npca ramp 2013 presentation
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Mobile Payments Today
Joe Randazza CEONPCA
Dave Banks CIOCumberland Farms
Mobile Payments Today
THE CUMBERLAND FARMS - GULF OIL
GROUPCumberland Farms
Since 1939, Cumberland Farms has been committed to providing
customers with tremendous value and excellent service. It began as a
small two-cow dairy farm, and quickly expanded to offer more items at
better prices than anyone else around. Today there are almost 600
Cumberland Farms convenience stores spanning 11 states across the
northeast and Florida.
Gulf Oil LP
Gulf Oil got its start back in 1901 with an oil discovery in Spindletop,
Texas. Today Gulf Oil is a premier gasoline brand throughout the
Northeast with over 2,000 branded locations, and many more to come
nationwide. Gulf owns and operates 11 petroleum terminals and
distributes from over 100 exchange and thruput locations. Gulf remains a
market leader in petroleum distribution as well as in the development of
next-generation alternative fuels and other state of the art solutions for
our consumer's engine performance needs.
Cumberland Farms SmartPay
• Originally launched SmartPay in March 2012 with PayPal– Big media coverage, great customer feedback– Pilot in 200 Massachusetts stores– Never achieved more than 1% penetration
• Re-launched SmartPay in Feb 2013 with ACH provided by NPC– $.10/gallon discount on gasoline
• Heavy promotion including TV, radio, store signage, and digital programs
– Included a mag stripe card option and ability to use for in-store sales
Cumberland Farms SmartPay
• Rewards program launched October 1
– Free dispensed beverage for every 30 gallons purchased– Coupon presented on phone, 15 minute time out– Several more programs coming soon to drive inside sales
traffic and customer loyalty
• Technical
– Proprietary ‘Payment Gateway’ developed by Cumberland IT , in partnership with NPC and Retalix (POS)
– Coupon program developed in partnership with KouponMedia
– Client apps developed to cover all smartphones - iOS, Android and mobile web
– Back end settlement reconciliation and error checking in Oracle
SMARTPAY RESULTS
• Huge consumer acceptance since day 1 of re-launch• 100,000 new customers within 3 months• 175,000 customers presently• 30,000 transactions per peak day• 11% penetration system wide
SMARTPAY APP
WEBSITE
SMARTPAY CONSUMERS SAVINGS
SmartPay Video
Mobile Payments Today
Jenny Bullard CIOFlash Foods Inc
Convenience store chain of
172 stores located in
Georgia and North Florida.
Corporate office
headquarters - Waycross
Georgia
Owned by The Jones
Company
Flash Foods, Inc.
Tech-Savvy–Loyalty Driven
2005 2008
2013
Flash Foods GoBlue Mobile• Developed in association with NPCA, Zingon and
Pinnacle• Supports NPCA mPay Technology based on
tokenization • Pinnacle POS• NPCA and Zingon developed the App To Flash look
and feel• Launched June 2013 in Beta mode for payment
only• Launched to the public October 2013 with payment
and offers.
Gas Prices
Offers
LOYALTY CARD
MOBILE PAY
AT PUMP
IN STORE
GoBlue Video
Mobile Payments Today
Danny Portal CIONPCA
MOBILE PAYMENT
“Mobile proximity payments accounted for only .01% of the $3.98 trillion in retail
point of sale payments in 2012. Javelin predicted that mobile adoption and
industry push for mobile payments that the total amount of mobile payments at
the point of sale would increase from $398 million last year to $5.4 billion in
2018”
NPCA has three solutions of mobile payment in the market with various
technologies.
Cumberland Farms - SmartPay
Flash Foods - GoBlue Mobile
The Spinx Company - Spinx Mobile
Mobile Payment Competition
• The Mobile Space is crowded
• Who do you want dominating the mobile space?
• What can you do now to prevent another insurgence of payment interchange?
• Your Customers are mobile, are you?
Near Field Communication (NFC)
EMV (stands for Europay,
MasterCard and Visa)
Big Data
Omni-Channel
Where is the ROI?
The “Cloud”
The “Tap” and “Go” World
Showcasing
QR Codes
Unsolicited Authorizations
Mobile
Payments
Customer EngagementMobile Shopping Coupons
Loyalty
Social Local Mobile
SoLoMo
PayPal Beacon
ACH for Mobile
• ACH has a low fixed cost per transaction, versus a % based on the amount of the transaction.
• ACH based transactions do not place a hold on the consumer’s bank account.
• Transactions on mobile wallet using credit cards will have a higher rate.
• Mobile is a natural extension to supplement retailers card based loyalty program.
Merchant Controlled PaymentPOS enabled Technology
MERCHANTSBANKS
Wallets
Banks, Issuers, Associations, Processors
Fees:Legislation
Litigation
Competition
The issue is that "the entity that enrolls the customer, controls the opportunities." To the
extent that mobile payments provides other values, mobile payment is the vehicle for a
broader effort to create a better relationship with your customer.
Who owns the customer…………….the phone is the consumer
“He who Enrolls; Controls” Richard Crone, CEO, Crone Consulting,
Single –Sided Market Platform Economics or Two-
Sided Markets
Merchant Issued, POS-centric
Solutions
Wallet Providers (PayPal,
Google, ISIS, Banks (MC/VISA)
Card-not-present transactions
Aggregated Fees (cash in/ACH/Credit/
Debit)
Merchant Funded Rewards Issuer provided Rewards, Rewards
funded by fees
Merchant Enrolled 3rd Party (Wallet or Bank) Enrolled
Fixed Fees
Merchant Issued Debit funds merchant loyalty
Traditional Interchange funds the Banks loyalty
71% of consumers say price is the most
important factor in determining where they
buy gas - “NACS 2013 Consumer Fuels Reports”
Benefits include:
•Redeem award travel for 5,000 fewer miles
•2 miles for every $1 you spend on US Airways
purchases and 1 mile for every $1 you spend
everywhere else
•Annual companion certificate good for
roundtrip travel for up to 2 guest for $99 each
•Zone 2 boarding and First Class check-in
It’s all about rewards
Retailer Bank Fees
The comparison to others: Fixed Cost vs. Percentage Based Fees.
Fuel Dispenser Inside
Average Sale 35.74$ 6.50$
Bank/Wallet Fee Percentage 1.95%
Bank/Wallet Fee Fixed 0.10$
Total Fee 0.80$ 0.23$
Effective Rate 2.230% 3.49%
Fuel Dispenser Inside
Average Sale 35.74$ 6.50$
Bank/Wallet Fee Percentage 0.00%
Bank/Wallet Fee Fixed 0.18$
Total Fee 0.18$ 0.18$
Effective Rate 0.504% 2.77%
Traditional Bank/Wallet Fees
National Payment Card Association
My Consumer Experience.
MPAY TECHNOLOGY•Designed as an open architecture that can be supported today
•Submitted to NACS PCATS
•Presented to TAC Technical committee in May 2013
•Supported by Flash Foods, Pinnacle ,Verifone, Gilbarco POS
•Merchant can brand the mobile payment to their name
•Does not limit working with other vendor mobile solutions
•Developed in house by NPCA
•mPay Web Service API supports multiple web service methods.
•mPay Web Service interfaces to the POS (manual token entry or directly
sent to the POS)
•POS interfaces with NPCA Financial switch to support mobile payment
through an ACH transaction to the consumers bank account.
NPCA PLATFORM
EnrollmentAuthorization
Settlement
3rd Party Apps & Wallets Point of Sale Company
NPCA PLATFORM
EnrollmentAuthorization
Settlement
QSR
Grocery
Convenience Store
Drug Store
BUILT FOR EVERYDAY SPEND”
mPay Web ServicesGetAuthToken ----- performs a pre-pre-auth on the
user request and returns a payment token.
ActivateStorePump----- sends a payment token (pseudo-card) to a Store’s POS controller to activate the pump
FindStores ---- returns a listing of stores that are within range of a geographic point (latitude, longitude)
GetStoreAddress ----returns the store address details for a given merchant code and store number
mPay Web ServicesGetTransactionResult -----The GetTransactionResult
method returns the details for either a fueling transaction or an inside store transaction
GetAllstores-----The GetAllStores method returns a list of all stores for a given merchant when the Merchant ID is specified
MPAY ARCHITECTURE• 6 digit BIN + 3 digit ID (identifies mPay) + 7 digit token + check digit
• POS builds the Pseudo account number
• 639471 777 1943221C (This is a Pseudo account number)
• Processed on existing NPCA rails and POS supported
• Consumer enters 1943221 Token at the pump or terminal
• Token lives only for the life of the transaction or times out
• Card is converted to real card number at the NPCA Host Services
• Secure payment process - POS never sees the account number of the consumer
• Token language is replaced with Authorization number for ease of understanding by consumers on the phone.
Financial
Switch
DB
Token - Account
MPAY1 ARCHITECTUREEmail / PIN
7 Digit Token
Existing Connections to
Financial Switch
mPay
Option
Consumer
Consumer
Enters
Token
Select mPay
Pump or
Inside Store
POS
New
Logic
Build Pseudo
Card #
According to
API Specs
mPay ServiceConsumer
Mobile
App
MPAY2 ARCHITECTURE• 6 digit BIN + 3 digit ID (identifies mPay) + 7 digit token + check digit.
• 639471 777 1943221C (This is a Pseudo account number)
• Processed on existing NPCA rails and POS supported
• NPCA Web Services sends Pseudo account number via a POS link to the Controller.
• Token lives only for the life of the transaction or times out
• Pseudo Card is converted to real card number at the NPCA Host Services
• Secure payment process - POS never sees the account number of the consumer
• Token language is replaced with Authorization number for ease of understanding by consumers on the phone.
Consumer
Mobile
App
MPAY2 ARCHITECTUREEmail / PIN
ACK
POS
Financial
Switch
Consumer
Provides Location
Requires Pump #
Bluetooth Beacon Technology
will Provide Additional Location
and Pump Info
DB
Token - Account
Auto
Activate
mPay Service
Existing Connections to
Financial Switch
Q & A