This Month in Payments News: November 2014

Each month we round up the most interesting news in payments, the stories that have the potential to change the industry in ways big and small.

In our monthly series here on the Resource Center, we round up the biggest stories in the payments industry -- the breaking news and developing trends that stand to change this space and herald innovation. In this edition, we’re covering October. Follow along!

November brought several new developments in the payments industry, including American Express embracing tokenization, the launch of some fresh mobile payment apps and one startup on a quest to reinvent loyalty programs.

American Express Introduces Tokenization 

This month, American Express announced American Express Token Service, designed for Amex’s partners, card processors and businesses who accept credit cards from the company. Tokenization adds an additional level of security to payment processing, taking sensitive customer information and scrambling it using a “token,” which is only readable within a secure vault.

Those who use the new American Express service will be able to access the vault to create, issue and keep track of tokens, in addition to shutting off or deleting tokens they no longer want to use.

The service will also enable shoppers to make purchases via their phones instead of swiping a card, which adds another layer of security. But the amped-up defense for customers and businesses doesn’t stop with mobile capabilities. The tokenization service also allows users to create distinct tokens that vary by business, type of sale or device, making it even more difficult to identify a specific token, thus adding an additional level of obfuscation to protect sensitive information.

American Express Token Service is a big step in making both ecommerce and mobile payments safer, and is expected to launch at the beginning of 2015. When it does, it will be compliant with the tokenization guidelines established earlier in 2014 by EMVCo—a group of international card networks responsible for setting EMV standards.


A Slew of New Mobile Payment Apps Launch 

A recent Forrester report predicted mobile payments—currently bringing in $50 billion annually—would reach $142 billion by 2019. Recent mobile payment endeavors and existing success stories serve as further proof that mobile payments are on the rise. Starbucks has also made headlines recently for its successful adoption of mobile, a payment method that now accounts for 16 percent of their sales (roughly $7 million) each week. Even Bitcoin is getting in the game with a new mobile checkout app

However, the recent influx of mobile payment apps isn’t limited to brick and mortar stores. Photo-sharing app Snapchatannounced its partnership with payment service Square, adding the ability to send and receive money to the original Snapchat app. Here’s how Snapcash works: the app recognizes when a dollar amount is typed, then prompts the user to convert that amount into a transaction. For those concerned about payment security, Snapchat itself will not have access to payment information, as all debit card information is stored using Square. Currently Snapcash works with Android phones, but will be available on iOS devices shortly.

Another app,, is taking tipping to the next level using facial recognition. Its Vegas-based founders wanted a way to reward customer service personnel for a job well done--even when the customer doesn’t have any cash on-hand. allows users to snap a picture of someone (say, a bellhop) and choose the tip amount they’d like to forward. If the person has installed, they’ll be notified immediately. Otherwise, they’ll receive the amount upon registering for an account. So far, the app is available only in Vegas, where service personnel have been giving it a thumbs up. 

Finally, and Samsung are on a mission to make coupon-cutting a thing of the past--for Samsung users, at least. The endeavor, intended to boost in-store sales, allows users to add credit card information to Samsung Wallet. Users can browse available coupons at any time and save the ones they’d like to use. Instead of having to remember the deal at checkout, Samsung Wallet will do all the work, applying any saved offers when a user makes a purchase. The pair’s next goal? Coupon customization based on a shopper’s interests.


New Loyalty Startup Thanx Launches

According to a survey from COLLOQUY, there are 2.65 billion loyalty memberships in the United States right now. However, the same study found that consumers stop participating in 60 percent of these programs within a year of starting them. A startup called Thanx has set out to change that, armed with $4.7 million in funding and partnerships with MasterCard, Visa and even Apple Pay. 

When shoppers download the free app, they’re prompted to enter their credit card information. Then, Thanx does the rest. When a synced card is used at a participating retailer, there’s no need to pull out a punch card or look up an account--rewards are automatically delivered to a shopper’s phone and automatically redeemed once that shopper earns enough points. Shoppers can also receive push notifications when a new deal becomes available. 

While Thanx gives shoppers an easier way to get rewarded for loyalty, the app also provides added insight for businesses. A customizable database of shopper data zeroes in on both top shoppers and those who are at risk of heading elsewhere to help guide loyalty decisions and ultimately improve sales. Thanx also operates sans additional hardware, and there’s no need to integrate with an existing POS system. 

With the holiday shopping season in full swing, Thanx has the potential to give businesses just the push they need to increase their sales before 2015.


Bottom of the News

Here are a few other articles about payments that are worth a read this month:

The View from a High-Value Data Breach Target (InformationWeek DarkReading)

Consumers are Looking for Long-Term Relationships with Online Sellers (betanews)

The Impact on VARS from Major Changes to Payment (Business Solutions Magazine)

And one from our own Jenn Reichenbacher: Five Holiday Retail Customer Loyalty Lessons Learned from Back-to-School (Loyalty360)


What are you excited about when it comes to payments in 2015?