December 2012 Volume 3, Issue 12
Contactless Payment
Inside this issue: Company History:
2
Continued from page 1 Mobil Sees Positive 2 Results From Speedpass Payment Device Options and Branding
2
Summary of Contactless 3 Payment initiatives in the U.S. Market Implementing
3
Contactless Payments Work Cited
4
Did You Know?.... Contactless payment can reduce customers time at the POS terminal by 30-40% Contactless payments are 63% faster than cash transactions and 53% faster than credit card transactions Customers spend 20-30% more when using contactless payment devices than when they use cash
There are already millions of consumers paying for purchases using contactless payment and many more are expected to follow. Contactless payment allows consumers to pay for their purchase by simply waving or tapping the payment device transponder near the POS terminal. What consumers value the most about contactless payment is the convenience and speed of the transaction. Retailers also benefit from contactless payment through increased customer spending, increased frequency of purchases, and increased customer loyalty. The payment device transponder is an electronic device that contains a microchip that is encoded with a unique number to identify the customer. The POS terminal
has an electronic system that sends out a low frequency radio signal to power the transponder so that the data stored in the device can be sent back to the POS terminal. With a modest investment, retailers can quickly and easily add contactless payment terminals to their existing POS system. Having a contactless payment system also allows the retailer to gain valuable consumer behavior information to implement marketing and sales strategies that build upon customer loyalty and repeat business. Furthermore, retailers that offer contactless payment terminals are able to differentiate themselves from the competition, improve operational efficiency, and improve customer satisfaction.
Photo: Contactless payment using a cell phone
Company History Texas Instruments was founded in 1930 and is the world’s largest manufacture of radio frequency identification (RFIS) transponders and reader systems. Texas Instruments is a highly innovative company and is credited with developing products that most of us use on a daily basis. Products such the integrated circuit invented in 1958, and the first hand
held calculator in 1967 are examples of the company’s innovation. Texas Instruments holds over 39,000 patents of which over 1,200 of those patents were obtained in 2011. Demonstrating Texas Instruments commitment of advancing technology in the marketplace is the companies current commitment to advancing RFID technology. Texas Instruments has taken RFID
to the next level and created an advanced RFID system called Texas Instruments Registration and Identification System (TIRIS) that is used to detect and track valuable objects and people. TIRIS RFID technology makes it possible to collect and read data in less than half a millisecond. This technology has been applied to (Continued on page 2)
Page 2
V o l u m e 3 , Is s u e 1 2
Company History (Continued from page 1) Merchants can add a contactless payment system with a moderate investment. POS terminals start at $100 each and payment device transponders start at $2.81 each.
various applications in the market such as toll systems that allow motorist to pay automatically while maintaining highway speed and by Ford Motor and Toyota for use in anti-theft devices. The demand for advancing technologies has allowed Texas Instruments to maintain a global presence through manufacturing, design or sales operations in more than 35 countries and service more than 90,000 customers worldwide. Our company’s mission is to continually advance our semiconductor technology to provide our customers with the tools to enjoy a smarter, safer, greener, and healthier world.
The following is a list of recent awards Texas Instruments has recently achieved: Fortune’s “Most Admired Companies” – 2012 for the 9th consecutive year Working Mother’s “100 Best Companies for Working Mothers” – 2012 for the 17th consecutive year. TI inducted into Working Mother’s Hall of Fame in 2010 for being named to the 100 best companies list for 15 consecutive years. Minority Engineer’s “Top 50 Employers” – 2012 for the 1st year Newsweek’s “Green Ranking
of America’s 500 largest corporations” – 2011 for the 3rd consecutive year Corporate Responsibility (CR) Magazine’s “100 Best Corporate Citizens” – 2012 for the 10th year Ethisphere Magazine’s “World’s Most Ethical Companies” – 2012 for the 6th consecutive year Dow Jones Sustainability Indexes, “North America index component” for leadership in corporate economic, environmental and social performance – 2012 for the 6th year
Mobil Sees Positive Results from Speedpass Mobil was the first retailer to offer customers the option of contactless payment in 1997 with its Speedpass. Speedpass is a key fob customers point at the red Pegasus located on the gasoline pumps and in the store at POS terminals to pay for their purchase. Paying with a Speedpass is faster and easier than pulling out a credit card, swiping it, and waiting for authorization.
When customers enroll in the program they indicate what bank account, credit, or debit card they want their Speedpass linked to. Mobil does not charge customers for the device and there is no fee to the customer for using it. Customers have zero liability if the device is stolen. To reduce the company’s liability, they placed a cap of two tanks of gas per day.
Sales records show that gasoline purchases have increased 15% among Speedpass users. This translates to one additional gas purchase per month per Speedpass customer. Mobil currently has over 6 million customers enrolled in the Speedpass contactless payment program and expects that number to continue to grow.
Payment Device Options & Branding There are currently several options for payment device transponders. They include:
Key fob
Cell phones
Wrist bands
And mini-cards
To improve visibility and increase customer loyalty, companies can customize their payment device form to resemble the brands logo. Your company could even offer a variety of payment device forms to appeal to different market segments. For example, your company could offer fashionable necklaces, charms, and bracelets that would appeal to women and key chain tags, wrist watches, and tie
clips that appeal to men. The options for payment device forms and branding are endless.
V o l u m e 3 , Is s u e 1 2
Page 3
Summary of Contactless Payment Initiatives in The U.S. Market This story can fit 150-200 words. Parameter Mobil
events or a MasterCard special offer that proAmerican Express motes a new product. One benefit of using your newsletSpeedpass PayPass ExpressPay ter as a promotional tool is that you You can also research articles or Region U.S., nationwide Orlando, Dallas, Phoenix, New York can reuse content from other marfind “filler” articles by accessing the New York keting materials, such as press World Wide Web. You can write releases, market studies, and about a variety of topics but try to Number of Devices >6 million keep your articles >16,000 >15,000 reports. short. issued While your main goal of distributing Much of the content you put in Locations 7,500+ your newsletter 60+ 600+ aMerchant newsletter might be to sell your can also be used product or service, the key to a for your Web site. Microsoft Pubsuccessful newsletter is Mobil, makingStop it & Shop lisher offers a simple to conMarquee merchants Chevron, Ritzway CamCVS, Dairy Queen, useful to your readers. vert your newsletter to a Web pubera, McDonald’s Kroger, Starbucks lication. So, when you’re finished A great way to add useful content writing your newsletter, convert it to yourFactor newsletter is to develop Form Key Fob to a Web Card, site and phone, postothers it. Key fob, card, others and write your own articles, or planned planned include a calendar of upcoming Status Production Production Pilots in progress
Bank of America QuickWave Charlotte, NC
<2,000
30 Chick-Fil-A, Java Joe’s, Just Fresh Bakery Min-card
Pilot complete
Implementing Contactless Payments Careful planning and working with experienced suppliers and service providers will ensure that the addition of a contactless payment system in your store will be a success. The following outlines the steps needed to prepare your company for the addition of a contactless payment system. 1.
2.
3.
Payment processing requirements: a merchant processor service will handle the actual transfer of funds by debiting the customers account and crediting the merchants account.
4.
5.
Physical requirements: contactless readers and POS terminals will need to be purchased and installed by qualified vendors. Software and hardware development and certification requirements: all software and hardware needs to be certified with the merchant processor to ensure the customers payment is collected properly.
6.
Training requirements: management and all employees that work directly with customers will need to receive training on how the equipment works and what to do if there's a problem. Employees should be trained on the benefits of contactless payments so they can educate customers and help ease any concerns they may have. Marketing requirements: a successful marketing includes an analysis of the target market, marketing goals and objectives, strategies and tactics, and a timetable. The marketing campaign should be geared towards customer awareness and the use of contactless payments. Support requirements: a plan should be outlined and a support team established to provide ongoing support for training, testing, installing software updates, and marketing support.
The following is a list of current suppliers and service provider that can assist your company with implementing a contactless payment system: Merchant Processors
First Data Corporation (http:// www.firstdata.com)
Chase Paymentech (http:// www.paymentech.com)
Contactless readers and POS terminals
VeriFone (http:// www.verifone.com)
OTI (http://www.otiglobal.com)
Personalized Services
Gemalto (http:// www.gemalto.com)
Total Systems (http:// www.tsys.com)
Fact: There are currently over 51,000 merchants locations worldwide that accept contactless payment devices.
TexasInstruments
12500 TI Bovlevard Dallas, Texas 75243 Phone: 972-995-2011 Website: www.ti.com
LeAnn Dahl Business Development One North State Street Chicago, IL 60602
Work Cited “Accepting Contactless Payments: A Merchants Guide.” Smart Card Alliance. July 2007. Web. December 3, 2012. “Contactless Payments: Delivering Merchant and Customer Benefits”. Smart Card Alliance. April 2004. Web. December 6, 2012. “Fact Sheet”. Texas Instruments. Web. December 5, 2012. Hardekopf, Bill. “Contactless Payments — Bad News For Consumers?”. Forbes. May 11, 2012. Web. December 3, 2012. “RFDI Transponder”. Mouser Electronics. Web. December 6, 2012. “Speedpass” Questions and Answers.” Mobil. Web. December 3, 2012. “Texas Instruments RFID eNews, Issue No. 14, November/December 2002. Texas Instruments. Web. December 3, 2012.