Saturday, February 12, 2011

Enabling credit card payments


I am fascinated to see the adoption of technology. Square Inc is now offering any one with an iPhone / iPad (with an Internet connection) in the US the ability to accept credit card payments. This means cab drivers, electricians, mechanics, plumbers, flea traders and sunday market farmers can accept small transactions through credit cards. (oh, i am not sure if they would have an iPhone). I would be tempted to use one for the heck of it but the transaction fee is set at - 2.75% + 15 cents per transaction.

I think the transaction fees are slightly high but that is possibly because it is still trying to figure out proper risk management techniques. I think the image says a lot. and this is the example of only one of the companies doing it (the coolest one by far) there are other Payment Processors engaging in this niche area as well - Sage Payment solutions (looking at mid to small sized merchants), PayWare Mobile processing. Cool stuff overall...

2 comments:

Clyde said...

There are lots of similar stuff happening over here however seems like this is not the time for the payment industry to look for upcoming technologies..but to get the act together reduce risk cost and increase revenues. Technology should help focus these priorities. What Say?

Aditya Saraogi said...

I think the answer to reducing risk costs is also given by Technology. With EMV adoption, the risk cost is dramatically reduced. In Canada, when EMV was introduced credit card fraud fell by 20%.

Another kind of risk is merchant risk where the merchant itself is a fly by night operator. Here, yes, I dont think technology can do much apart from the role of analytics that can possibly identify systematic credit card fraud...

I am really interested in figuring out what kind of "similar" stuff is happening in India..Do provide some URLs