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Evidence mounted over the past week of the interest at least some major e-commerce processors have in using mobile platforms to penetrate the physical point of sale.
First came word that Bling Nation Ltd., a Palo Alto, Calif.-based mobile-payments processor that depends on contactless stickers, is working on an integration with PayPal Inc.’s X Platform. The integration will allow consumers to tap their PayPal accounts when they use mobile phones with Bling Nation tags affixed to them. On the heels of this development came an announcement from Google Inc. that the Mountain View, Calif.-based online-search giant has created a tool that lets small merchants use Google Checkout to sell items at venues such as fairs or markets. Buyers will use phones equipped with Google’s Android operating system to complete purchases.
While they extend the payment products of two major online players into the physical world, both developments have limitations. Merchants must have a Google Checkout merchant account and Google’s Chrome browser on a laptop computer to use the new tool, which Google calls its Android Payment Extension for the Google Checkout Store Gadget. Buyers must have mobile phones that run Android along with Google Checkout accounts.
The Google extension requires that merchants use the so-called store gadget and a Google sites page to create an online store complete with a shopping cart. The buyer tells the merchant what items he wants to buy, and the merchant fills the cart. He then presses a green “Checkout with Android” button on his screen to generate a bar code, which the consumer scans with his phone. This scan automatically takes the customer to a “buy” page where he can complete his purchase.
It remains open to question how many merchants, and what sort, will want to go through this process. “While this payment method may not be perfect for all cases, we hope you find it useful for setting up a shop on the go and that it inspires further innovation in the mobile and payment developer communities,” says Peng Ying, a Google Checkout official, in a Google blog post announcing the new tool. In the post, Ying refers to sellers that are hawking their wares “at a market or expo and want to take credit cards” as a possible market.
Still, the development represents a potentially important new application for Checkout, which Google introduced four years ago as a payment wallet to ease credit card acceptance for online merchants. By extending Checkout capability to Android phones, Google has tied the service to a mobile operating system that is fast gaining adherents. Android-equipped handsets now account for 12% of the smart-phone market, a tripling of their share only six months ago, according to Javelin Strategy & Research (Digital Transactions News, June 10).
Meanwhile, Bling Nation’s decision to work with PayPal’s new open platform brings a potentially huge pool of consumers and merchants to Bling while extending PayPal to stores where Bling tags are accepted. The development also represents an important change to Bling’s business model, which up to now has rested on the idea of linking local merchants and consumers with accounts at the same community bank. In this way, all transactions through the contactless system are on-us. The system is entirely proprietary, with same-day credit and debits and merchant pricing that compares favorably to network-branded cards.
By incorporating PayPal accounts, Bling will now have access to potentially 84.3 million active accountholders, a number that could draw the attention of regional and national chains. But, while PayPal is accepted by some 8 million merchants worldwide, not all have physical stores, and even fewer could be prime candidates for contactless payments, a method that seems best suited to high-throughput, low-ticket environmentsa.
For now, Bling Nation is “finalizing technical integration and testing,” the company says in a statement sent to Digital Transactions News. “Bling Nation is focused on securing local business partners in the Palo Alto area to participate.”
