Tracking 2014 in Alt Payments

By: Kerri Moriarty

It is no secret that major developments are happening in the alternative payment space on a nearly daily basis. Each player is striving not only to revolutionize payments but also to do it before anyone else. At Partner Advisors, we are always tracking the latest movements. Here is a look at what’s been happening lately:

Apple: Apple announced plans for Apple Pay, its mobile payment platform, in early September. Apple Pay will allow users to pay for purchases by holding an iPhone or Apple Watch close to a sensor equipped with NFC technology. Users will touch a fingerprint sensor on the iPhone to approve and confirm the transaction. Card information is stored using the Secure Element, a chip within the device that uses tokenization to prevent account information from ever being sent to the Apple servers or merchants. Instead, the iPhone generates a proxy number that it provides for the purchase that is protected by a uniquely generated code. Payments will run on the same system for issuers as standard credit card transactions and will be rewarded in the same way. Apple Pay will become available for iPhone 6 as part of iOS 8 coming in October and will be available for the launch of Apple Watch but will not be available for earlier iPhone models or other Apple devices.

Retailers Accepting Apple Pay:

  • Apple
  • Babies’R’Us
  • Disney
  • Macy’s
  • McDonald’s
  • com
  • Nike
  • Nordstrom
  • Panera Bread
  • Petco
  • Seamless
  • Sephora
  • Staples
  • Subway
  • Toys’R’Us
  • Walgreens
  • Whole Foods

Issuer Partners:

  • American Express
  • Bank of America
  • Barclays
  • Capital One
  • Chase
  • Citi
  • NFCU
  • PNC
  • US Bank
  • USAA
  • Wells Fargo

Amazon: Amazon has largely kept quiet about plans to leverage payment capabilities keeping everyone wondering how and when they would emerge into the space. Following the October 2013 launch of “Pay With Amazon” and December 2013 acquisition of POS solution provider GoPago, Amazon has since released its own smartphone, Fire, with proprietary technology, Firefly. Firefly recognizes images and includes purchase capability through the device. The beta version of Amazon’s mobile wallet comes pre-loaded on the Fire, though it currently only supports loyalty and gift cards. Finally, utilizing GoPago’s software, Amazon has released Amazon Local Register, a mobile card reading device. In direct competition with Square and PayPal, Amazon has entered the space with a discounted rate and fee model in order to attract customers. Until January 2016, Amazon will charge 1.75% per swipe compared to Square’s 2.75% and PayPal’s 2.70%.

Stripe and Alipay: Payment startup Stripe partnered with Alipay earlier this summer to facilitate international shopping for Chinese customers. Prior to the partnership, Chinese customers needed a dual-currency international credit card to shop overseas making the experience a hassle. Now, a business partnered with Stripe has functionality to instantly accept Alipay payments, with no additional hassle involved, giving businesses access to over 500 million new customers. Alipay is the largest processor of online and mobile payments for Internet services. Last year, the company processed $519 billion in payments. Nearly half of all online payments in China are handled by Alipay.

Square: Rumors of Square’s demise have been floating around for months, including news of the less than ideal results of the partnership with Starbucks. In an effort to rebuild and remain profitable, Square has launched several new initiatives this year and is planning for several more in the coming months. Earlier this year, Square launched Order and Feedback. Order allows customers to “cut the line” by placing an order at a merchant through the app and simply going in to pick it up when it’s ready. Feedback lets merchants collect customer feedback directly through the receipt that is automatically sent to a customer after a transaction. Next up are efforts like Market – a platform for individuals to create and launch their own e-commerce stores, and Open Ticket – a full service software system for sit-down restaurants using an iPad to send orders to the printer in the kitchen and print checks and receipts from the front of the house. Also on the docket are Capital – a source for merchant financing payable through a percentage of swiped card sales, and Appointments – an online scheduling system that manages your calendar and automates reminder emails. Stay tuned to find out whether these products sink or swim.

Visa Checkout: Visa rolled out Visa Checkout, an updated version of earlier payment technology, as an effort to overcome the hassle of needing to enter card information at online checkout. Visa emphasized this is not to be considered a mobile wallet, but simply a digital form of the plastic Visa card living comfortably in your wallet. This version can be embedded directly into the e-commerce site so a user won’t need to leave the transaction for a new website the way PayPal and require.

Sources:, CNBC,,, WSJ, Reuters

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