a separate reader. To make a transaction, the consumer opens the app and selects a card. Then she places the Loop accessory, whether it’s the case or the fob, near the payment terminal and presses a button on the accessory to initiate a payment. The accessory creates a magnetic field that can be read by any magnetic-stripe reader in payment terminals. The signal emulates the same magnetic-field charge as when a mag-stripe card is passed through a reader.

LoopedIn

Parent: PXT Payments

Headquarters: Andover, Mass.

Year Founded: 2012

Web site: AreYouLooped.In

Field Notes: LoopedIn is a payment system that connects consumers with their friends and merchant locations. The LoopedIn app, available for iOS and Android smart phones, uses a PIN-based system to authorize payments to merchants. It is not a mobile wallet, LoopedIn says. Instead, consumers create a profile in the app and load funds from either a bank account of credit or debit card. Payments are made with the funds loaded in the LoopedIn account. To make a payment, the LoopedIn user provides the cashier with the phone number registered to the LoopedIn account. The cashier then sends the transaction from the merchant’s LoopedIn app, which prompts an approval request within the app on the consumer’s phone. The consumer enters the PIN to pay and receives an electronic receipt in the app. Currently, LoopedIn’s Web site lists 93 merchants in the Boston area that participate in its payment scheme. Consumers can use the app to search for offers from these merchants.

Mobile Checkbook

Parent: VerifyValid LLC

Headquarters: Grand Rapids, Mich.

Year Founded: 2014

Web site: verifyvalid.com/mobile

Pricing: 50 cents per check

Field Notes: With the Mobile Checkbook app, launched in March, a user can create a check image and email a link to it to the payee, who can retrieve it and print it out. Recipients can deposit the printout or turn it back into an image using their bank’s remote-capture app. They can also leave the image as is and request that VerifyValid deposit the item for them. With image exchange, payments can often be cleared the same day. Another advantage is that checks, unlike other payment methods, are almost universally accepted. The Mobile Checkbook process comes close to the Electronic Payment Order envisioned by the Federal Reserve Bank of Chicago and others back in 2010, with which users could create and send check images to each other via smart phones.

Mobile Photo Bill Pay

Parent: Mitek Systems Inc.

Headquarters: San Diego

Year Founded: 2012

Web site: miteksystems.com

Pricing: Banks, other channel partners pay software-licensing fees to Mitek and set retail pricing

Field Notes: Best known for its Mobile Deposit software that enables consumers to deposit checks by taking pictures of them with their smart phones and uploading the images via mobile-banking applications, Mitek is branching out as uses for its imaging technologies expand. Mobile Photo Bill Pay is the company’s name for software than lets smart-phone users snap pictures of paper bills for payment via banks’ mobile bill-pay services. As of Dec. 31, 20 financial institutions had licensed Mobile Photo Bill Pay and 13 were live with the service. Channel partners include processor Allied Payment Network Inc., whose Picture Pay service for its financial-institution clients uses Mitek’s technology. Mitek recently launched Mobile Photo Payments, a similar service for direct billers. Meanwhile, more than 2,000 banks and credit unions have deployed or are signed on to implement Mobile Deposit, including the 10 largest U.S. banks.

Mocapay

Parent: Mocapay Inc.

Headquarters: Denver

Year Founded: 2006

Web site: mocapay.com

Field Notes: One of the earliest entrants in mobile payments, Mocapay creates mobile (iPhone and Android) and Web-based apps that merchants can brand themselves and offer their customers. The Mocapay wallet works with all major card brands as well as loyalty and gift cards, and is compatible with barcode scanning as well as near-field communication. Barcodes represent one-time tokens of users’ card credentials, which are stored in a cloud configuration. Merchants include frozen-yogurt purveyor Yumilicious and restaurateur Lettuce Entertain You.

Mozido

Parent: Mozido Inc.

Headquarters: Austin, Texas

Year Founded: 2005

Web site: mozido.com

Field Notes: Mozido earlier this year added more payments options for its white-labeled mobile apps through an agreement with merchant processor Securenet Payment Systems. And, late last year, the company announced a person-to-person payment service that will allow users to pay others nearby using Bluetooth Low Energy. Basic services include remittances (domestic and international), bill pay, and mobile airtime top-up, with payments tied to payment or prepaid cards or bank-account credentials stored in the user’s wallet. An agreement with MoneyGram facilitates remittances. Additional services include in-store delivery of location-based promotions and mobile point of sale for merchants. Mobile payments work with barcode and NFC terminals.

Openbucks

Parent: Openbucks Corp.

Headquarters: San Jose, Calif.

Year Founded: 2011

Web site: Openbucks.com Pricing: Consumers pay no fees. Merchants pay an undisclosed fee to accept Openbucks

Field Notes: Openbucks operates a gift card payment network that enables consumers to use physical gift cards to buy digital content at what the company says are hundreds of online gaming and other Web sites. Target customers are teenagers and other consumers who don’t have credit cards or have them but don’t want to use them online. Online merchants pay a flat percentage of the transaction to Openbucks. Consumers can buy gift cards from Subway, CVS/pharmacy, and Circle K convenience stores to use them on e-commerce and gaming sites of participating merchants, such as Seafight.com and World Golf Tour. To use the gift cards online, consumers select the Openbucks payment option on a site and enter the card number and PIN printed on the card.

PayByPhone

Parent: PayPoint PLC

Headquarters: New York City

Year Founded: 2001

Web site: paybyphone.com

Field Notes: PayByPhone works with 1,000 parking clients and has 7.5 million registered users, a number that is growing by 100,000 users a month. Cumulatively, the company has handled 120 million mobile-parking payments. In one of its longer-term projects, PayByPhone is operating an NFC system for the San Francisco Municipal Transportation Agency in which it has affixed contactless stickers to some 31,000 city meters. The system went into operation 21 months ago and was, at the time it started, the largest NFC installation in the world, company executives say. To use PayByPhone, drivers register with the system by entering information about themselves, the card they are using, and their vehicle’s license-plate number. Once registered, they can pay for parking by calling up the wallet, entering the location number assigned to the meter, and the amount of time they want and clicking a “pay” button. Users receive reminder texts as the expiration time approaches, allowing them to top up time on the meter remotely. Users can store cards from any of the major brands in the wallet. Next, the company is investigating how to serve up offers for businesses near clients’ parking lots.

Paycloud

Parent: SparkBase Inc. Headquarters: Cleveland

Year Founded: 2009

Web site: Paycloud.com

Pricing: Merchants pay a one-time fee of $299 and a $60 monthly fee. Consumers pay no fees

Field Notes: Paycloud is a software-based loyalty system that enables small businesses to offer rewards and gift card programs to their customers who carry iPhones or Android smart phones. Consumers can enroll in a loyalty program on the Paycloud network through a merchant’s plastic loyalty card or the Paycloud mobile app. They redeem points or rewards by tapping their mobile device when it displays a Paycloud-generated barcode at the merchant’s Paycloud sensor or tablet computer. In addition to using the app to manage a Paycloud account, consumers also can use a Web site. There, they can add loyalty cards, and connect them to Apple’s Passbook feature on iOS devices. Passbook enables consumers to view their loyalty cards from the lock screen without having to open the loyalty app itself.

Paydiant

Parent: Paydiant Inc.

Headquarters: Wellesley, Mass.

Year Founded: 2010

Web site: paydiant.com

Pricing: Per-transaction and per-user fee; amounts not disclosed

Field Notes: Paydiant is the mobile app you never heard of, and the company wants things to stay that way. It remains in the background while its clients—including the giant Subway sandwich chain and the fledgling MCX mobile-payment venture controlled by some of the nation’s biggest merchants—brand its technology, which relies on quick-response codes at the point of sale to trigger payments and loyalty transactions. Paydiant’s wallet doesn’t store any payment credentials. Instead, users log in on the app, select their payment method, and scan a one-time transaction ID displayed at the point of sale. Paydiant is expanding to ATMs, as well, through a deal with ATM maker Diebold Inc. In this arrangement, a user can log into the app to set up a cash withdrawal. Later, at the ATM, he scans a QR code displayed on the ATM screen to complete the transaction.

PayPal

Parent: eBay inc.

Headquarters: San Jose, Calif.

Year Founded: 1998

Web site: paypal.com

Pricing: For payment acceptance within the U.S., top rate, for up to $3,000 in monthly sales, 2.9% plus 30 cents; for PayPal Here, 2.7% for card swipes and 3.5% plus 15 cents for manually entered transactions; for person-to-person payments in the U.S., 2.9% plus 30 cents when funded with a credit or debit card; micropayments (under $10), 5% plus a nickel

Field Notes: PayPal’s biggest development in recent months may well have been an event that had nothing to do with payments. Its parent, eBay, rebuffed a determined effort by activist investor Carl Icahn to have eBay spin off the 16-year-old payments unit. EBay argued it benefits from payments data generated by PayPal and PayPal benefits from handling payments on eBay’s marketplace. Meanwhile, eBay’s top management admitted PayPal’s ambitious expansion into brick-and-mortar stores has moved more slowly than it had hoped. This effort has been partially hampered by the refusal of a major processor, First Data Corp., to handle PayPal transactions for its merchants. But PayPal’s mobile business has gone gangbusters, with 2013 volume representing a near doubling from the $14 billion the company recorded in 2012 and amounting to 45 times the volume posted in 2010. Volume from mobile devices is now nearing 20% of volume overall. Mobile business was helped significantly by eBay’s $800 million acquisition in September of Braintree Payments Solutions LLC and its Venmo unit. Braintree was paired with PayPal in a strategy first seen with eBay’s 2008 acquisition of online transactional credit provider Bill Me Later.

PayWithMyBank

Parent: eWise Group Inc.

Headquarters: Redwood City, Calif.

Year Founded: 2013

Web site: paywithmybank.com

Pricing: 0.90% + 30 cents for merchants; $1 for billers

Field Notes: eWise operated the switch for automated clearing house oversight body NACHA’s Secure Vault Payments initiative intended to bring ACH credit payments to the Web. Little has been heard of SVP in the past year. Meanwhile, eWise began testing its own online ACH payments service called PayWithMyBank, which the company says is easier for consumers to use than other Internet-based payment systems and cheaper for merchants to accept than PayPal or credit cards. Consumers use their online-banking credentials and don’t leave a merchant’s or biller’s site. The service uses an ACH debit model, which eWise says is easier for merchants to implement than ACH credits. The most prominent acceptor listed on PayWithMyBank’s Web site is United Way Worldwide.

People Pay

Parent: Fidelity National Information Services Inc. (FIS)

Headquarters: Jacksonville, Fla.

Year Founded: 2013

Web site: FISGlobal.com

Field Notes: People Pay—the name FIS has given its person-to-person payment service—is built on the PayNet network the company introduced in 2012 to offer real-time settlement for various non-card payments. Using PayNet, People Pay can process transactions through NYCE, the electronic funds transfer switch owned by FIS that links financial institutions, including those that aren’t otherwise FIS clients. It can also rely on core-banking connections in cases where the banks involved are FIS clients. Users send payments through their bank’s online-banking system using the recipient’s email address or mobile-phone number. The recipient receives a text or email with instructions on how to retrieve the money. Financial institutions can set payment amount limits.

Popmoney

Parent: Fiserv Inc.

Headquarters: Brookfield, Wis.

Year Founded: 2009

Web site: Popmoney.com

Pricing: Set by financial institutions. Senders on popmoney.com pay 95 cents per transaction. No fee to recipients

Field Notes: Bank processor Fiserv in 2011 acquired CashEdge Inc., which had launched the person-to-person payment service Popmoney, and in 2012 relaunched it in combination with its own ZashPay service, all under the Popmoney name. In 2013 came the Instant Payments feature, which gives recipients access to their money in less than a minute. Popmoney Instant Payments relies on debit-network clearing. The faster money movement is possible because of Fiserv’s ownership of the Accel debit network and an agreement forged with First Data Corp.’s Star network to handle Instant Payments transactions. Currently, more than 2,100 financial institutions offer Popmoney, with 307 signed in 2013. TD Bank and First National Bank of Pennsylvania are among the most recent to offer Popmoney to their customers. Fees vary, Fiserv says, with some financial institutions offering Popmoney at no cost to consumers. Though Fiserv would not release transaction volume, it says Popmoney transactions almost doubled from 2012 to 2013.

PowaTag

Parent: Powa Technologies Ltd.

Headquarters: London

Year Founded: 2014

Web site: PowaTechnologies.com

Field Notes: PowaTag identifies products using a smart phone’s camera and microphone to detect special cues embedded in print displays, television commercials, or online using the PowaTag watermark. The impetus for PowaTag is to reduce the percentage of abandoned shopping carts online and to increase purchase amounts in stores.

Qwick Codes

Parent: MagTek Inc.

Headquarters: Seal Beach, Calif.

Year Founded: 2012

Web site: QwickCodes.com

Field Notes: Addressing consumer concerns about mobile-payment security is key to Qwick Codes’ marketing strategy. The app generates a one-time-use token that enables consumers to make in-store purchases by scanning a 2D Qwick Codes barcode on their phone at the point of sale or online by entering their eight-digit Qwick Code at checkout. Users can also make ATM withdrawals by selecting the Qwick Codes option, then entering their Qwick Code number and PIN, which eliminates the threat of ATM skimming. To make online purchases at participating merchant sites, consumers select MagTek’s QwickPay payment option and enter the eight-digit PIN. This can reduce the number of keystrokes a consumer has to enter. To add a card to the Qwick Codes wallet, consumers must swipe the card using an available card reader from MagTek. This is required to reduce the possibility of card skimming, MagTek says.

REDcard

Parent: Target Corp.

Headquarters: Minneapolis

Year Founded: 2007

Web site: Target.com

Field Notes: Introduced in 2007 as the Target Check Card and rechristened the Redcard in 2010, this decoupled debit scheme entices consumers with a 5% discount on purchases made with the card. Redcard users also receive free shipping on Target.com orders and an additional 30 days for returns. The PIN-protected card was not affected by the data breach Target announced in 2013. Redcard debit transactions, which accounted for 11% of Target’s store sales in 2013, use the automated clearing house system. That’s an increase from 7% in 2012 and 3% in 2011. Because it uses the ACH, Redcard transactions are cheaper to process than branded credit and debit cards. Target also offers a store-branded credit version of Redcard.

SelfPay

Parent: Digital Retail Apps

Headquarters: Toronto

Year Founded: 2013

Web site: DigitalRetailApps.com

Field Notes: SelfPay enables consumers to pay for merchandise while standing in a store aisle and leave without stopping at a cash register. SelfPay supports cards carrying the MasterCard, Visa, Discover, and American Express brands. It recently finished an integration to enable PayPal acceptance. The app presents only the merchant’s accepted payment methods once the consumer has been located in store. After recognizing the consumer inside a store, the app displays a retailer-branded screen, which unlocks the capability to make a purchase. The user scans either the Universal Product Code or a barcode generated by the retailer’s point-of-sale system for items she is interested in and SelfPay displays the in-store price and product description, also pulled from the retailer’s POS system. The shopper then adds the item to her cart, selects a payment method, and enters a SelfPay PIN. The transaction is routed to the merchant’s payment processor. SelfPay is integrated into the Vend, LightSpeed, and Beanstream POS systems, with more coming. The company also is creating a reseller program.

Square Wallet

Parent: Square Inc.

Headquarters: San Francisco

Year Founded: 2011

Web site: SquareUp.com/wallet

Field Notes: The Square Wallet app lets consumers pay in stores merely by stating their name at the cash register. Consumers open the app and check in with the store when they walk in. When they’re ready to check out, they say their name and that they’re paying with Square Wallet. The cashier brings up a screen showing the user’s photo to authenticate the user, who then walks out with her goods. The app charges a pre-loaded card automatically. Users can also use an auto-check-in feature for places they shop at regularly. The app also locates nearby businesses that accept the app and stores receipts and loyalty cards. Square is mum about how many locations accept its wallet, which works with iPhones, though the number includes more than 7,000 Starbucks stores.

WU Pay

Parent: The Western Union Co.

Headquarters: Englewood, Colo.

Year Founded: 2005

Web site: westernunion.com/wupay/

Pricing: 1% or 2% of the transaction online; $2.95 to $6.95 service fee at Western Union locations

Field Notes: Western Union’s WU Pay service is based on the e-Billme online-payment platform that the wire-transfer market leader bought in October 2011. Shoppers in the U.S. can use WU Pay to pay for online purchases from their own bank accounts or in cash at Western Union’s 47,000 domestic agent locations. Customers using WesternUnion.com for money transfers also can use WU Pay. The service leverages Western Union’s main customer base—underbanked consumers who use Western Union to send money nearly anywhere in the world or to pay bills. Customers can use WU Pay at any financial institution that offers online bill payment as an option.

Xoom

Parent: Xoom Corp.

Headquarters: San Francisco

Year Founded: 2001

Web site: xoom.com

Pricing: $4.99 per transaction, up to $3,000, if funded by a bank account

Field Notes: Xoom allows users to send remittances to persons in 30 countries via PC or mobile device. Last year, more than 1 million persons sent $5.5 billion through Xoom. More than one-third of these customers are steady mobile users, accounting for nearly 40% of transactions late last year, shortly after Xoom introduced its mobile app in June. With the mobile service, first-time users must sign up for a Xoom account. They designate the name of a recipient along with the recipient’s country, bank name, and bank-account number or a location where the cash will be picked up. Most Xoom users fund transactions with their bank account and send money to the same people. So on subsequent transactions, they can use a feature called QuickSend that allows them to authorize a transfer with a single swipe across the mobile screen. Accounts are protected with a user-name-and-password combination. While the service will work with a feature phone that can access the mobile Web, it works best with a smart phone. The app is available for both iPhone and Android users.

Yowza

Parent: Spindle Inc.

Headquarters: Scottsdale, Ariz.

Year Founded: 2014

Web site: GetYowza.com Pricing: For merchants, 2.75% for each payment transaction and 5 cents to 12 cents for coupon redemption

Field Notes: Spindle’s Yowza brand offers merchants mobile marketing and advertising opportunities that enable consumers to use their Yowza accounts to make payments. To pay via smart phone, the sale clerk presses the mobile tender key on the point-of-sale system. A Yowza computer server generates a barcode and sends it to the merchant for display to the consumer. Using the Yowza app, the consumer taps the camera icon and scans the barcode. The merchant receives a message the transaction has been made without any card data passing through the merchant’s system. Consumers load their payment details in the Yowza app. Pricing may be adjusted for some merchant types, such as restaurants. Spindle intends to use purchase and offer data from consumers who opt-in for Yowza to build a database that merchants can use to create personalized offers.

ZipZap

Parent: ZipZap Inc.

Headquarters: San Francisco

Year Founded: 2010

Web site: zipzapinc.com

Field Notes: Launched as a way for consumers to pay cash to buy digital goods and currencies for virtual games, ZipZap is now moving into the realm of general-purpose digital currencies such as Bitcoin. In February, ZipZap announced consumers could pay cash to buy Bitcoin at 28,000 shops in the United Kingdom through its service in partnership with several Bitcoin exchanges. Customers log in to their exchange accounts, select the cash-payment option, and choose how much Bitcoin they want to buy. They then get a barcode that they can print or email to their mobile phone and head to a local ZipZap payment location to complete the transaction. Bitcoin will then be sent to their chosen digital address. Last October ZipZap introduced CashTabs, a service that enables cash-oriented consumers to fund digital wallets through payments at 700,000 ZipZap payment centers. ZipZap’s first CashTabs partner is Ripple Labs Inc.’s Ripple wallet. Ripple is an open-source protocol that enables free and instant payments to merchants, consumers, and software developers with no chargebacks and in any currency. Using CashTabs, Ripple users can fund digital wallets with cash without needing a bank account.