Enabling Technologies

All the 9 Payment Enabling Technologies & 22 Illustrative Companies

MEDICIFounder and Chief Strategy & Innovation Officer

At Lets Talk Payments, we keep analyzing all the data, payment news and insights we are generating to see if we can understand some broader trends. Here is an attempt to look at almost two dozen startups and companies we have profiled in the past. We are looking at them from the viewpoint of understanding various enabling technologies that they are using in their solutions -  NFC, QR codes, SMS/USSD, RFID, Sound Wave, Bluetooth BLE, and others. We have tried to cover mostly providers or payment companies but in some cases the merchants or implementers (such as Starbucks) could not be ignored. Starting with the 30,000 ft view first, followed by a drill down to companies wherein each picture is clickable and takes you to that company profile. Below is a chart that puts all the payment enabling technologies and all the companies together at one place.

Chart showing selected payment start-ups, Year Founded, Total Funding till date and Enabling Technology:

Source: Lets Talk Payments

Lets discuss the payment enabling technologies being used by various companies in the payments space:

1) Near Field Communication (NFC): NFC is in its most common avatar is a Tap & Pay solution that can be used for retail offline payments, transit, entertainment and numerous other touch points. Any unattended payment situation such as a parking lot presents huge opportunity. For e.g., clipper card or any cashless cards being used today for public transport can be integrated into the ubiquitous phones itself thereby making the public transport payments easier. Below we have Tapit and Disney's wristbands  (Click on the pictures to view our article on the company)

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2) QR Codes and Bar Codes: A Quick Response (QR) code is a 2d readable barcaode designed originally by DENSO Corp. in 1994 for Japanese auto-makers to track parts. With smart phones, and QR codes, customers can stores their banking account information on their phones, go into a store pick out an item, and instantly scan its barcode and check out. Below we have Ensygnia, Frontflip, Kuapay, Paydiant, and Starbucks (Click on the pictures to view our article on the company)

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3) Soundwave:  These are payment systems that use sound waves to connect smartphones with another device. Secure payments are made over the cloud with the help of sound based technology and data is exchanged through smartphones' microphones/speakers. Microsoft's Dhwani and Verifone's Way2ride in New York are great examples. Clinkle is expected to be using sound wave technology similar to Verifone's Zoosh. Alipay recently launched a sound wave mobile payment system in Beijing Subway.

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4) BLE (e.g., iBeacons)Bluetooth low energy (BLE or ‘Bluetooth smart’) is a wireless computer network technology which allows connected devices to communicate with each other while keeping the energy consumption by the devices at a very low level. Apples iBeacon and PayPal’s Beacon are the front runners in the adoption of this technology.

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5) Mobile Card Readers: These include Mobile card readers, Chip and Pin card readers that insert into the audio jack of the phone. Some of the companies in this field that have been covered by LTP.

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6) Email/chat/Phone: 

You can transfer money through email (Dwolla, Paypal, Google), through Chat (Wechat from Tencent), and phone (Dwolla, others).

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7) Facial Recognition: 

How convenient would it be if you could make payments through facial recognition? A new trial project introduces a payment system which recognizes customers by their first name and "picture" via a mobile application.

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8) SMS/USSD, Mobile Internet: In SMS (Short message service) and USSD (Unstructured supplementary service data) based transactional payments, customer sends a payment request via an SMS text message or an USSD to a short code and a premium charge is applied to their phone bill or their online wallet.

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9) RFID: Radio frequency identification (RFID) is the wireless non contact use of radio frequency electromagnetic fields to transfer data, for automatically identifying and tracking tags attached to objects. The tags contain electronically stored information. According to researchandmarkets, the global RFID market is expected to generate revenues worth $3,925 Mn in 2016, increasing at a CAGR of 29.3%, from a value of $1,087 Mn in 2011.

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LTP View: What we are trying to understand is the whether there is a dominance of certain enabling technologies or business models. The above data shows that QR codes (currently) seem to be more frequent choice of more number of companies than other technologies. In terms of how payments companies are projecting themselves as a business - we see a lot of them calling their solution as a mobile wallet or app. If you look at the companies that came up in the last couple of years, the focus seems to be on new enabling technologies such as NFC, Sound waves and others.

We will be adding more to this analysis as we go (e.g., size of the bubble will represent traction, volumes, revs). We would also look at the companies from different angles, other dimensions (like the X and Y axis in the chart) in the coming weeks. In the meantime we continue to profile companies. For analysis, more the merrier. So stay tuned!

Also Read All the 12 Payment Enabling Technologies & 54 Illustrative Companies, a White Paper

 

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Amit Goel

MEDICIFounder and Chief Strategy & Innovation Officer

“Amit Goel is the Founder & Chief Strategy & Innovation Officer for MEDICI. Amit’s vision is to build a strong FinTech market network that involves financial institutions, banks, startups, investors, analysts & other key stakeholders across the ecosystem – helping each one of them in a meaningful way by removing the asymmetry of information and providing a platform to engage & transact.\ \ Amit is passionate about bringing actionable FinTech-focused insights, innovative products & services for the FinTech ecosystem. Some of his work involves startup scores, bank scores/assessments, predictive viewpoints & other innovations that have helped MEDICI’s customers and the ecosystem. He has been named amongst the Top 100 FinTech thought leaders/influencers in the world & Top 10 in Asia multiple times by reputed agencies, consulting firms as well as financial institutions. Amit has built MEDICI (formerly LTP) as a new-age, tech-enabled advisory/research firm, which is now considered the #1 global research & innovation platform for FinTech in the world.\ \ Amit has been writing pioneering viewpoints on financial technology space that have been ahead of the curve since 2010. His data-driven predictions have helped the customers as well as the ecosystem. His past work experience includes a strong background in strategy & market analysis and advisory to clients (from big business houses to Fortune 500 firms) in payments, commerce, financial services & IT/technology. In the past, Amit had also founded a successful consulting & research practice called GrowthPraxis and has worked at Boston Analytics, Frost & Sullivan, and Daimler Chrysler in strategy & research.”