mPOS is Wasted on Micro-merchants (ppt version)

I wrote this deck for the mPOS World conference in Frankfurt, 1 July 2015.

It’s based on a blog post from late last year.


Apple Pay not yet ripe

Last week’s announcement of Apple Pay’s UK launch brought that day a step closer.

This isn’t the first mobile payment product, so why the fuss? Partly because it’s from Apple, of course, but mainly because Apple Pay, unlike some previous attempts, actually works.

Take an iPhone 6, press your thumb to the screen, tap it against the shop’s contactless payment terminal and you’re done.

No need to unlock the phone. No need to input a passcode. No QR code. No question, it’s going to be a great user experience.

But don’t expect too much too quickly.

Most British shoppers don’t have the right device. Apple Pay only works with the iPhone 6, which accounts for just 20% of new phones sold in the UK and, of course, a much smaller proportion of the phones currently in people’s hands.

Barclays, the nation’s biggest card issuer, hasn’t agreed to participate yet, so even some iPhone 6 owners won’t be able to use Apple Pay.

As importantly, the payment industry has got itself into a pickle around how contactless transactions are processed. This risks making the experience at point of sale unnecessarily confusing for staff and shoppers and reducing uptake.

Contactless transactions are currently limited to £20. This will rise to £30 in September. For the higher amounts, the payment terminals will need to go online to get the transaction authorised.

If it’s a broadband terminal this will add a slight delay, or if it’s one of the 250,000 dial-up card machines still active in the UK, a rather longer one. Less tap and go –  more tap and pause and go.

Apple Pay isn’t restricted to £30. There is already provision for ‘high value’ contactless transactions to be processed, provided they are validated by a security protocol from the cardholder’s phone.

However, last week’s Apple Pay publicity revealed that some payment service providers hadn’t yet made the necessary technical modifications to their systems.

Retailers would be well advised to suggest their suppliers get moving, and to train their staff that contactless behaves differently according to the transaction value.

There’s one more wrinkle that retailers need to know about. Apple Pay dynamically generates a new card number for each transaction.

This means that any service that uses card numbers to track shopper behaviour to provide CRM or loyalty/rewards is going to struggle. Card-linked offers may become a thing of the past.

Although there will be teething troubles, Apple Pay has legitimised mobile payments in the eyes of mainstream commentators and the general public.

It will spark a wave of innovation and will make life easier for those that follow, such as Samsung Pay or Zapp.

Initially, Apple Pay will work well in high volume/ low ticket value applications such as rapid transit or sandwich shops in which there is already a high propensity for contactless payments.

Elsewhere, retailers that have not yet upgraded to contactless payment terminals will need to make a judgement, based on their customer profile, about when or whether they will lose sales if they can’t accept Apple Pay.

Longer-term, service-led retailers should look to phase out card machines and move the transaction to an app sitting on the shopper’s device, for which Apple Pay also offers a very neat payment mechanism.

And it is here that the real payment revolution will begin.

This post originally appeared in Retail Week (£).

REVIEW: Mobile payments reach escape Velocity

The mobile payment revolution begins with restaurants. Diners love the freedom to pay and leave when they are ready without all the back and forth of paper bills and card machines. The restaurants can turn the tables quicker and, for the first time, build data-heavy profiles of their customers. And most importantly,  the staff love the higher tips that diners leave when they pay digitally.

Restaurant brands need to decide whether they want to build their own payment app or partner with one of the growing number of third party ones that hope to offer diners the ability to pay in many different establishments. Of course, restaurants could do both. It really depends on their brand, the frequency of visits and their approach to owning customer data.

The latest app to launch in the London restaurant scene is Velocity. I met Zia Yusuf, the CEO, this week and then tried out the app at Aubaine, just off Regent Street. I was really impressed. Apart from a couple of typos, it was a very smooth experience and will be a formidable competitor.

Here’s out it works.

Velocity home screen
Velocity home screen

First, you download the app. Graphics are lovely and the whole experience is heavy on the aspirational branding. There are plenty of glossy photos of impossibly beautiful people drinking cocktails but the designers haven’t been afraid of black space either.

Critically, Velocity offers registration by Facebook. Zia told me that over two thirds of users opt for this. With one touch, Velocity has your name and email address plus all the demographic information they could ever need. There is a link to T’s and C’s and a privacy policy but I’m guessing very few people click the link.

One of the challenges ahead will be to negotiate the minefield of what information can be shared with the restaurants. The subject of who owns or has access to the customer data is always a lively discussion.


Velocity picks up your photo from Facebook – another reason to make sure it’s an appropriate one – and also prompts for your phone number. The registration steps are well signposted.


Velocity asks to use your location information….


… then suggests where you might be. In this case, there are two restaurants next to each other. I was in the second one, Aubaine.



Next, you save a payment method. You can load multiple cards, including American Express, and the app offers a neat option of splitting between business and personal. Velocity is anticipating a lot of usage from expense account diners.


Velocity prompts you to take a photo of the card but you still have to complete the expiry data, CVV and your post code.

velocity amex

Now you’re registered. Cue a welcome email featuring some more of those beautiful people.


Next you need to tell the waiter that you want to pay with Velocity.


The waiter asks your name and then goes to the EPOS terminal where he’ll  see a list of Velocity customers in the queue to be checked in. If the EPOS supports it and if you have registered by Facebook, your photo will appear on the EPOS which should make for easier identification.

This a quite a manual process involving a conversation between the you and waiter. My waiter at Aubaine said that a Velocity rep came in regularly to keep awareness among the staff high but it would have been good to see some Velocity branding on the tables too. Zia told me that they have this at some other clients.

If it works smoothly, the conversational approach to matching the diner with the check should be elegant and seamless for the customer and will suit some restaurants very well. But a very busy establishment in which staff are greeting and taking orders from multiple parties might prefer an app that generated a code or that required the diner to input his table number into his phone in some way.

Most restaurant apps ask you to press a “check out” button when you want to leave. At this point, the app pulls the check from the EPOS system. Velocity is different and pulls information from the EPOS every few seconds meaning that your check is always accurate and available in the app.

It was mid-morning so I ordered a cup of tea.


Recognising the abundance of food porn infesting the Internet, Velocity helpfully provide a camera button so that you can photograph your meal. Most people won’t get to this screen until they’ve finished so there’s a risk of a few shots of empty plates.  If you wish, Velocity sends the photo into Instagram with the restaurant’s #tag included for your convenience.  Here’s my cup of tea with the contrast cranked up and the Valencia filter applied.


This feature will be very attractive to the restaurant marketing teams who are very keen to encourage social sharing.

After you hit the pay button, you get the chance to split the bill with friends. You can divide the bill equally or split according to a percentage. Sensibly, you don’t have the option to pick and choose which items you ate. That way lies madness.


Next, tipping. Aubaine include service in the bill so Velocity sets the tip at zero but you can add extra if you wish.


The app presents the payment cards you have pre-loaded and you choose the one you want to use. Velocity doesn’t ask for the CVV code. This makes for a better user experience and means that you could genuinely leave your card at home. On the other hand, transaction processing costs will be higher and there will inevitably be a greater risk of fraud.

Velocity uses the Judo Pay gateway which forwards transactions to the restaurant’s acquirer of choice.



After payment, Velocity allocates you some points. I only earned three for my cup of tea which puts me a long way short of the 5000 I need to redeem a prize. It’s a personal view, but I think the “payment accepted” text should be larger and more central. People won’t want to leave the restaurant until they’re absolutely sure they’ve paid.


The app then asks for a rating and offers the opportunity to leave a comment for the restaurant manager. I’m not sure what “null” is about. I expect it’s a blank field where “Aubaine” should be.

Zia told me that participation rates were high for these features and that they were highly valued by the restaurants.

Finally, you can order an Uber or share your staus via one of a number of social networks. A neat touch is that you can see straight away how long you’ll need to wait for a cab.

Less neat is the thank you from Nozomi, a Chelsea sushi place noted for its monochrome dining room. I’d not eaten at Nozomi. I’d been a customer of Aubaine.


Receipts are nicely stored with clear summaries and the ability to drill down if needed.



You get an email receipt as well. This includes a short motivational message.


Another nice feature is  the FAQ section.


Velocity wants to be more than just a payment app. It includes a discovery tab with glossy photos of other local restaurants that accept Velocity.


The plan is to be able to book a table directly from the app but you’ll have to content yourself with a phone booking right now.


Restaurant payment apps are hot at the moment and there are more competitors in this space than there is room for in your smartphone. Many will fail but, of those I’ve seen so far, Velocity stands a better than average chance of success. The design is good, the experience elegant and the management understand the importance of delighting both restaurant and diner.