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Payment giants developing new technology

Sep 04, 2012 Dave King

Payment giants developing new technology
The payment processing and merchant services industries have been flooded with competition in recent years, as more smaller firms devise new products to improve efficiency and cut costs. This competition is excellent for the average merchant, as well as consumers, as costs for services continue to drop.
 This shift in the industry has been marked by many major merchants and manufacturers partnering or acquiring younger, smaller merchant services firms. Some examples include Starbucks, Wal-Mart and other industry giants choosing to use a payment processor's services exclusively, many of which were smaller, brand new companies. To remain relevant in such a young market, older providers of payment processing systems are beginning to come up with their own new products, using their much more seasoned expertise and strong visibility in the marketplace to compete. David vs. Goliath
LoanSafe recently reported that Visa has launched a new payment processing technology that involves a secure card-reading device. The system, called Mobile Point-of-Sale (mPOS), is being launched in Thailand, while it works to improve the efficiency, security and convenience of card and mobile-based payments. There are still some issues that need to be assessed before full deployment of the system. "The mPOS device needs approval from both Visa and card issuers before sending it to merchants, and it also needs a PIN to identify each merchant," country manager Somboon Krobteeranon told the source. "In the case of a counterfeit card or mPOS device, it is detectable. The mPOS device will also delete a client’s financial data automatically after a payment is completed and the data will be collected by the card issuer." Like many products, the card issuer will likely assess the success of the system in Thailand before deploying it in other countries, such as those in Europe and North America. David strikes back
Social media firm Square recently announced it would charge a flat rate to customers for use of its services. The firm, which was involved with Starbucks in a major partnership last month, has started to lead the mobile payments market, and is expected to keep growing through the next few years. The competition in this market will likely carry on for years, which should serve merchants well. As credit and debit swipe fees continue to hinder profits, merchants now have more options to more successfully manage budgets.