Sequent has patented a payment system that allows merchants to simultaneously accept several types of cards with a single tap of a mobile device at the physical point of sale, with the goal of making mobile wallets more user-friendly.
"There's no reason why that should be three or more different transactions in the mobile channel," said Robb Duffield, CEO of Sequent. The company's technology allows mobile wallets to transmit payment cards, loyalty cards, coupons and other offers at the same time.
The patent, which Sequent announced Aug. 26, covers the transmission of multiple digital accounts from a mobile device to a merchant point of sale system using Near Field Communication (NFC) technology.
With the current model of mobile wallets, it can take more time to complete a purchase with a smartphone than with a plastic card. At a Walgreens store, for example, using a loyalty card and payment card requires the user to unlock the phone and the app, display a bar code on the screen for the loyalty program, and then separately tap the phone against a terminal to pay. By comparison, the retailer's Balance Financial Prepaid MasterCard lets the shopper access a loyalty account and payment account in a single swipe.
Sequent, which would not discuss the fees it charges to card-issuing clients, hopes its technology will make mobile payments comparable to Amazon.com's "one click" online checkout process. Closely tying offers to the time of payment is considered a key factor in migrating consumers from plastic to mobile.
"Consumers have made decisions about doing business with issuers and merchants that they trust and interact with for payments, so they should be able to keep those relationships in the mobile channel, and the shopping and transactions should be easier," said Dave Brudnicki, Sequent's chief technology officer.
When consumers are in a store and using an app powered by Sequent, such as the retailer's mobile app or their mobile banking app, they will receive content such as location-based offers, and can use their mobile device's screen to view loyalty cards, coupons and an image of the card typically used at that merchant. "If a user has to leave the [merchant's app] if he or she gets an offer to find payment credentials, how does that compel the consumer to use the mobile device for the transaction?" Brudnicki said.
Sequent is pairing its "single tap" offering with other new mobile payment technology, such as host card emulation, to attract card issuers. Host card emulation uses software to emulate an NFC contactless payment, storing the user's credentials in the cloud instead of on the smartphone.
"Single tap is something that can exist alongside HCE and be complementary," said Duffield.
Sequent's patent could streamline and enrich the checkout experience for consumers and merchants via mobile payments, said Denee Carrington, a senior analyst at Forrester Research, adding there are still challenges. "This capability seems [to be] depending upon NFC at the point of sale, which is another hurdle for widespread adoption," Carrington said.
A feature that allows companies and customers to combine multiple functions with a single tap is a "powerful," said Ben Jackson, a director at Mercator Advisory Group. "This kind of application could give companies an easy-to-create program like those offered by Starbucks and Dunkin Donuts that combine loyalty and payments."
Even with that power, retailers would still need to be convinced of the technology's value before investing the capital and time in point of sale upgrades and employee training, Jackson said.