Transformational payments solutions:Barclaycard has developed a new ‘Dine & Dash’ solution in the UK that allows customers to bypass the payments process and leave after they are finished with their meal. The new solution is driven by a small device placed on the table. The process works as follows: (1) customers tap the ‘Dine & Dash’ device with their mobile phone in order to check-in, (2) order food, and (3) leave after eating. The device will change color to denote successful payment. The solution is powered by the Barclaycard ‘Dine & Dash’ mobile application, where customers store their payment information. This solution was launched because Barclaycard research found that 36% of diners are frustrated with the current process of waiting for the bill, and 25% of customers would consider leaving the restaurant without paying the bill due to the long wait. Barclaycard will launch this solution in London in March. OpenTable currently offers a similar service called ‘Pay with OpenTable’ in the U.S. that allows diners who make a reservation through OpenTable to pay their bill via the OpenTable app and leave.
Regulatory landscape:In response to industry concerns, the Payment Systems Regulator (PSR), the official payments watchdog in the U.K., announced a plan to review the fees merchants pay for card-acquiring services offered by banks, as well as the quality of service they receive in return. As cards have become the most used form of payments in the U.K. since 2017, there is a growing concern that the rising costs associated with accepting card payments may eventually be passed on to customers, which would have a broad impact on the U.K. economy. The regulator is empowered to alter the market structure should it determine that the current fee structure is detrimental to customers.
Customers’ evolving expectations:Zillow, the online real estate company, announced new tools to allow renters and landlords to seamlessly send and accept applications and rent payments. Reflecting the growing trend in digital experiences and embedded payments, Zillow’s survey found that renters want the entire rental process from credit underwriting to rent payments to happen online – with close to 60% of the respondents expressing a desire to file an application and pay rent online.
Data:In-store contactless payments will exceed $1 trillion globally in 2018 according to the forecast from Juniper Research. This comes a year earlier than the research firm had previously expected. The number is expected to double by 2020 to reach $2 trillion and will represent 15% of all point-of-sale transaction volume. The estimate considers both dual-interface cards and mobile wallets, although card payments are expected to continue to account for a much larger share of contactless transactions.
Source: Juniper Research
New providers:GrubHub, the digital food ordering marketplace, agreed to acquire LevelUp, the mobile ordering and payments platform, for $390 million. The acquisition is expected to help GrubHub deepen the integration with restaurants’ point-of-sale systems and become a comprehensive platform that drives everything from demand generation to fulfillment. Currently, LevelUp almost exclusively handles pickup orders, a strategic area for GrubHub to expand into. LevelUp will allow GrubHub to not only push orders directly through the POS systems, but also provide customer relationship management and analytical tools to attract new diners and increase volume from existing diners.
- In a bid to further enhance the payments offerings on its Marketplace platform, eBay announced its plan to accept Apple Pay from customers and offer loans through Square to merchants selling on its platform
Apple Pay acceptance will first be rolled out on a limited scale this fall; eBay expects to add more front-end checkout options as it transitions to allowing users to checkout directly from eBay, instead of going through a third-party provider like PayPal
On the merchant side of the equation, eBay’s partnership with Square Capital will see loans of up to $100,000 being offered to a potential base of millions of sellers. The partnership gives Square access to data on a wide range of merchants within the eBay marketplace and an opportunity to expand further in a product segment that is key for its overall growth
- Walmart tapped Capital One to replace Synchrony Financial as the exclusive issuer of its U.S. credit card program
The new partnership covers both private label and co-branded credit cards and is expected to start in August 2019
Synchrony, the incumbent issuer with a two-decade long partnership with Walmart, expects to offset the impact to its earnings through other strategic options, including a possible sale of the portfolio to Capital One
- Foods Co., a California subsidiary of Kroger, will soon stop accepting Visa branded credit cards
- Kroger and Visa are clashing over interchange rates and network fees; merchants including Kroger pay ~$90 billion a year in such fees
The ban is expected to take effect at twenty-one grocery stores and five gas stations in Central and Northern California including San Francisco; Visa debit cards will still be accepted
- Facebook’s launch plan for WhatsApp payments across India is being held up by the Indian government over concerns about user data
- The central bank’s compliance standard requires payments providers to store user data on local servers to safeguard security and privacy
- India is WhatsApp’s largest market with 230 million users; limited beta testing of the payments service has attracted nearly 1 million people since February
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