Excuses for why NFC-based mobile payments haven't caught on range from the initial scarcity of NFC-enabled devices to the relative lack of enthusiasm from retailers willing to promote it to plain old consumer ennui.
Austin-based startup SimplyTapp, which has been working for years on technology to bring banks, merchants and device makers together on mobile payments, is trying a new tack: going after a younger, more tech-savvy crowd.
SimplyTapp today is launching Gane, a mobile payments app that bridges several common mobile payments obstacles by enabling person-to-person transfers and in-store payments in real time across all major devices, bundling it all together with consumer offers on multiple social-messaging platforms.
Gane's advantage is that it brings several mobile payments service features together by leveraging the NFC landscape—including the few million merchants who already support Apple Pay—along with Host Card Emulation (HCE), plus merchant-funded offers to provide the consumer incentive mobile payments generally lacks, said Doug Yeager SimplyTapp's CEO and co-founder
Users must first link a payment card to the app, and Gane enables iPhone users to do that through a partnership SimplyTapp forged with an Apple Pay financial services provider it has not yet disclosed. “Our approach is based on card-linking technology, and Apple Pay users signing up with Gane can directly inject their payment credentials into the app through the Apple wallet,” Yeager said.
Gane enables Android handset users to embed payment credentials through HCE, the secure, cloud-based card-emulation approach SimplyTapp pioneered a few years ago that many banks have used for a streamlined approach to adding payment credentials to mobile wallets.
The advantage for merchants to support Gane is the fact that it works equally with Apple and Android handsets with no further integration necessary at the terminal or behind the scenes, beyond supporting NFC, Yeager said.
While Yeager acknowledges that currently only about 20% of U.S. merchants actually support NFC payments—and major big-box retailers like Walmart still eschew NFC—Yeager believes contactless payments acceptance will rise over the next few years as the rocky EMV transition irons out.
“Payments adoption moves very slowly, but as consumers recognize the convenience of NFC and merchants see value proposition in it with apps like ours, we predict a steady increase of usage,” Yeager said.
Gane initially will embed offers from participating merchants in chatbots within Facebook Messenger and Telegram, another social messaging platform, Yeager said, and he expects millennials will be a key audience for the service.
It’s true that the concept borrows from Venmo, in that it combines P2P with the ability to transact at merchants, but Gane has a significant advantage for merchants, Yeager said.
“Venmo users can pay at merchants but only those integrated with PayPal’s Braintree infrastructure, which is a relatively small number of players,” Yeager said.
Gane will generate revenue through a combination of fees, merchant-funded offers and a fraction of interchange on transactions, Yeager said. There is no cost to add funds to Gane via a debit card; the cost to add funds from a credit card or a prepaid card is 3%, he said.
“Interchange is a component of our revenue model, but merchant incentives are more where our business model lies, and a superior way to get retailer participation and consumer usage,” Yeager said.