Merchant Warehouse is trying make the differences between competing mobile payments technology – such as Near Field Communication chips and QR codes – invisible to merchants.

"We're trying to address the merchant problems at the point of sale, so they don't have to care about the method of acceptance," says Marc Castrechini, director of software development for Merchant Warehouse.

Merchant Warehouse plans to increase its roster of developer partners, which would give the company's Genius platform more reach into different mobile payment offerings. Genius works similar to middleware—it integrates with a merchant's point of sale system and leverages the cloud to update the merchant's point of sale capabilities to accommodate new security, EMV migration, coupons and special offers, mobile payments, and other technology.

"We don't know who the [technology] winner will be for mobile payments, so we'll take some of the risk of that for merchants by building capabilities for both [NFC and QR codes]," he says.

Both technologies will expand quickly over the next couple of years, according to research Merchant Warehouse commissioned from NowSourcing. NFC will gain traction, but not enough to become the technology of choice for mobile payments, the study concludes.

At the end of 2012, there were 185 million mobile phones with integrated NFC capability and 1.72 billion global mobile phones, says Merchant Warehouse.  In 2013, that should be about 290 million NFC-enabled phones out of a total of 1.85 billion global mobile phones—with the growth in pace to reach 545 million NFC phones by 2015, out of a total of 2.1 billion mobile phones. NFC-enabled phones, which made up about 11% of the global mobile phone market at the end of 2012, will increase to 16% in 2013 and 26% by 2015, says Merchant Warehouse, which published its study last month.

At the same time, QR code adoption (for any purpose) is increasing, from 26.3 million U.S. adult users in 2012 to 32.4 million in 2013 and a projected 38.5 million in 2014, Castrechini says.

"The outcome of the battle between different mobile payments technologies is far from certain," says Zil Bareisis, a senior analyst at Celent. "Any merchant investing into terminal and point of sale upgrades should look for flexibility and seek out solutions that can support different technologies through configuration or minimal additional investment."

Even if a certain technology becomes dominant, mobile wallets will still add new features quickly, placing stress on merchants to adjust their point of sale to keep up, Castrechini says.

"Once the mobile wallets take off, the biggest challenge will be navigating the highly competitive and evolving space," Castrechini says.

Merchant Warehouse has partnered with Isis, an NFC-based mobile payments initiative led by telecoms, and SVGNGR's LevelUp, which uses QR codes for point of sale payments. Merchant Warehouse is also in discussions with other wallet companies, Castrechini says.

Merchant Warehouse addresses the merchant side of mobile acceptance well, says James Wester, a research director at IDC Financial Insights.

"It solves part of the problem on the merchant side by giving them some options," Wester says.

MasterCard is also working on technology that would provide a choice between QR code and NFC to execute a mobile payment at the point of sale. Such technology for navigating the different mobile-wallet models is still largely missing from the market, Wester says. 

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