As merchants and consumers increasingly favor contactless payments over the course of the COVID-19 pandemic, Visa is removing obstacles to contactless acceptance.
Visa on Wednesday took its dongle-free mobile card acceptance project out of pilot and has rolled it out in 15 markets, with the U.S. expected to be added in 2021. Called Visa Tap to Phone, it enables businesses to accept contactless payments on any NFC-enabled Android device without any other plug-in hardware.
Visa on Wednesday also introduced a partner program, Visa Ready for Tap to Phone, to speed the developer’s functional evaluation from two months to a few hours. The first partners are Cellfie, MyPinPad, Quest, SoftPos and about a dozen others.
“It further increases accessibility to more users in this space,” said Mary Kay Bowman, Visa’s global head of buyer and seller solutions. “It’s incredibly important for businesses to innovate and serve customers in a time like 2020 when they are actually reinventing their businesses.”
Tap to Phone’s expansion comes quickly on the heels of the introduction of MagicCube’s i-Accept, which gives banks an option to sell software to merchants that supports contactless and PIN transactions through Android. MagicCube is one of Visa’s partners in enabling software mobile point of sale.
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Visa, American Express, Mastercard and Discover all support i-Accept. The upgrade places the mPOS hardware function inside an app, allowing a less expensive and faster deployment for merchants that want to use phones to accept payments.
What’s missing from i-Accept and many other mPOS software initiatives is iPhones. Apple is likely planning a similar technology through its acquisition of Mobeewave, a deal that links Apple Pay directly to iPhone acceptance. Apple generally does not allow other companies to access the NFC chip on iPhones.
Bowman said Visa would like consumers to have as much access as possible, and did not comment further on Apple.
Tap to Phone is part of Visa’s initiative to reach 50 million small and micro businesses with a software-based point of sale. The addressable market includes 2 billion Android devices and up to 180 million merchants.
Visa estimates fewer than 10% of the world’s small or micro merchants accept digital payments, citing research from Dalberg. Visa’s own research found 63% of these businesses would likely implement Tap to Phone, and 50% of consumers said they would use the technology if a business offered it to them.
Visa is trying to address the rush to contactless payments that has accompanied the coronavirus pandemic. The card brand reports contactless transactions have grown 40% year over year, and cites internal research saying 48% of consumers would not shop at a store that offers only contact methods such as a shared card reader or cashier. Visa additionally envisions supporting mass transit, nomadic businesses and pay on delivery business.
Merchants have increased their interest in NFC and other contactless payment options, such as QR codes, as a way to reduce the checkout queue while offering consumers and merchants a way to avoid close contact. Square, one of the earliest mPOS hardware companies, has offered a contactless NFC reader for years, and PayPal has expanded its international support for QR code contactless payments during the pandemic.
That places an onus on card brands to provide additional contactless technology to merchants of different sizes.
“Enabling secure contactless payments on a personal mobile device potentially makes every smartphone a POS terminal, and that could have major ramifications on the space,” said Thad Peterson, a senior analyst at Aite Group, adding dongles would no longer be necessary and many merchants could opt for a smartphone terminal in lieu of more expensive proprietary equipment in-store.
“Both iOS (via Mobeewave) and Android (via i-Accept and other projects) are POS capable,” Peterson said. “The question that needs to be answered now is how these platforms will integrate with existing merchant POS systems.”
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