The explosion of startups developing payment tools hasn't ceased, and simple consumer mobile wallets are starting to make way for products suitable for large corporations.
Payments companies attending the TechCrunch Disrupt NYC conference this week fell into three categories: security for enterprises, advanced shopping carts for midsize merchants and consumer mobile wallets with extra features.
Data Breaches Bring Security Top of Mind
As more commerce moves online, payment providers and industry groups are discussing how to enhance security on card-not-present transactions.
Tokenization, which can replace card data with a token specific to each transaction, has been a much-discussed security measure. Sedicii, one of the startups who presented at the conference, verifies identity credentials without either party needing to expose its personal information. The company targets business-to-business markets.
"Sedicii is engaging with many global banks, credit card issuers and payment provider companies both in the U.S. and in Europe to support their efforts for a more secure way of authenticating payment and validating identity [for the] anticipated exponential growth of digital and mobile commerce," says Richard Coady, commercial director of global at Sedicii.
Another company, Socure provides identity fraud detection software that uses machine-learning algorithms paired with human social behavior patterns. It system can detect if activity is fraudulent or coming from a bot.
The company markets its technology to financial institutions and online merchants, as well as publishers dealing with click fraud.
"Over the last number of months with the huge data breaches that have occurred, awareness by business and the general public has jumped massively," Coady says.
Target suffered a massive data breach late last year, affecting 40 million card accounts and 70 million other customer records. Hackers also target payment processors and other entities with direct connection to payment data. And just this year, Neiman Marcus Group Ltd. reported a breach of 1.1 million cards and Michaels Stores Inc. separately reported a breach of 2.6 million cards.
"Business has to do more to safeguard their customers and their personal data so that when a breach occurs, their customers are not inconvenienced," Coady says. "A key aspect of this is to make it harder for stolen data to be used. This means making sure that the only person who can use the data is the real owner."
Retailers are also going to have to rethink their approach to protecting card data.
Shopping Carts that Make the Payment Part Fun
Shopping cart abandonment is one of the biggest problems for online and mobile commerce sales. In an effort to eliminate abandonment, legacy payment providers have been trying to make the process of purchasing online seamless.
Visa and MasterCard have created digital wallets called V.me and MasterPass, which can both store consumers' card credentials for use at multiple merchants. Instead of typing a full card account number, shoppers provide their V.me or MasterPass credentials.
Startups are also getting in the game, building systems that merchants and brands can layer on top of their websites.
Cosmic Cart, which launched during the TechCrunch Disrupt NYC event, targets the publishing industry, which usually gets revenue from affiliate links that readers click through to purchase items highlighted in the content.
Cosmic Cart allows publishers to simply tag items that can be purchased. When a consumer wants to buy, a checkout box appears, keeping the shopper on the publisher's site.
Cartonomy, which is in public beta, allows consumers to shop together as a group. Each member sees the items in the cart simultaneously, but members who are purchasing products only for themselves can also keep those things hidden from others' view.
Admins of the group make the final purchase and can see all items in the group cart plus items that members are purchasing only for themselves.
It's "created to streamline any scenario where people shop online in a group; there are currently no other shopping carts that provide collaborative shopping," says Nick Livermore, marketing manager at Cartonomy.
The company says Cartonomy could be beneficial for employees that handle the shopping for their employer. Admins can compare prices between stores and also get notified if an item was added to the cart twice.
Currently Target, Walmart, Sears, Drugstore.com and Best Buy have partnered with Cartonomy, says Livermore.
And BlueSnap, which launched back in 2001, offers customized application programming interfaces (APIs) to merchants all over the world, including "buy now" templates based on each shopper's country. Each template includes the region's preferred language and payment methods, which the vendor says cuts down on abandonment.
Mobile Wallet Apps Still a Force
Consumers haven't taken as quickly to mobile wallets as first assumed, and many say that's because early mobile wallets did little more than replace the card swipe. New mobile apps are piling on features to try and entice consumers to take up mobile payments.
Kwoller is an ecommerce platform that keeps the small screen of a mobile device in mind. It shows users one product at a time, and similar to the dating app Tinder, has users swipe right to add the item to their "love list" or swipe left to discard the item.
"We saw a huge opportunity to realize the full potential of smartphone commerce through a theory of simplification," says Brian Louko, co-founder of Kwoller. "Too often retailers have tried to directly translate their e-commerce experiences to mobile simply by making everything smaller, resulting in a poor experience for the customer."
The app also sends push notifications to consumers when the price of an item on their love list drops.
"We are constantly inundated with deals, offers and sales on items that we dont want. At the same time, we are missing out on all of those deals on items that we actually do want," Louko says.
Currently Kwoller is referring purchases to its retail partners for checkout. The company is also building a universal checkout experience to support the vast number of payment methods in the market today, says Louko.
Fetch is a personal buying assistant app that lets consumers send a text message, photo or voice memo describing an item they'd like to purchase. Fetch's crowd-sourced team of shoppers will identify the item and place the order for the consumer with information in their Fetch profile.
And Fidesmo has created a contactless card that can be loaded with consumer's everyday plastic, such as subway cards, employee badges and loyalty cards.
Focusing first on mobile ticketing, the app allows users to tap an NFC-enabled card on their phone to see how much money is in their public transit account. This would allow travelers who carry subway cards from many cities to consolidate those accounts on one card.