Micropayments in the Web3 era

What is a micropayment?

Let’s explore the concept of micropayments in the context of payment processing and monetary value.

A micropayment is a small transaction usually under a threshold value where the traditional fees associated with digital payments options such as cards or digital wallets become too expensive or impractical to carry out. In some cases, these payments could be less than one dollar and in other cases few cents (pennies). Some payment processors consider micropayments as those where the amount is $5.00 or less.

Card processors normally charge the merchant a transaction fee which include a lump sum and a percentage of the purchase price. Based on this scheme, the fees associated with processing a micropayment could be higher than the purchase price or be as high as fifty percent (50%) or more of the purchase price. Thus, the cost of accepting these payments in other form rather than cash becomes cost prohibitive.

Web3 to the Rescue

The advent of blockchain and cryptocurrencies would lead you to believe that these new payment methods could become an alternative to fiat cash for micropayment as the transaction fees could be denominated in very small amounts. These payment methods could accommodate fees which are much lower than the minimum unit of a fiat currency which is normally one hundreth (1/100) of the fiat unit.

However, the major networks such as Bitcoin and Ethereum normally have mining and transaction fees that in combination could levy merchant fees much higher than the actual micropayment purchase price,hence making those methods even more cost prohibitive than using the credit card schemes. Not to mention the speed to complete a transaction could take several minutes and the price volatility could reduce the value received at the moment of the purchase.

Despite these limitations, it is feasible to consider other blockchains to make digital micropayments a reality. Using the same principles that govern mainstream networks like Bitcoin or Ethereum, a merchant could employ a more efficient blockchain to handle micropayments.

At Netclearance, we specialize in creating bespoke Web3 networks or Dapps that allow merchants to issue and accept their own digital tokens pegged one-to-one with fiat monetary value using mobile wallets and contactless technologies based on Bluetooth LE (BLE), a technology which is present in 100% of smartphones and wearables today.

For more information about our retrofit modules and end-to-end mobile wallet solutions for micropayments contact us

How Digital Signatures Could Stamp Out Covid Tests Forgeries - A New Travel Requirement in a Post-Pandemic Era

In the midst of the Covid-19 pandemic, stipulations and requirements are constantly changing and evolving to better ensure and work in accordance with safety protocols, especially when traveling abroad. In regards to these safety protocols, many countries have implemented new stipulations involving international travel. These enforcements require proof that the individual in question has been tested and confirmed to be negative for the virus before they are able to travel internationally. ‏

‏Although these protocols have not been assimilated into every country, we can ascertain that with the rapid spread and evolving variants of the virus that this protocol will become deemed necessary in order for international travel to be plausible at all. It is only a matter of time before the increase of cases and casualties convinces more countries to consider these policies as a valid approach to combat the pandemic. These policies will be accepted to prevent further outbreak within their own jurisdictions, which will inevitably cause them to enforce these same requirements for those desiring to travel to their domain. ‏

‏Although this new policy is more than necessary during this dire time, the potential of falsification of negative COVID-19 test results has posed a detrimental risk of inaccuracy, especially given the current methods in place to ensure validity of these tests. The current standards in place that are deemed an acceptable way to provide this documentation are primarily through E-mail, or as a printed document. Both of these avenues clearly have loopholes where falsification is concerned. ‏

‏E-mails can easily be typed out to persuade the viewer that it is valid documentation of a negative testing result, while lacking any certainty that this individual was even tested to begin with. Printed documents pose much the same risk with allowing anyone the capacity to simply type out the desired statement and feign any necessary credentials to make it appear to be accurate. Both of these routes allow individuals to give the impression of having negative results, while not providing actual medical clarification that they are legitimate. ‏

‏Anyone savvy with technology and knowledgeable of the specific templates that these documents usually are written in would have the capacity to replicate such with ease, and the recipient would be none the wiser. The sheer amount that these documents are already being scrutinized as a whole, whether fully accurate or falsified, would reveal a vague discrepancy at best when those falsifications do take place, and easily go unnoticed by those designated to verify their accuracy. It is clear what ramifications that this potentially poses worldwide. ‏

‏Taking this into consideration, it is not a far stretch to presume that we must implement different methods in order to ensure accuracy with testing, which in return will ensure the safety of humanity as a whole. This notion is not to be taken lightly, and absolute clarity with verification is without parallel under these circumstances. ‏

‏Fortunately enough in this day and age, we have technology available at our fingertips that can prevent the potential forgery of these documents, and provide a reliable database that can be referenced to, yet not manipulated by those who wish to alter it in their own favor. This type of trusted exchange of private, sensitive information between two parties would be most achievable by technologies that utilize public key infrastructures or PKI for short. PKI is a route to secure specific digital documents and offer a safe exchange of sensitive information. ‏

‏This attribute regarding sensitive information is of utmost significance when considering anything of a medical nature, especially a document used as a reference for such. This means of exchange offers the recipient of the testing results validity with the digital documents provided to them. It simultaneously provides the individual tested with the privacy necessary when exchanging any document of a medical nature. ‏

‏Overall, we have an immense need to update our means of exchanging and verifying testing results where international travel is concerned involving multiple jurisdictions and reporting standards. This is a necessity not just to minimize the detrimental effects that this pandemic has had on our world as a whole, but also to offer the clarity that preventing the transmission of the virus is of utmost importance.

The Future Of The Restaurant Dining Experience In A Post COVID-19 World

Of all the businesses that have been adversely affected by the coronavirus pandemic, the worst impact has been on restaurants. Even when the current lockdowns begin to be eased, can restaurants ever return to business as usual?‏

‏Dining is Not Going to be The Same Again‏

‏Governments have been advocating the widespread use of masks to reduce the spread of the infection. Things like thermal screening and social distancing have been put forward as some measures that can allow businesses to resume work after the curbs are lifted.‏

‏But what about the restaurant dining experience?‏

‏Customers will ‏ ‏have‏ ‏ to take off their masks as they start eating. They will touch their chairs, their tables, and the dining utensils. A waiter will have to come up to take their order. The menu will be passed through the hands of multiple diners.‏

‏And there is the whole matter of payments; whether a customer gives their card to the waiter or go up to enter your details in a payment terminal themselves, they bring themselves in contact with multiple public surfaces.‏

‏Each of these activities is a point of contact with a high risk of virus transmission.‏ ‏ Even if governments decide to allow for the risk, diners are unlikely to want to chance it.‏

‏How can restaurants change their processes to ensure that they continue to do business without putting the lives of their clientele at risk?‏

‏Can Going Online Work?‏

‏The key is to eliminate physical contact as much as possible. While things like utensils and menu can be made disposable, what about placing orders and making payments?‏

‏Some restaurants are contemplating taking their ordering and payments process completely online. But doing that has its own issues.‏

‏Mobile internet can be unreliable at times, leading to awkward situations where a diner sitting at their table is unable to place their orders due to a slow network. Similar problems extend to payments as well, which is why very few business establishments accept online payments for physical purchases.‏

‏And the usual workarounds like placing your own touchscreen tablets on every table for ordering (and on the counter for payments), are no longer feasible due to the possibility of those screens or PIN pads becoming virus carriers.‏

‏Even more importantly, going online is only a solution for home delivery of food. But what about a restaurant’s fine dining experience? Internet-based applications are not an answer to this problem.‏

‏Contactless Technology is The Way Forward‏

‏That is where our technology solutions come in. With the aid of our short-range radio communication modules, every customer can use their own mobile phones for everything, from ordering to payment, without physical contact.‏

‏As the protocol uses radio communication, no internet connection is required, with the added advantage of doing away with any network delays. The transmission of data is absolutely seamless, leveraging a mobile application for all platforms.‏

‏Want to show your updated menus? Done. Looking to take orders from a diner’s table? Also done. Wish to implement contactless payments? We have got you covered.‏

‏With our mBeacon technology, it is possible to deploy a complete application ecosystem covering everything from ordering to touchless payments on any mobile device, or even an existing application if you have one.‏

‏The installation is also easy, with our retrofit kits (some of which are the size of a postage stamp) integrating with your existing setup with a minimal fuss.‏

‏The future of a touchless dine-in experience is here. Contact us today to transform your restaurant into a COVID-19 proof establishment and be ready to keep your patrons and staff safe.

Cash Isn't King: COVID-19 & The Rise Of Contactless Payments

In 2018, less than 0.5% of transactions in the U.S. were contactless; over approximately 3 months, contactless transactions have risen 150%. According to the global consulting firm A.T. Kearney, the U.S. lagged far behind other countries in utilization of the technology despite its deployment in 2003. But now, with the COVID-19 “new normal,” people in the U.S. are understandably less inclined to use cash or anything that would require shared contact with other people. Cash is no longer king in the U.S., at least for the moment. What are contactless payments, why didn’t we see this prevalence before, and will this new wave last?

What are contactless payments?

Contactless payments are a way to pay with a card or phone without physically swiping a card, passing a card to a person, or having to come in contact with surfaces others have touched. It is the ability to tap a card, scan a code, or pay online for a purchase. Tap-and-pay systems rely on near-field communication (NFC), Bluetooth Low Energy (BLE) or Quick-Response Codes (QR Codes) which only works within small distances, less than a few inches. This is the technology relied upon for things like Apple or Google Pay. There are even card-less ATM’s that utilizes a scanning mechanism or phone or a simple swipe for a consumer to withdraw cash. This kind of transaction is designed to be quick, efficient, secure, and effortless for the consumer.

Why did the U.S. lag behind other countries in utilization of contactless payments?

Some believe the reason the U.S. has lagged so far behind other countries in the adoption of contactless payments has to do with saving money and purchasing the necessary technology. Others indicate that merchants are unsure consumers will utilize the technology and are unwilling to invest in the point-of-service terminal technology. Contactless new to consumers, so their fears may not be unfounded. Additionally, banks are unwilling to invest in contactless cards until merchants will invest in the terminals, and they won’t until they are sure consumers will use it.

It also cannot be discounted that an underlying ideology or philosophy about the dollar has kept it propped up in the U.S. so much so that it took a pandemic to take it down a notch. Simple, human reasons for a reticence to adopt contactless payments should not be dismissed so easily. Contactless is new, unknown, and though certainly more efficient, it relies entirely on technology that you cannot see. There’s a sense of security in using cash, one that contactless transactions still lack to a certain extent.

Is this a permanent shift to more contactless transactions?

Some believe that as consumers utilize contactless payment more during this pandemic that they will be reticent to return to cash. The idea is that they will see how efficient and quick this kind of payment can be and will prefer it over cash. Additionally, because we do not know how long this pandemic will last, it can be assumed that we will see an increase in usage for its duration. However, there are many cultural and personal reasons one might wish to return to cash. Contactless payments may inadvertently lead to debt accumulation or unnecessary overdraft fees in a way that cash does not. Additionally, while certain contactless payment methods may remain popular, others still require extensive investment in technology. Apple Pay and Google Pay as well as online payment transactions may sustain this trend, but until stores fully re-open, we won’t know if contactless cards will become a new norm.

Final Thoughts

The more familiar consumers become with the technology, and the more they see its benefits, contactless payments may finally become the norm in the United States. We can be certain, though, that for as long as this pandemic lasts cash will not reign supreme. That throne, for now, belongs to contactless payment systems.

The Rise Of Speech Recognition: Could COVID-19 Make The Touchscreen and Keypad Obsolete?

Germs and viruses, especially during flu season, have often been a concern of physicians and the health-conscious when it comes to commonly used surfaces, but never so much as now with the fallout of COVID-19. Extraordinary measures have been taken to reduce the use of common surfaces when possible, and the keypad is now under greater scrutiny.

We use keypads and touch screens for several things – ATM transactions, purchases, ordering, and more. As we learn more about COVID-19, lingering germs are less of a minor annoyance and now a major health hazard. Measures have been enacted to regularly clean keypads and screens after use, and some have experimented with anti-bacterial coverings and screens, but is it enough? Will COVID-19 finally kill the keypad?

The Rise of Speech Recognition

Some experts believe that COVID-19 may be with us for some time, and everyone is scrambling for reasonable solutions to the challenges that it brings. We have grown accustomed to some types of audio recognition such as Siri and Alexa and other speech-supported electronics. Now, some businesses are eyeing technology that would allow them to forego the use of the keypad altogether. Whether they can afford the options, and convince customers to use it, is a calculation they will have to make.

Finding a Match

Technology to support audio recognition isn’t new but finding the right fit for each environment can be tricky. While some technology allows for clear and easy voice recognition even with background noise, it can be prohibitively expensive. Additionally, some technology can amplify one voice over other noise, but ensuring that it is the right voice gets more difficult. Finally, acquiring the right technology for the business interfaces already in place and at a price point that makes financial sense for the investment can be challenging.

Affordable Option

While some experts consider expensive technology for installation, there may be an answer on the phones we use every day. Utilizing a patented wireless mobile technology, Netclearance has developed an audio recognition solution to fit the future of certain contactless transactions. With sophisticated security measures, it can meet PCI, HIPAA, GDPR, and FIPS compliance guidelines. The best part is that compared to other technologies, this solution is an affordable one.

Netclearance uses a smart wireless technology that, when paired with the right interface kit, can offer a cost-effective option to replace peer-to-peer and peer-to-machine applications. Additionally, the scope of its wireless reach can be customized to meet the needs of the business interface. Finally, the technology has been designed with ease of implementation in mind. It supports a variety of interfaces and can also be retrofitted for easy deployment. Because it can easily fit existing infrastructure, it comes without the need for expensive upgrades or long installation times.

You want to keep your customers engaged and satisfied with your service but balancing that with health needs has also grown more critical. This technology allows you to keep your customers, grow your business, and keep people safe making the investment minimal compared to the return.

Final Thoughts

Being a business owner has always been hard, and meeting new challenges such as COVID-19 can feel overwhelming. While there are expensive, sophisticated options available to meet the need for audio recognition services, the return on that investment is questionable. Now, with Netclearance, there is an option that meets the mark in every way. It is affordable, it is easily deployed, and it keeps your customers happy and healthy. COVID-19 may not be with us forever; regardless, improving the way we do business is always a good thing.

The Future Of Checking-In & Checking-Out In A Post COVID-19 Era

Even after the current pandemic has passed and lockdown restrictions are eased, things are unlikely to ever return to the way they were. For good or for worse, the world has been awakened to the threat posed by rapidly spreading communicable diseases and is taking steps to prevent the recurrence of a disaster of this magnitude in the future.‏

The truth is that this strain of Coronavirus has found its way to infect and spread among humans and is here to stay among us for years to come.

Scientist have clearly demonstrated that in most of cases the Coronavirus can be spread through mainly three ways:

· Droplets in the air as a byproduct of tiny liquid drops a person ejects from the mouth or nose (i.e. cough, sneeze, talk or simply breathing)

· Aerosol particles infected from these droplets and then can stay in the air for hours

· Surfaces. Yes, simply touching an object or surface contaminated with a virus is also a way to get the virus on your hands and the rest we know it — you touch your face on average 23 times every hour — https://www.ncbi.nlm.nih.gov/pubmed/25637115.

Moreover, it is scientifically proven that the virus can remain on plastics, metal, cardboard, and many other surfaces to which we are exposed on a daily basis for several hours and even up to days.

For example, someone with the virus coughs in the hand and that person touches a button to call an elevator that somebody will touch afterward. A pen, a doorknob, handrail, pin pad, touchscreen and the list can go on and on — you now get the picture — masks alone don’t protect us enough.

We still live in an offline physical world and there is no escape from touching things in our lives to carry on our normal life — until perhaps one day there will be an “Alexa”-like voice-command interface for all these things which is unlikely to happen in the foreseeable future.

‏Avoiding Physical Contact is Crucial‏

Moving forward into the new normal, it is going to be particularly important for people to limit their contact with surfaces that can easily become a focal point for virus transmissions. By adopting a measure of social distancing in all all interactions on a permanent basis, we can go a long way in containing the spread of another pandemic.‏

‏But this poses a big challenge for activities where physical contact is required. Simple routine actions like checking-in and checking-out, for example, bring customers in close contact with each other — and definitely within the 6 feet separation window recommended by the CDC — not to mention with the customer service representative and simple objects at the front desk. And such activities can be found almost everywhere, from hospitals to airports, hotels to clinics, retail stores, office buildings and financial institutions.‏

Several industries will have to embark upon a profound digital transformation of their check-in and check-out procedures in the new normal.

‏How are such establishments going to manage to keep track of a continuous stream of people checking-in and checking-out while maintaining an element of safety in human interactions that is needed to provide a helpful customer service without risking the spread of a viral disease like Covid-19?‏

‏Self-Help Kiosks Are Not The Answer‏ — Neither Robots

Implementing a completely contact-free experience on any check-in and check-out counter is a difficult task. Simply installing a self-help kiosk is not a solution, because even without a human behind the desk, the touch screen of the kiosk becomes a point of contact.‏ (remember the elevator example).

‏And this problem extends to any self-attended terminal. Whether is using a tablet to place orders at a restaurant or enter personal details at a clinic on an electronic clipboard, the repeated contact with the screen (or a keypad) can easily lead to the accumulation of a viral load that persists for a long time, potentially infecting every person who touches it afterwards.‏ And it is unrealistic to think that these touch points will be sanitized and cleaned after each transaction as this would increase queueing and impact customer service in a negative way. In some cases, the use of detergents may damage or shorten the lifespan of the devices used for self check-ins prior to Covid-19.

Touchless Check-ins and Check-outs are the future

The good news is that there are technology solutions that already provide completely contact-free check-ins and check-outs. These systems exist today and consist of wireless presence devices that can interact with your mobile phone from just a few feet to more than a hundred, easily letting you cover an entire reception area or even more. These solutions work by transferring the interaction from a public kiosk, clipboard or touchscreen to your own private touchscreen that sits on your mobile phone.‏

A smartphone and a mobile app it’s all that is needed on the customer’s end and a frontdesk could become a touch-free zone. These solutions can work even without an Internet connection which makes it easier to use and deploy.

On the frontdesk’s side the technology is inexpensive and quite flexible to implement. Even the frontdesk’s aesthetics can remain unchanged as some of the solutions can be tucked away in a corner or under the counter.

‏‏A New Normal Will Call for Frictionless Experiences at the Front Desk‏

‏Ultimately, the COVID-19 crisis will pass, and the world will get back in gear. But the impact it leaves on our psyche is not going to disappear that quickly. People are going to be leery of trusting their health on a public device or countertop that is touched by hundreds every day, or a manned front desk which is visited by even more people.‏

To bring a certain level of normalcy in industries like retail, hospitality, travel, healthcare and others that depend on close interaction with a manned front desk for check-in and check-out procedures, the time has come to consider technology upgrades which can reduce the spread of viruses and diseases like Covid-19.

‏As such, businesses will need to consider alternative solutions that preserve the security of in-person transactions without actually needing physical contact with any tablet, desk or pinpad. Not only does this make your business or establishment safer for your clients, but it will also attract more customers that prioritize their safety and hygiene than those that don’t.

Ditching the Plastic: The Future of Mobile Payments

What if someone told you that physical credit cards will be obsolete in this decade? Remember the fax machine, VHS. Would you be surprised? Probably not, given the rapid growth and development of technology these days. With the advent of mobile payment technology like digital wallet apps, wearables and biometrics, it's no wonder physical cards could be going away soon.

The Importance of Code for Security

Everyone worries about the security of their account. Hackers can get into your account and retrieve your credit card number. They can do a lot with this information and the fact that your account number never changes increases the chances of someone hijacking your credit card account. But with a randomly generated code, or token, hackers will come up empty when attempting to retrieve your information. According to Paymetric.com, "A token cannot be reverse-engineered to reveal the actual card number". And even if the code is retrieved, it's pretty much useless for any other transaction, because tokens are randomly generated, meaning they can't be decrypted or "cracked".

No More Plastics

As more and more credit card companies implement tokenization into their databases, the need for physical credit cards will gradually decrease. There's a number of benefits to this. Cardholders won't have to worry about their cards being lost or stolen. Tokenization significantly increases account security. Companies can also benefit from an increase in security for their own data.

Next-Gen Mobile Payments

Speaking of companies and what they can do to increase their own security as well as their customers' security, the use of a "smart beacon" device is a great solution for the next-gen of mobile payments.

mBeacon Products like mBeaconPay and mBeaconSAM use tokenization and advanced cryptography for secure mobile payments. These products are small Bluetooth modules that are connected at the point-of-sale upgrading existing payment terminals to accept mobile-wallets in apps securely and from wider distances.

Here at Netclearance Systems, Inc., our mission is to create new, innovative ways to make your mobile transactions and payments more secure.

For more on mobile payments security, contact us

The Rapid Evolution of Mobile Payment Technology

In today's swiftly changing technology landscape, it's easy to forget the humble credit card remained the latest payment innovation for decades. With the ubiquity of smartphones and growing Internet of Things (IoT), customers today have many more payment options than the generation before them. But how did this come about and what's next on the horizon?

Early Innovation

From bartering, to metal coins, to printed cash, humankind finally saw the advent of the credit card in the 20th century. While store specific courtesy cards emerged in the early 1900s, it wasn't until 1946 and John Biggins' "Charg-It" card that we saw the first true credit card. Following closely behind Biggins, Frank McNamara invented the Diner's Club Card after eating out and realizing he forgot his wallet at home. This early multi-purpose charge card made of cardboard saw its first plastic competitors in the 1960s from the likes of American Express and Bank of America.

Recent Changes

After the invention of the credit card, the next payment innovation wouldn't occur for decades. Traditional magnetic strip credit cards remained king until the establishment of PayPal in 1998. Then in 2014, the idea of the digital wallet and mobile payments became readily attainable with Apple Pay. Technology like tokenization and near-field communication (NFC) worked together to make mobile payments a reality. In this time of innovation, even the lowly credit card got an upgrade thanks to the EMV chip in 2015.

What's Next

Mobile payment options continue to develop and become more widely adopted. According to the most recent TSYS US Consumer Payment Study, "68 percent of consumers plan to make 50 percent or more of their in-store purchases using their digital wallet within two years." As the desire for convenience pushes technology forward, trends to watch include invisible payments and "check out free" options like Amazon Go stores. Some of the latest research explores biometric applications, like voice and fingerprint recognition payments.

The payment technology of today is an exciting and rapidly evolving scene. We've come a long way from the cardboard Diner's Club Card of yesterday!

Why Mobile Payments Are More Secure

It seems that every day, another store is accepting some form of mobile payments. Yet, the news isn't full of stories about security breaches related to them. This isn't because mobile payment providers are mysteriously silencing the reporting. Instead, it's because there are very few, if any, stories to report. How can this be?

Tokenization

Tokenization is a relatively new technological development that allows for unprecedented security in electronic payments. It allows a unique number to be generated for each transaction or website instead of relying on static account numbers. This makes it so that even if a criminal "sniffs" the number from the payment system, it will do him no good. The number expires once the transaction is through, rendering it useless to the would-be thief.

Unlike some prior attempts at improving security, tokenization causes no inconvenience to the customer. The "mechanics" all take place on the back-end, so the customer is able to complete a transaction as usual. In fact, tokenization works very well with mobile payment systems, in-house payment programs, and other such modern options. Because of this, stores and financial institutions don't have to worry about pushback from customers. Consumers will instead be eager to use the new, more-secure system.

Getting in on It

In order to use the new payment acceptance systems, stores and financial institutions need to have the right equipment and programming. That's where Netclearance's mBeacon products come in. mBeaconPay is a payment terminal that not only can handle standard credit cards, but also cryptocurrency payments, private-label closed-loop payment systems, and tokenization. Its sister product, mBeaconPay Plus, works on tablet-based systems so you can be mobile as you do business. A related product, mBeaconSAM, upgrades existing card reading terminals to accept mobile wallet payments and other modern payment options.

To learn more about Netclearance and how we can help you gain the full benefits of tokenization, just contact us. We'll be glad to work with you.

Tokenization: A Revolutionary Development in Mobile Payments Security

An "arms race in code" has led to an improvement in payment account security that actually lives up to the term "revolutionary." It involves the use of a code that can produce a different number for each transaction, making it so that stealing account numbers is pointless. Called "tokenization," the idea has powered Apple Pay and Android Pay, and is poised to sweep through the rest of the payments industry.

Stolen credit card numbers have always been a problem with payment systems. In the early days, when everything was done on paper, there seemed to be no solution. Once everything was computerized, consumers and merchants both hoped that a fix was on the horizon, but it turned out to be a long time in coming. Now, with tokenization, it has finally arrived.

What Changed that Allowed Tokenization to be Developed in Earnest?

The big change that makes a solution possible, it turns out, wasn't done just with security in mind. Instead, it was meant to foster new methods of collaboration and competition between financial institutions. New protocols were developed for sharing information between banks and other fintech players, and these allowed app makers and others to develop new technologies. One of these new technologies is tokenization.

Is Tokenization Revolutionary in Ways Other than Security?

Yes. It is not monopolized by the major credit card providers or banks, but instead, can be done by any number of token providers. These include stores, websites, app providers, and more. This decentralizes the payment power structure and puts pressure on the big players to stay competitive. It also allows for a much wider range of applications.

Keeping up with mobile payments, tokenization, and other advancements is easy when you use mBeaconSAM and mBeaconPAY solutions from Netclearance. They ship with embedded hardware security elements which makes instant tokenization a breeze. Contact us today to learn more about how we can help your business come to the forefront.

The Network Effect in Mobile Payments

The network effect is best described as greater use of a product resulting in an increase in its value. If you think about the telephone or social media, you can immediately understand why the more people are in a network, the more useful it is. Collaboration is one great way to increase the effective size of a network and thus the value and utility of the product. In financial transactions, this mostly refers to P2P (person-to-person) transactions. The more of your friends are in the network, the more useful it is.

The banking world's on-again-off-again relationship with collaboration has lasted since the industry's early years. At the dawn of the internet, most banks tried to build their own P2P solutions, individually. They lost out to the payment giant PayPal, especially as many delayed in embracing the true potential of digital networks.

The truth is that payment systems benefit heavily from a larger number of transactions. This is why PayPal beats out individual bank solutions to the point where many small businesses no longer bother with a merchant services account. PayPal's rival Square, more focused on face-to-face transactions, has also lured away sole proprietors and micro businesses.

The banks have finally clued in with the launch of Zelle, an API-enabled network with more than 30 partners, designed to work with thousands of banks and millions of consumers. The basic premise of empowering the network with more participants and transactions can thus be used to benefit smaller banks. MasterCard and Visa have also expanded the use of open APIs to encourage larger networks. Blockchain may also affect the development of P2P systems, although the technology is new enough that it might be unclear, as yet, how. It may come into play more strongly in cross-border ecommerce.

The rise of mobile payments is also driving peer to peer payment. As many people pay for shared pizza using their phones and the amount of cash in use declines, banks need a slice of the pie moving forward. P2P systems are taking over from cash and moving us closer to a cashless, or at least cash-less society.

Sources:

https://www.finextra.com/blogposting/15106/network-effects---the-forces-driving-ongoing-payment-trends

https://banknxt.com/55277/network-effect/

Peer-to-Peer Payments - The Network Effect

The network effect is best described as greater use of a product resulting in an increase in its value. If you think about the telephone or social media, you can immediately understand why the more people are in a network, the more useful it is. Collaboration is one great way to increase the effective size of a network and thus the value and utility of the product. In financial transactions, this mostly refers to P2P (person-to-person) transactions. The more of your friends are in the network, the more useful it is.

The banking world's on-again-off-again relationship with collaboration has lasted since the industry's early years. At the dawn of the internet, most banks tried to build their own P2P solutions, individually. They lost out to the payment giant PayPal, especially as many delayed in embracing the true potential of digital networks.

The truth is that payment systems benefit heavily from a larger number of transactions. This is why PayPal beats out individual bank solutions to the point where many small businesses no longer bother with a merchant services account. PayPal's rival Square, more focused on face-to-face transactions, has also lured away sole proprietors and micro businesses.

The banks have finally clued in with the launch of Zelle, an API-enabled network with more than 30 partners, designed to work with thousands of banks and millions of consumers. The basic premise of empowering the network with more participants and transactions can thus be used to benefit smaller banks. MasterCard and Visa have also expanded the use of open APIs to encourage larger networks. Blockchain may also affect the development of P2P systems, although the technology is new enough that it might be unclear, as yet, how. It may come into play more strongly in cross-border ecommerce.

The rise of mobile payments is also driving peer to peer payment. As many people pay for shared pizza using their phones and the amount of cash in use declines, banks need a slice of the pie moving forward. P2P systems are taking over from cash and moving us closer to a cashless, or at least cash-less society.

Mobile Payments are Revolutionizing Commerce

When the first mobile payment was rolled out two decades ago, no one would have predicted that the trend would take the world by storm a few years down the line. By 2015, the global mobile payment revenue was $450 billion, and the figure is projected to surpass $1 trillion in 2019. Mobile payments are becoming more and more popular among mobile phone users, and unlike in the past where this mode of payment was mainly used for online purchases, in-store payments are also going mobile with technologies such as beacons and NFC. By 2020, for example, the value of proximity mobile payment transaction in the US alone is estimated to exceed $314 billion.

Reasons behind the rise of mobile payments

Increased adoption of mobile wallets

The introduction of Apple Pay on Apple smartphones back in 2014 spurred the rise of mobile wallets, and now we have several mobile wallets such as Microsoft Wallet, Samsung Pay, Android Pay, and Google Pay. The inclusion of these wallets on most smartphones today and the growing number of smartphone users in the world largely contributes to the prevalence of mobile payments. For example, more than 80% of Americans were reported to own a smartphone in 2017, and since a vast majority of them bring their devices with them everywhere, they can easily make payments on the go.

Mobile Payments offer more security to consumers

The modern consumer feels more at ease with mobile wallets compared to walking around with cash or even smart cards. Most smartphones present consumers with biometric technologies such as fingerprints and facial recognition which they can use to step up the security of their mobile payment systems. By installing such security features, consumers eliminate the need for passwords which can easily leak or get stolen.

The prevalence of contactless payment terminals

As consumers continue to adopt mobile wallets and use their smart devices to make payments, most brick-and-mortar stores are also updating their payment terminals to keep up with the trend. An example of such technology is the use of beacons in retail stores which allows customers to pay for items from any location in the store using Bluetooth devices. Another example is the use of NFC chips in checkout terminals to enable customers to make payments by just holding their mobile phones near the terminal. However, unlike with NFC, the beacon technology does not require the customer to be at the checkout terminal hence one does not have to endure long queues in a crowded store. The convenience of this technology, its security, and ease of use has greatly fuelled the rise of mobile payments.

Banking services are increasingly going mobile

Most consumers are now comfortable with mobile wallets and payments, and this has forced banks and credit unions to avail their services on easy-to-use apps that customers can install on their mobile devices. Such services include cash transfers, bill payments, currency conversions, and more, which enable consumers to access and manage their finances effortlessly from their smartphones.

Mobile payment systems can easily be tied to loyalty programs

Most retailers are now integrating their in-store mobile payment systems with reward programs. This encourages most customers to use their mobile devices to pay for in-store purchases since they can easily earn points every time they make a purchase, and the rewards are also easily redeemable.

Consumers are looking for convenience and speed, and it is indisputable that mobile payments will continue to thrive. It is therefore crucial that retailers keep up with trends such as contactless payments to remain relevant in the overly competitive sector. To learn more about our mBeaconPay and mBeaconSAM solutions and how you can use them to automate your check out terminal and improve customer service in your store, talk to us.

Cash a Thing of the Past? More Millennials Turning To Mobile Payments

The question "Will you be paying with cash?" may soon become a thing of the past.

You read that right. More and more millennials are stepping away from cash and opting for mobile payments instead. As mobile payments become more prominent, cash use is expected to decline even further. The Innovation Group at J. Walter Thompson Intelligence has released "The Future of Money" report, revealing the global changes that are ahead of us in banking. Advances in the tech industry allowing for mobile payments are being embraced by millennials.

The report showed that sixty-three percent of millennial consumers rarely use cash. Seventy-five percent of millennials said they want more diverse financial products, that could be more suitable for their needs. Older consumers aren't as happy with the changes in technology. Millennials are twice as likely as baby boomers to use mobile payment options. 

What Does This Mean for the Future of Banking?

Banks will have to adapt. It is anticipated that millennials will outnumber baby boomers by 2019. If banks do not come up with efficient mobile payment options that meet their customer's needs, they will be left in the dust. Technology is continuing to expand and it's a race to keep up. 

Millennials are demanding more for their payment options. They want their bank brands to have good ethics, services, and most importantly, technology. Banks need to adapt to these demands, or they risk becoming obsolete. 

Netclearance offers a mobile payments option that meets every millennial's needs. They offer a technologically-advanced option that is continuing to grow with the times. As cash becomes less relevant and smartphones become more relevant, you can expect mobile payments to be a big part of the future. As a result, Netclearance has created a mobile payments solution that works for every age group.

Mobile Wallets: The Fast Lane for Payments

One-click payments revolutionized online sales because of their ability to offer convenience and efficiency to the customer. Brick and mortar stores have had to adapt to the fierce competition of their online counterparts by focusing on creating unique experiences for shoppers. Nevertheless, with the mobile-first Gen Z beginning to increase its share of the consumer space, customer experiences alone will soon not be enough to keep these fast-moving customers from viewing products in-store but then completing their checkouts much faster online.

A Generation Integrated with Tech

Over the next two years, there will be a 39% rise in the use of mobile wallets. Consumers want to spend less time at cash registers, or in line, and more time enjoying their new products. This trend presents brick-and-mortar stores with a new dilemma: decreasing checkout times. Immense marketing efforts to bring customers into stores and through the checkout line used to be enough. With the advent of mobile payment technology stores must now seek more modern solutions for their clients. It is essential they create a system with seamless transitions between their sales experience and the time it takes the customer to complete their purchase.

Catering to a New Type of Customer

The proposed solution with the broadest acceptance has been self-checkout. These lines allow customers who prioritize speed and efficiency to complete their purchases with a few taps on a screen. This solution, however, requires state-of-the-art technology that will meet the demanding needs of its customers. Another strong trend is individual Points of Sale (POS) terminals located within convenient reach of the customer. POS terminals accept mobile wallet purchases; these quick payments will decrease wait times and increase customer satisfaction. At Netclearance, we have created a Mobile Smart Payment Terminal, the mBeaconPay, which allows retailers to continue to focus on generating unique and personalized experiences rather than worrying about having a line of waiting customers.

Taking It One Step Further

Another movement guiding the paradigm shift toward mobile wallets is the Internet of Things (IoT) revolution. The advent of wearable technology has taken mobile wallets one step further with gadgets like smartwatches. Netclearance's response to the IoT revolution was mBeaconSAM. mBeaconSAM allows for next-generation mobile payments through a state-of-the-art Bluetooth 5 payment beacon. It fits perfectly into existing terminals like the mBeaconPay and instantly gives vendors the ability to accept payments from any smart device.

Online sales are dominated by the speed and efficiency of credit cards on file and one-click purchases, and now, thanks to technology like the mBeaconPay and mBeaconSAM, traditional stores do not have to worry about competing with the automated checkout process of the worldwide web. For more information about our next-generation mobile payments and smart terminals, contact us here.

Improving The Relationship Between User Experience and Payments

Alternative payments are causing a major disruption in retail as customers look for faster and convenient ways of paying for products, and a majority of stores are now diversifying their payment methods to eliminate the risk of being faced out. However, even as the number of retailers adopting alternative payment methods increases, most are still losing customers at the critical check out stage.

Consumer behavior has rapidly evolved, and the purchasing experience is now as important to customers as the products you are selling. The modern consumer is looking for excellent customer experience and convenience, and if they fail to get it from you at any stage of the purchase process, then you risk losing them forever. However, most retailers still don't understand how much impact these two aspects have on their businesses.

In a recent market survey, 95% of consumers confirmed that good user experience is of essence when it comes to making purchases. Excellent user experience does not translate to a fancy website. It also takes into consideration how easy it is for customers to make payments to your store, even when they are in-store. It is therefore vital that you evaluate your checkout point to ensure that it delivers a seamless experience to consumers.

How retailers are boosting the in-store experience

Mobile wallets and mobile payments are increasingly becoming popular with consumers due to convenience, and customers expect you to replicate the same level of service at your POS terminal. They want to be able to make their payments fast and spend as little time as possible at checkout. Delivering this experience may seem a difficult task for retailers, but emerging technologies that enable contactless payments are making it easier than ever. 

One such technology is Netclearance's smart payment beacon technology  which gives consumers a lot of payment freedom because they can pay for purchases without having to interact with sales associates in a store. Beacons cover a wireless range from few inches to up tens of feet, which gives them a competitive advantage over any other proximity payment method. With this technology, users can connect to your POS terminal from any location in your store hence they don't have to wait in long queues to make payments. All the customers needs is a BLE enabled device -- which now comes with most smartphones (98% of smartphones compared to less than 20% with NFC) -- and your POS beacon. 

To learn more about beacon technology and how our mBeaconPay and mBeaconSAM solutions can help you deliver seamless experience at your POS terminal, visit our website today.

Payment User Experience: Key To Building Customer Loyalty

As many businesses now offer similar products to a fixed customer base, it has become necessary to highlight areas of differentiation from their competitors. These areas of differentiation can help businesses cultivate loyal long-term customers.

One area that businesses can differentiate from their competitors is in customer experience. Research has shown that 86% of US adults are willing to pay more for a better customer experience. The same research also revealed that 89% of US adults switched to a competitor following a poor customer experience. 

One aspect of the customer experience that can be enhanced by businesses is that of digital payments. Some customer expectations when making digital payments include the following:

• Speed: Customers expect digital transactions to be processed instantaneously, with little to no delay.
• Simplicity: The payment process should be easy to understand and use, requiring as few steps as possible
• Security: Customers expect their transactions to be processed securely, minimizing the risk to their personal information.

mBeaconSam by Netclearance is a product that can meet the expectations of customers desiring an enhanced experience when making digital payments. Some of the features of mBeaconSam that serves to enhance the customer experience in making payments are:

• Payments: mBeaconSam allows customers make payments using their smartphones or any other wearables. It uses Bluetooth Low Energy (BLE) to allow this functionality.
• Security: mBeaconSam offers very high security and top-notch encryption. With its high-speed processors, crypto-engine, and secure memory, customers are guaranteed that their private information is securely maintained.
• Up to date: mBeaconSam utilizes cutting-edge Bluetooth 5 technology. It also allows backward compatibility with older technology. In addition, mBeaconSam keeps up with technological advances by allowing wireless firmware upgrades.

mBeaconSAM is a necessary product for any business that wants to differentiate itself from competitors by enhancing user experience. For any questions or further information about the capabilities of this product, contact us today.

The Future of Payments - Welcome Gen Z

We will be taking a look at the top 10 trends in payments, and how these could impact the industry and you. Today we start with the first trend, and it encompasses everyone born between 1995 and 2012. If you haven't already guessed, our first example is the Gen Z generation.

Right behind the Millennials are another group of consumers, and if you are a retailer, you should be paying attention to them. This group is collectively known as Gen Z, and by 2020 they will make up 40 percent of all US consumers. But what makes this generation unique?

Gen Z Are Digital

While Gen Z members are just teens and young adults today, they are the future for the payment industry.   The main difference in this group as compared to the previous generations is a technological one. Just imagine people that have never seen a world without Google, Apple, Amazon, or even Facebook. This is Gen Z.

Gen Z members are digital by default. They are both empowered and driven by their mobile devices. If they had to choose between their smartphones and television, friends, or money, they would take the smartphone. That is how ingrained they are in technology.

Gen Z Is Mobile First

Gen Z members are drawn to mobile apps. When compared to Baby Boomers, they are over four times more likely to use the apps on their smart devices. Gen Z wants their mobile wallet to make the decisions for them if at all possible. An intelligent digital wallet using our mBeaconPay solution would be ideal for these smart consumers.

Gen Z will be the first group to permanently exchange the leather wallet for the mobile digital one. This should illustrate the dependence they will have on digital payment methods. This is why technology like our mBeaconSAM, with its ability to enable existing payment terminals to accept app-driven mobile wallet payments, is crucial to meeting the needs of these consumers. 

Gen Z Buying Is Driven By Instant Transactions

When it comes to purchases, Gen Z is motivated by instant transactions. When they see something for purchase, they are more apt to buy immediately. They don't plan ahead for most purchases, so if this window of opportunity is missed, the process of selling to them will have to start over from the beginning at the next opportunity.

In-store proximity marketing capability will help to capture that potential sale moment for the Gen Z member. Our mBeaconSAM enables proximity marketing and is a natural fit for these mobile first, instant buying consumers.  

Gen Z Will Have Powerful Buying Influence

The smart and savvy Gen Z members will have tremendous sway in the buying habits of the other groups. Being so immersed in technology, Baby Boomers, Gen X, and in time even Millennials will look to Gen Z for advice on products and services. Gen Alpha, those born after 2012, will look up to Gen Z for guidance as they embrace their technology.

The importance of being ready for the next generation of buyers cannot be overstated. Smart digital embracing consumers will use whatever system is in place for them and ignore those that are not ready. Contact us today to see how we can help you be prepared for the next generation of active consumers.

Alternative Payments are About to Enter the Transaction Landscape

Over the last few years, companies like Amazon and Venmo have made inroads into the payment processing business that were noticed mostly because of their recognizable names. Now, thanks to a new EU regulation, the alternative payment industry has gotten a big dose of rocket fuel. This regulation forces banks to provide third parties with access to customer data (with customer consent).

The third parties in question aren't advertisers, as some may fear, but instead are alternative payment businesses. This will greatly change the payment processing landscape by taking control out of the hands of the banks and traditional payment clearinghouses. That, however, isn't all it may do. According to an article in Wired Magazine, it could devastate the banking industry.

Why is this a Big Threat to Banks?

The big threat, Wired says, isn't just that people will use outside payment methods - it's that banks lose exclusive access to the huge amounts of data that they currently get. This will gum up their automated risk prediction engines and force them to spend the time and money to develop individualized risk profiles for every loan applicant. Meanwhile, big tech companies like Google will be able to vacuum in data from the accounts of everyone who does any kind of business with them, giving them a huge advantage over any single bank.

Is this Really the Apocalypse for Banks?

There is no way to know for sure, but it is doubtful. Banks have existed, in some form or other, for thousands of years. That said, it is all but certain that a time of realignment and upheaval is about to come to that industry as it adapts.

To be prepared as a merchant, you should set yourself up to accept payments via a wide variety of clearinghouses. Netclearance's mBeaconSAM and mBeaconPay make it easy for you to do this. Give us a call to learn more about our expanded payment acceptance solutions.

Alternative Payments Pressure Traditional Banks to Innovate Fast

Mobile wallet technology opened the door for customers to access accounts and engage with their financial institution with ease. Now that smartphones are taken for granted, so are many of the conveniences that once seemed miraculous. But now isn't the time to stop innovating. As non-financial organizations begin to adapt to their users' behavior they are recognizing the need for flexible payment options, voice-driven transactions and AI-powered purchases. Regulators have taken notice and are now encouraging traditional financial organizations to embrace open banking initiatives. In other words, third-party APIs can reach into customer bank accounts and make payments on behalf of the customer. 

Open Banking and Innovation

This month, European and British banks will participate in open banking initiatives as part of the European Commission's Second Payment Services Directive (PSD2). For consumers who prioritize convenience over traditional security and a private payments infrastructure, this directive allows them to enjoy the flexibility of third-party payment systems without ever having to access a mobile bank app. That's a problem for banks because it decreases customer engagement with bank services and because it limits the payment data that, as David Birch writes in Wired, "Banks need ... to develop new value-added services..."

Open banking stands to diminish future innovations and limit consumer services that traditional banks can provide to their clients.

Staying Competition

Amazon, Google, Facebook, Alipay, Venmo and others stand to edge out traditional banks but there are strategies and technologies that traditional financial institutions can leverage to stay competitive. To appeal to the demographics most likely to rely on alternative payment systems, banks and other institutions can harness wireless proximity beacon technologies that integrate with existing business application systems. Backed by Secure Access Modules (SAM) beacon technology has the capacity to perform with as much flexibility as alternative payment technologies, but is still a part of a bank's network. 

As part of the bank's existing payment infrastructure, wireless proximity beacons securely capture payment data where it can be accessed by authorized parties within the client's bank. The client is able to make payments via their tablet, smartphone, retail mobile payment terminals and even manage peer-to-peer payments. There are also capabilities that allow bank customers to access cryptocurrency wallets.

By keeping pace with customers' technology preferences and offering secure end-to-end services, traditional financial institutions can maintain their century's old advantage.