The Month in Payments News: July 2015

It’s time to round up the biggest stories in the payments industry—the top scoops and developing trends that stand to change this space and herald innovation. In this edition, we’re covering July 2015. Follow along!  

 

Retail and Payments by the Numbers

Need proof that mobile payments are catching on with consumers? Several studies released in July show that awareness is increasing as more purchases are made with smartphones.

  • Mobile Awareness: MasterCard surveyed US shoppers and found that 82 percent are aware of contactless payments. Of those who know the option exists, 56 percent use their phones to make purchases, both online and in-store.
  • Online Mobile Payments: Another study, this time from Adyen, found that 36 percent of mobile purchases made online come from iPhone users, while 28 percent come from Android phones.

 

The Latest Ways to Pay

Gone are the days when cash or credit was the only option at the register. July was another big month for the major players to experiment with making payments faster, simpler and more secure.

  • Hands-Free Payments by Google: A new, aptly named app from Google called “Hands Free” is taking both cards and phones out of the payments equation. Simply by having the app installed, cashiers can accept or reject an image and name of each shopper to complete a purchase. Google plans to start testing out this new approach at select Papa John’s and McDonald’s restaurants soon.  
  • MasterCard Talks Facial Recognition: Starting in the fall, MasterCard plans to test out a new security measure, teaming up with Google, Microsoft, Apple and others to make buying things possible with a literal blink of an eye. Once a user sets up an account, MasterCard’s system will turn facial features into code to authenticate purchases. For those who aren’t quite ready for this advancement, using a fingerprint scan will also be an option.
  • AmEx Express Checkout Launches: Thanks to partnerships with the likes of Warby Parker and Ticketmaster, American Express is now letting its cardholders skip the tedious process of entering addresses and credit card numbers online by signing in with the online credentials they already have to manage account information. This move could mean good news for retailers because shoppers have the option of sharing their information with a store during the purchase process.

 

Peer to Peer Payments Heat Up

July saw record temperatures across the US, and the peer-to-peer payments space is heating up, too. From acquisitions to new features, this is definitely an area to pay attention to.

  • PayPal Acquisition of Xoom: After breaking ties with Ebay, PayPal’s next move was to acquire mobile and online money transfer company Xoom. We’ve seen other signs of PayPal’s growth strategy in recent months, including the acquisition of Braintree, which acquired P2P platform Venmo itself back in 2013.
  • Facebook Brings Money to Messenger: Now, all US Facebook users can send and receive payments using the same messaging service where they keep up with friends in real time—all it takes is the upload of a debit card and the click of a dollar sign button. Once a user types in the amount they’d like to send, all the other person has to do is accept it and wait for the amount to go into their chosen bank account.

 

A Note on Loyalty

What does it take to win customer affection nowadays? The answer depends largely on your competition and your customer base, as seen in this month’s stories.

  • Beta Version of Walmart’s Shipping Pass Leaks: As part of Walmart’s ecommerce acceleration plan, this past October, the retailer announced a soon-to-be-tested program called ShippingPass. The goal? To increase loyalty by getting shoppers to think of the retailer as the go-to place to shop. Now, a version has leaked, revealing some details that aim to lure consumers away from Amazon Prime—a top threat to Walmart’s success. Among the features are unlimited three-day shipping of roughly one-seventh of Walmart’s online stock for a $50 annual fee, plus no purchase minimum to qualify for the shipping deal. Shipping items that don’t meet the three-day shipping requirement will still be free—they’ll just take a little longer to arrive. No details yet on the release date.
  • Millennials Share Their Loyalty Sentiments: While older generations prefer to get their loyalty program memberships for free, millennials aren’t opposed to shelling out some cash if it means gaining access to a store’s loyalty offerings. In fact, LoyaltyOne conducted a survey and found that almost 80 percent of shoppers aged 25 to 34 will pay up—provided a program has exactly the perks they’re after. Survey participants aged 18 to 24 agreed. It’s a surprising finding, but one that’s worth noting if your retail strategy is aimed at this age group.