Category Archives: future payments

Note of Retail Week conference – Innovation in Payments

I chaired Retail Week’s Innovation in Payments Conference on 15 September in London.

Here’s my presentation followed by the notes I took of the rest of the event.

UK market facts (Payment Council)

  • 30bn “spontaneous” payments made by individuals every year
  • 49% of these are cash, ten years ago this was 70%

In one month, the average UK consumer makes:

  • 27 cash payments
  • 16 debit card
  • 6 direct debit
  • 4 credit card
  • 2 contactless
  • 1 Faster Payment
  • 5% of consumers rarely pay with cash at all. This number is growing.
  • 4% of consumers rely exclusively on cash. This number is not falling. These people tend to be older and find that using cash allows them to budget effectively.
  • 94% of adults have a debit card. 60% have a credit card.

Contactless payments are growing strongly and will account for 30% of all consumer payments by 2025. Today, contactless payments are mainly in grocery (37%), restaurant/takeaway (16%) and transport (10%.) Contactless usage is higher among ABC1s and younger people.

There are 11bn cash payments which could be replaced with contactless. These are in grocery (21%), confectionary/tobacco/news (14%) and restaurant/takeaway (13%).

Consumers are keen on remote banking. Only 25% are exclusively branch banked. However, just 33% use their bank’s mobile app. This will restrict the utility of “push” payments from bank apps such as Pay By Bank App (PBBA).


UK retail should benefit from £700m reduction in Interchange payments. This is equivalent to just 0.14% of retail sales so there’re really no way of telling if/when it is passed on to consumers.

Android Pay

Now live in the UK, Android Pay has signed a number of card issuers including most of the large banks. A big marketing push is planned for September.

The user experience for POS not quite as elegant as Apple Pay. For example, for a combined payment and loyalty transaction, shoppers need to make two taps of the phone. In-app seems better designed and Google are quoting some nice KPI’s from early customers in the US. One shopping app is receiving 20% of transactions by Android Pay with a doubled conversion rate.

Apple Pay is notoriously hard to speak to. One very large retailer told me that her organisation was offered one 20 minute slot – take it or leave it – with no refreshments provided. Apple Pay won’t even speak at industry conferences so Google will surely pick up some business for Android Pay just by being human. Google’s business model remains advertising based and it doesn’t charge retailers or issuers for Android Pay transactions.

Hillarys Blinds

Good case study from Hillarys which dominates the UK window covering market. Hillarys has over 1,000 agents out in the field measuring windows and providing instant quotes. Obviously, it makes sense for Hillary’s to try and take the money there and then rather than sending an invoice.

It wrote some bespoke software in 2005 for its agents to use to take customers’ card details on via their Hillary-issued mobile phones but this was not really compatible with updated PCI regulations. Instead, it wanted to use an mPOS device. The challenge was that 20% of UK homes do not have a mobile signal so Hillarys needed a device that could take transactions when offline. Adyen has done this with a solution from the airline industry linked to a Verifone E355. £20m of payments annually is going through these devices and customers very much like the idea of paying with chip & PIN in their own homes. Transactions are tokenised so that Hillarys can take balance and staged payments.

Harris & Hoole

This 42 shop chain of specialised coffee shops was owned by Tesco but has recently been sold to Caffe Nero. Harris & Hoole is now on the fourth version of its successful mobile app and can arguably claim to have the most effective on the market. The key components are loyalty, drink preference, payments and deep ePOS integration.

The payment wallet is pre-pay because pay per transaction card processing fees for very small amounts has been uneconomic. This has changed following the Interchange caps and post-pay would now be a viable option.

The app geolocates the customer within the store and prompts the customer to check-in. At this point, the customer’s name/photo/regular drink are passed to the ePOS so the server can say “the regular, Geoff?” If the customer says yes, a push of a button on the ePOS sends the drinks order to a screen above the barrista. If the app is set up for payments, then the stored value account is debited. If not, the server asks for cash/card payment in the normal way.

There is no way of telling for certain the business benefit of the app as H&H don’t know the behaviour of app users before they began using the app. However, H&H did reveal:

  • Orders from the app are processed 20% faster than others
  • 20%-25% of all orders involve the app. At Tooley Street, 46% of all orders are driven by the app including 15% of payments.
  • In 98% of stores >10% of orders come from the app
  • In 25% of stores >20% of orders come from the app
  • The app grew from 6% of orders to 18% when H&H retired the previous paper-based loyalty stamp card. This was a bold move but a successful one.
  • Where Apple Pay is offered to a shopper, it is used in 85% of cases
  • Support has been a headache, especially for Android as there are so many versions


This is a fast growing chain of Thai-inspired casual dining establishments that does a big lunchtime and post-work trade in central London. Table turnover is fast and many parties want to split the bill.

Busaba launched a pay at table app which allows easy bill splitting but also includes its “39 steps to enlightenment” loyalty programme. The app is based on MyCheck. In 2016, 83,000 transactions were made with the app to a value of £2.9m at an ATV of £38. So far this year 70,000 transactions have yielded £2.3 revenue with an ATV of £44.

The app has been downloaded 170K times (75% iOS) with 147K registered users and 100K regular users across 17 restaurants. Apple Pay usage is growing fast and doubled in the last quarter. As well as turning tables quicker, the app gives RFM and other useful CRM data.

The next phase is to add extra features to the app including e-gifting and order at table. The latter is expected to result in additional sales of drinks.


The big trend in grocery is more customers buying more often but buying less. 40% of people don’t know at 4pm what they will be having for dinner. Waitrose customers are increasingly polarised between “fast lane” and “slow lane” behaviour. Its payment strategy focuses on security, choice and ease and is based on a fully tokenised managed PED service from Verifone.

In the “fast lane,” Waitrose introduced QuickCheck, hand-held devices which can be used to scan merchandise before it’s put in the trolley. At the end of the shop, customers go to one of the self-checkout machines, scan a barcode and pay with their card. This has been around for twelve years and have some devoted followers. QuickCheck is being upgraded with new handsets and an alternative in which the shopper can download a QuickCheck app and use their own phone to scan the products.

Click on the image for an explanatory video
Click on the image for an explanatory video

The service is only available to MyWaitrose loyalty members. This ensure that Waitrose knows where you are in-store and can send you relevant communications for the department in which you are shopping. Scanning is the spine around which everything else is built. People still have to use the self-checkout machine at the end because there may be age-restricted items in the basket.

Self-scanning has been quite slow to take off. The move to shoppers bringing their own bags should help – the old bagging process is a major disincentive to self-scan – but Waitrose is also trying to overcome customers’ concerns about not wanting to look like a shoplifter.

Waitrose installed “skinny” self-checkout machines in one London store – no scales, no cash drawer – and improved customer satisfaction from 56% to 72% in a week. Queues fell and the store is doing 2000 extra transactions/week at £12 ATV.

Across its estate, 35% of all transactions are now contactless. This is six seconds faster than chip & PIN. Waitrose has one cash-free store. This is on the Sky TV campus but is a special design due to space limitations. There are no plans for any other cash-free outlets.

Waitrose is piloting the VF355 for queue busting and fulfilling non-standard orders eg picking up a turkey at Christmas. Waitrose is very happy with Verifone as a strategic partner.


London based healthy eating salad bar with 27 stores and ambitious plans.  Its USP is that you order a bespoke salad that is made in front of you. This is a great strength but also a major weakness because choice and customisation slow down operations. These have gone through four iterations.

  1. Order at the salad bar, pay at till – this was very slow and distracted the “tossers” from tossing.
  2. Order at the till and take a ticket to the salad bar – an improvement but was still too slow and resulted in a “mosh pit” of customers milling around the store
  3. Mobile app on which customers could pre-order for collection – nice idea but didn’t fit into how customers really have decide what to eat for lunch.
  4. Replace some tills with kiosks – nobody used the kiosks
  5. Replace all the tills with kiosks and forced the shift to self-service

In a typical store, six manned till points have been replaced with 17 tablet/kiosks, each with a Verifone payment terminal attached. Tossed spent a lot of time on getting the UI right having piloted in their head office canteen. Point One (the ePOS vendor) worked on the project.

The move to kiosk has taken cash out of the organisation completely. Nobody has complained. It has also increased the amount of customisation that consumers ask for which has put some pressure on production. Staff have been reassigned from the tills to production so net labour cost is the same.

This was a theme from the previous day’s Finance Director conference. A combination of Brexit and increases in the minimum wage means that retailers will need to ensure that scarce human resource is directed at things customers care about. In the Tossed example, staff are better employed making the product than with ordering/paymentt.


This is a well-funded mobile wallet that spun out of Imperial College Labs. It began with close loop applications and is present in 35 universities and 66 office restaurant locations. It reckons that 13% of the available spend is made through YoYo today.

Longer term, it wants to enter the High Street – it has signed Planet Organic – and use its consumer insight to combine loyalty, offers and e-receipts.

When a customer want to pay by YoYo, the sales associate hits the YoYo tender type button on the ePOS. The customer opens his phone, opens the app which produces a bar code. This is scanned by a scanner attached to a special YoYo box attached to the ePOS. Merchants are settled by YoYo directly and independently of their merchant acquiring relationship.


DigiSEq is a platform allowing the credentials of any contactless bank card to be provisioned to any piece of wearable technology. It’s a great concept although there are plenty of challenges. I blogged about DigiSeq here.


WoraPay has similar functionality to YoYo but doesn’t want to build its own brand. Instead, WoraPay offers white label payment/loyalty apps to retailers. It is has been picked up by the Lloyds Bank ventures team and is live at the Lloyds Bank staff canteens in which 10.200 man years are lost each year in queues.

At Lloyds, 1 in 3 lunch orders are now paid for by WoraPay. The app works very differently to YoYo. Customers order and pay for their food in advance via the app which gives them a virtual ticket to use when collecting their lunch.

Lloyds Cardnet are now selling WoraPay.

Universal Basket

This is an app that allows you to put any product from any retailer into a single shopping basket and to buy the basket with one payment. Universal Basket stores your details and automatically creates account and fills out the forms on multiple checkout pages behind the scenes.


The app works via screen scraping which means that there are some obvious PCI challenges. UB says it’s managed to meet overcome these and is now in Beta. There are some customer experience ones too – notably that you’ll get asked for your CVV code because UB isn’t allowed to store this. So, you could get multiple 3DS challenges which won’t be a great customer experience. But it’s a neat concept nonetheless and I’ll be keen to see how far Universal Basket gets.


Waiting for wearable payments? DigiSEq may have the answer.

It’s taken a while but consumers, merchants and banks have finally fallen in love with contactless payments. Fast, secure and convenient, contactless speeds up urban life and reduces the need to carry cash. Rapid transit, grocery and hospitality are just three of the sectors in which shoppers seem particularly keen to use their contactless cards.

One of the few drawbacks of contactless cards is the actual card. Wouldn’t it be lovely if we could pay by tapping a watch, fitness band, signet ring or other accoutrement on a payment terminal? So, it’s no surprise that the payment industry has been working on embedding payments into popular brands such as Swatch or Fitbit.

This is harder than it sounds.

The technology and processes that lie behind contactless cards are complex. They have to be. This is a globally interoperable set of standards that needs to be 100% reliable and (almost) 100% secure.

A security key provided by the card issuer needs to be recognised by the security key on the payment terminal. Each card issuers’ security keys are different and, of course, jealously guarded but without them, you can’t make a payment.

At the moment there are just two options for brand owners to get these keys into their products – either become a card issuer themselves or do bilateral deals with a selection card issuer in each target market.

Becoming a card issuer (or partnering with one) normally involves equipping the product with a pre-pay card account at the point of manufacture. Consumers then need to sign-up for this account when they buy the device and fund the pre-pay account with (for example) a direct debit mandate or link to a credit card account. This is how bPay from Barclays works.

The technology is reliable but consumers are obliged to sign-up for a new account. Not only is this a poor experience but it requires the brand owner (or partner) to make credit, KYC and AML checks. This costs money. The final drawback of this approach is that the additional payment hop (brand owner’s pre-pay to cardholders preferred) is likely to cause delays in payment processing and extra costs which need to be borne by the brand owner or the consumer themselves.

If brand owners don’t want to become card issuers themselves, they will need to reach commercial agreements with individual issuers that already have large customer bases. These are necessary to get the security keys required to pre-provision the relevant credentials within each product.

This is a good option for wearable owners as they get to use their favourite cards but creates several headaches for the brand owner. The first is to establish relationships with all the major card issuers in a particular market. This is time consuming and expensive. The second is that since the security keys need embedding at the point of manufacture, the brand owner needs to know very early how many products it needs to equip with each of Barclaycard, MBNA, Capital One or other card issuers credentials. There is plenty of scope to over/under produce and be left with significant stock shortfalls or overhangs.

The paucity of wearable payment products on the market indicates that neither option is particularly attractive, from either a technology or marketing perspective. Indeed, despite some eye catching announcements, the only wearable payment products available (or close to availability) are commercialised by payment companies rather than brand owners. And many of these seem primarily designed as technology showcases rather than as credible attempts to launch mass-market consumer products.

So much for the problem. What about a solution? Well, I’ve been intrigued by a new approach from a UK start-up called DigiSEq – a resident at Techstars’ London Fintech Accelerator at which I’m one of the mentors.

Staffed by ex-MasterCard folk, DigiSEq’s aim is to allow any payment card to be provisioned ‘over the air’ onto any product. DigiSEq would do the hard work of establishing relationships with all the card issuers, negotiating the commercials and persuading them to part with their security keys. Brand owners would no longer need to insert the payment credentials at the point of manufacture. Instead, the consumer’s preferred account details can be written to the device later, at some point in the distribution chain.

The customer experience would be like this. When someone buys a watch, the jeweller asks whether they would like it payment enabled. If the answer is yes, the jeweller taps first shoppers’ payment card and then the watch against the DigiSEq “appliance” and the card’s credential are now embedded in the watch. For an online purchase, the shopper would submit their card details via a secure website and the security key would be provisioned at the distribution centre just before shipping.

I love the concept. The advantages for consumers and brand owners are clear but there’s plenty of detail to be worked through. This won’t be plain sailing for DigiSEq.

The first challenge for Digiseq is to sign-up enough card issuers to excite brand owners. Each issuer then needs to be brought on board with its own commercials terms and security set-up. Issuers are normally banks and never do anything in a hurry so this may take a while.

The second challenge is that of adding contactless technology in the manufacturing process. To succeed, Digiseq will probably need to develop a managed service capability to offer wearable payments as near to a turnkey solution as possible. Brand owners love their brands. They don’t need to know about secure chip design.

Consumers and brand owners are ready for wearable payments but the mechanics of provisioning card credentials are complex. If DigiSEq can crack this conundrum first, a sizeable prize awaits.

mPOS is dead. Long live SmartPOS!

The mPOS hype is over. Micro-merchants proved an elusive market so the industry is taking its technology upmarket in partnership with the burgeoning tablet EPOS sector. That’s my main conclusion from two days in Frankfurt participating in mPOS World 2015. The new approach has already been named SmartPOS.

In 2012, the payment world went wild for mPOS. The success of Square in the US, sparked an investment frenzy in Europe. Analysts forecast an additional 5m merchants would begin taking money on cards for the first time thanks to these cheap and flexible devices. One hardware manufacturer reported receiving 30 enquiries/day as interest peaked.

European mPOS market forecasts
European mPOS market forecasts

Although the reality didn’t meet the hype, the proposition has made steady, if unspectacular, progress.

Miura, alone, claims to have shipped more than 1m mPOS devices worldwide although First Annopolis estimate that just 350K, from all manufacturers, are active in Europe. Only a handful of service providers have more than 5K units in the European field of which it is estimated that 200K are supplied by iZettle with most of the remainder by Payleven and SumUp.

The banks and traditional merchant acquirers have made very little impact although many have launched products. All Spanish banks have an mPOS proposition but have sold a total of 500 units between them. There are 82 mPOS services available in Italy but with collectively negligible market impact. See here for my presentation to the conference which explains some of the background to this disappointing performance.

Yet, mPOS is growing, albeit at a measured pace, supported by several major trends:

  • The steady march of regulation is diminishing the attractiveness of cash. For example, certain French and German towns are now forcing taxi drivers to accept plastic. Italy requires electronic payments to be provided as an option for all transactions over €30.
  • The cost of taking money with cards is falling as reductions in Interchange pass through the system. Longer term, charges will be closer to 1% than 3%.
  • Tablet based electronic point of sale systems (EPOS) are beginning to take significant share and these often include mPOS as standard
  • High street retailers are beginning to use mPOS as part of a technology tool kit that helps to improve customer service by getting more staff talking to customers and taking orders on the shop floor

Responding to these factors, and with a consensus that servicing the very smallest merchants is not economically viable, the industry segmentation model has evolved to focus on larger customers which normally have both staff and premises. Here’s how iZettle (and its competitors) are now viewing the world:

New mPOS segmentation
New mPOS segmentation

From single outlets upwards, many retailers/restaurants are seeking to replace traditional fixed payment terminals and cash registers with tablets linked to mPOS devices – a combination we’re now calling SmartPOS. These merchants require:

  • a rich software platform (with APIs allowing people with no knowledge of payments to integrate payments into their business applications),
  • docking capabilities,
  • easy connections to a range of peripherals
  • personalisations such as bright colours with branded designs to match a particular retailers’ environment

Tablet based EPOS is cheaper and more flexible than a Windows-based till system and is now proven to be reliable in the field. Innovation hasn’t been slow in arriving and ther are now over 100 start-ups commercialising tablet based EPOS for retail and hospitality. Of course the established vendors haven’t stood still and many of them are now offering their software on tablets of various kinds.

The excitement for parts of the payment industry is that integrating an mPOS device to Android/iOS app on a tablet, to create a SmartPOS, is much easier than integrating a traditional payment terminal with Windows based EPOS software. This allows the tablet EPOS vendors to make integrated payments available to large volumes of SMEs who, hitherto, would have bought a till system and payment service separately.

The new SmartPOS bundle looks like this:

From mPOS to SmartPOS - the new SME bundle
From mPOS to SmartPOS – the new SME bundle

The EPOS software is the element of the bundle that delivers the most value and its selection drives the merchant’s choice of which SmartPOS bundle to purchase and when to buy it. Merchants need a till with a payment terminal attached; not the other way around, and this has serious implications for the payment industry:

  • mPOS-focused PSP’s need to partner with the tablet EPOS vendors to ensure their service is embedded as standard in as many SmartPOS bundles as possible
  • The EPOS vendor owns the customer relationship. PSP’s will become trade brands and shouldn’t be investing in direct-to-merchant above the line activity unless they really believe in the nano-merchant opportunity
  • EPOS vendors need to focus on their user experience. To succeed, PSP’s will need to innovate to keep pace with evolving merchant expectations – form factor, periperhals etc – but also ensure that payments does not intrude into the standard processes of retailing. A demonstration by iZettle that showed the screen-flow on an iPad EPOS provided by Inventorum that switched back and forth between the two applications was, in my view, not meeting these standards.
  • Banks/acquirers with large estates of stand-alone payment terminals are vulnerable. As the market shifts to tablets/mPOS devices, merchants will direct their processing to providers offering the best deals via the PSPs, possibly sold as part of the SmartPOS bundle. Banks/acquirers will lose their direct relationships with merchants unless they can offer something beyond a mechant account and a card machine. They need to be in the SmartPOS bundle or to offer their own one. Two good examples: First Data commercialises its own SmartPOS with the Clover proposition; Concardis is inside Order Bird’s SmartPOS bundle with a jointly branded mPOS device linked to a merchant account.
Concardis/Orderbird mPOS device
Concardis/Orderbird mPOS device

To conclude:

A nano-merchant will ask “will your payment service work with my phone?”

A larger merchant will ask “will your payment service work with my tablet EPOS?”

Banks, acquirers and PSP’s need to decide which market they want to be in and which question they want to anwer.

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.

Notes from APEX Europe

The convergence of mobile and digital, of money and data, of people and identity is affecting all parts of the retail and payments industries. Every corner of the market is confronting the same challenges but each brings its own specific rules, culture and heritage.

Consumers might say they would like a single app on their phone that does everything for them. But the reality is that a number of global giants have tried and failed to bring a ubiquitous solution to market – Google Wallet and Paypal Instore are just two examples. To these we can add any number of attempts by the mobile phone industry to incorporate payments into its product set culminating in the successive failures of CurrentC (ISIS) in the US and Weve in the UK.

If the future belongs to niche players that understand their customers and eco-systems, the pre-pay industry should be prospering. These businesses provide niche services that supply digital money for the unbanked, loyalty and gifting schemes on behalf of retailers, international money transfer and payroll programmes.

The pre-pay industry is moving from being a market in itself to becoming just one part of a much larger retail payments ecosystem and will need to integrate technically and emotionally with the mainstream mobile app world.

This was reflected in the opening up of the APEX conference to a much wider set of speakers and delegates. Unfortunately, this led to a fragmented and sometimes incoherent agenda of often unrelated content. Many of the presentations were worthwhile but they were not always in the right order and you have to respect the reckless iconoclasm of the organisers to run a three day conference without a chairman.

Nevertheless, three themes became quickly apparent:

  • The pre-pay industry risks being upstaged by Fintech start-ups that are looking simply to solve problems and don’t feel bounded or restricted by the etiquette and regulations of the payments industry.
  • There was a chasm between the questions the retailers were asking – rooted often in the physical challenges of printing and distributing gift cards – and the digital dreams of seamless mobile shopping journeys expounded by some of the speakers. It’s not that retailers don’t think about such things; it’s more that the content wasn’t matched to the needs of the individuals invited.
  • The SEPA area makes life much easier for everyone. The UK – benefiting from a strong and vibrant payments industry – would be ill-advised to withdraw.

Apple Pay

Apple Pay is quickly taking root in the US. Does this provide a model for the future of payments in Europe? Samee Zafar from Edgar Dunn thought Apple faced three significant obstacles bringing its service to this side of the Atlantic.

  • Apple’s market share is much lower than in the States, typically between 15%-30% in most EU countries compared to over 50% in the US
  • European banks still control the payment “switches” and so have more ability to throw obstacles in Apple Pay’s path
  • Recent regulatory reductions in interchange don’t leave enough margin for Apple to charge card issuers as much as in the US

In Samee’s view, this leaves the way clear for other wallets or similar mobile payment services to prosper. Zapp in the UK could be one. Or even the mobile network operators that may have finally arrived at the killer app…

Mobile networks

Christian Van Hommell Bonten from Wirecard (the conference sponsors) used his keynote slot to explain to a slightly bemused audience the three ways mobile operators can deliver a tap-and-pay service: using an NFC SIM, using the secure element (eSE) or via that latest buzzphrase, host card emulation. WireCard has powered a number of NFC SIM projects, most recently Orange in France which links to a pre-paid card embedded in an Orange Cash app.

This kind of solution requires phones to be equipped with new SIMs which costs the operator money and can take up valuable selling time in a mobile network’s retail outlets. Not a bad thing, said Christian. “The best way to bring a new payment type to a user is in a shop.”

Christian said that NFC SIM or eSE give the best user experience as you just tap and pay, even if your phone is locked. In contrast, HCE based services, which store card details in the cloud, necessitate a strong password on the payment app itself which slows things down. But HCE does present clear advantages to app vendors of all kinds – they should be able to add high value contactless payments to their services with as much ease as linking to Facebook Connect. There is a clear opportunity here for digitising gift cards and joining them up with location based communications of various kinds.

Meanwhile, in Italy, Poste Italia Mobile (an MVNO) is going live with an NFC SIM based service which allows its customers to tap and pay (provided they have a Post Italia payment card of some kind) at shops but also on public transport. Loyalty cards will be next. Already, 850K people have downloaded the Poste Italia app, 500K have got one of the new SIMs and 80K have digitised a payment card.

The video is slightly misleading. You don’t just tap and pay. You tap first. Then the app prompts for a passcode. So, it’s actually a two step process. Anyway, by next year 4m SIMs will have been swapped out and Daniela Maurello, the marketing director who made the presentation, was sure that Poste Italia’s reach alone would drive mass adoption of the service. Interestingly, the mobile network is not looking to make any money from this. The business case is about customer acquisition and this has allowed it to focus on customer experience.

Vodafone are expected to launch a similar service in a number of European markets imminently.

Unrelated to either the mobile operators or the pre-pay world itself, a couple of interesting start-ups presented:

LocalZ – winners of the John Lewis prize last year, LocalZ uses geo-location techniques, including beacons, to improve customer service. Pete Williams gave an example from Peter Jones, a John Lewis shop in Chelsea. If a shopper approaches the store and she has a click-and-collect order waiting, staff get an advanced notification so they can get the parcel ready. This cuts waiting time from 12 to 5 minutes. While still conceptual, this is a great example of technology being used to solve a specific and very measureable problem. The central assumption, that the people nearing the store are intending to come in an pick up their parcel, remains to be tested but sounds plausible.

Reward Technology – Paul Sheedy explained that his venture was aimed at the middle aged females that do most of the world’s grocery shopping. His business puts RFID tags in loyalty cards. This allows stores to recognise customers as they enter and to push messages back to their phones – by SMS primarily. Paul sees the need for a bridge from analogue to digital as real consumer behaviour is moving slower than some would like to admit. 45% of Spanish people don’t have a smartphone, for example.

Several other start-ups got a positive mention:

Quixter – a Swedish idea that registers your payment details along with your handprint, then pay by placing your hand on a reading-frame. It works using vein recognition and is live at one University.

SEQR – another Swedish venture, this is a multi-retailer mobile wallet which works by scanning a QR code produced by the till. It is live with McDonalds in the Sweden.

Orderella – order for drinks at counter-service bars and pick them up when you’re ready, avoiding the queue. It’s now available at 1000 location around the UK but will face the usual issues that the bottleneck in bars is not ordering drinks, it’s making them. That’s why there’s a queue. If you increase demand without increasing supply, the (virtual) queue will just get longer.

Tiply – use your phone to tip hotel and restaurant staff by taking their photo. It’s a great idea from the UK with a good tagline: “Don’t feel like a jerk because you don’t have cash.”