Big Jump of Mobile Payments and Branded Payments

Big Jump of Mobile Payments and Branded Payments

SecuX Author : Howard Tien, CMO, SecuX Technology Inc. 安瀚科技股份有限公司

Introduction: Brand and Payment

When a corporate brand or a social media platform reaches a certain size, it begins to ponder how to improve its customer retention, commercial service, and brand value. Many business managers and decision-makers have coincidentally shifted their focus to the development of branded payment, but how to promote it cost-effectively is exceedingly difficult.

At the same time, as smartphones and the Internet are getting more and more powerful, mobile payment technology has gradually been gaining in popularity around the world. Mobile payments nowadays can be roughly divided into two application scenarios. One is to replace physical credit cards with mobile payment apps, such as Apple Pay or Samsung Pay. The other one is to make payments by scanning QR codes on branded apps, like mobile wallets developed by chained department stores, or QR codes of social payment services, such as WeChat Pay, a new type of electronic payment system. The former takes advantage of the payment channels of the commonly-used VISA or Master credit cards, while the latter helps diversify the applications of brands and social media platforms, and greatly improves their customer loyalty and retention, which also reflects a positive, upward trend for brands and social media platforms.

In this article, I will examine the current trend in mobile payment technology and the obstacles in promoting branded payments, and seek to offer the best solution for corporates and social media platforms.

Mobile Payments and Branded Payments

Nowadays, the fastest-growing consumer group is those using mobile payment services at brick-and-mortar stores (which makes up more than eighty percent of the global off-line consumer spending). To maintain the brand image, strengthen customer loyalty, or focus on synergies generated by corporate governance, more and more corporate management and social media platforms tend to adopt the branded payment as an important part of their marketing strategies.

Technically, branded payment usually starts with membership management by branded apps, then issuing bonuses and e-wallets to increase customer retention. This is exactly why the loyalty economy brand points is on the rise. Branded payment can be utilized when customers scan stores’ QR codes and vice versa. The former one is easier to promote and the set-up cost is lower, but it is not easily compatible with the current point-of-sale (POS) system. For that reason, stores often have no options but to choose the latter one which requires higher costs to tinker with the system to accept the newly-developed payment method. In addition to complexities surrounding the use with the cash register, the payment verification terminal has to go through the lengthy verification process in the event of a change of payment method. Besides the aforementioned variable cost incurred from equipment, financial transaction costs incurred should also be taken into account. If a brand plans on promoting branded payment service, tremendous challenges are inevitable.

While a corporate or social media platform is developing branded payment service to enhance customer loyalty and strengthen customer relationship management, the problem is whether it is probable to have a solution which is cost-effective (considering time, equipment, and transaction cost) to promote branded payment service, and is also compatible with the current POS system. With the advancements of technology, the solution is now on the horizon.

The Solution to Branded payment: Birth of A New Type of Mobile Payment Technology

Firstly, to put forward a comprehensive solution, we have to specify what is corporate’s motivation and target audience. The motivation is to develop branded payment to improve brand cohesion (or community cohesion) and customer management. At this stage, a brand should have a preliminary business ecosystem which includes consumer groups and online/offline partner stores, for example, a department store brand which has stable consumer groups and shops, an electronic payment brand which has its own sales channels, or a business alliance or community which has formed into a shopping area. Then, corporates have to identify the best scenarios and tools for branded payment. With the two ideas in mind, the first and foremost factor that corporates have to consider is the costs to promote branded payment and to set up electronic payment equipment. By scrutinizing the problems mentioned above, it is not hard to realize presenting QR codes for customers to scan is the less costly option. In such situations, the payment tool is a mobile app that replaces traditional credit/debit cards. The practice aligns itself with modern and future trends as well as environmentalism.

Next, the design of the hardware terminal that a store uses to receive payments should also be considered. A technological solution always comes with advantages and difficulties, so corporates have to strenghten the advantages and reduce the impact of the difficulties. The advantages have been addressed in the previous paragraphs, and the major difficulty might be how to persuade stores into adding a payment receiving terminal to their traditional POS systems. To alleviate the difficulty, the equipment has to be as inexpensive and portable as possible. In other words, the burden of the terminal equipment should be as light as possible. Taking mobile POS systems on the market, for example, the device has to be connected to the Internet to access the cloud server in order to make and receive payments. Such platforms are usually built into the Android OS as the standard, but the disadvantages are high costs, large size, and complex of operations. Imagine this: If corporates are told that a mobile POS system is costly while the branded payment is being promoted, undoubtedly it will be a great obstacle in promoting branded payment. Moreover, if a sales counter or street vendor is busy receiving customers and using a complicated POS system at the same time, merchant will be less likely to accept branded payment.

The answer is obvious. If most customers pay with the Android or iOS smartphones, why don’t we just make good use of customer’s phones to do the work instead of the mobile POS system? In this way, the payment receiving terminal can simply function as a “payment verification device” which only displays store information and payment amount. It is not necessary to connect to the Internet or install an OS. All it takes is a screen, a keyboard, and the verification mechanism for matching a customer’s phone. The design can not only significantly reduce the cost and size of device but greatly simplify the procedures of operations. With such a complete design concept, we are almost at the end of the difficult challenge.

Branded Payment Solution Blog SecuX

A New Technology of Branded payment Solution

Here I would like to present our comprehensive technological solution to branded payment. First, a mobile app reads to pay after the app and the terminal connects via Bluetooth or NFC for verification (non-pairing connection). Second, the mobile app encrypts payment information in a QR code and sends it to the cloud. The first two steps show that the complex work originally processed by a POS terminal has been given to a mobile app on a customer’s phone. Thanks to the great capability of smartphones and high-bandwidth Internet connection, the task can be done with ease. Third, with a cloud software module developed by SecuX, the equipment security verification and the payment process can be done in seconds and the information can be sent back to the mobile app. Forth, via Bluetooth, the mobile app informs the terminal that payment is completed and confirmed. Finally, accountants can access the transaction database on the cloud and look up all the transactions there.

This is our comprehensive solution to realize branded payment with widely-used mobile payment, leverage the existing strengths (scanning by customers and low set-up cost of equipment) and overcome the difficulties incurred (without taking a great number of resources and money to adapt their equipment). In the end, another useful design feature is also incorporated to integrate with a traditional POS system. That is to say, while the branded payment is being promoted, a store with or without complete POS systems or a street vendor can easily use new equipment to receive branded payment service.

The Rise of Cryptocurrency and Branded payment

In the areas of financial technology and payment technology, the most-discussed topic is that central banks in many countries are pondering whether to develop a national cryptocurrency (for example, DCEP) based on the blockchain technology or a cryptocurrency of a large community brand (for example, Libra). Let’s put the degree of centralization or decentralization aside. The solution we propose for branded payment happens to be the best driver to promote payment services with cryptocurrency. Dr. David Hsu, a big name in the industry, wrote on the origin and development of branded payment clearly and extensively (please refer to Blockchain and Brand Currency). As the blockchain technology matures, the branded currency is the best way to realize branded payment. From branded payment based on branded payment and community payment based on community currency to encrypted payment promoted in the cryptocurrency community and the development of national cryptocurrency, the goals all align themselves with the subject matter I tackle in this article which is aimed at promoting a brand’s new core values, utilizing branded payment to enhance customer loyalty, and effectively managing transaction data of the business and their customers. The time is ripe for the new type of payment technology I propose in this article, and as the best solution, it is high time for all business owners and decision-makers to do it.

Looking Forward to Discussing with Like-minded Partners

The new type of payment method is a big jump of technological concept for mobile payments and branded payments. My team and I have started the trial implementation of this technology in southern Taiwanese cities. Substantial results are expected to be achieved in the third quarter of 2020. In the process of trial implementation, it comes with the realization that the technology extremely good for following businesses or industries: chained department stores which issue reward points and hope to develop branded payment; regional shopping area alliances (night market and high streets) which aim to expand their consumer groups and increase the volume of transactions with branded payment; enclosed business ecosystems whose community cohesion is built through specific theme campaigns (marketing within schools, theme parks, or professional baseball teams) where the management of customers and businesses in the ecosystem is better strengthened and, as a result, better cohesion is built in the ecosystem; social media which intend to expand their commercial services (for example, Facebook’s Libra); online or electronic payment brands which aspire to expand off-line payment scenarios and increase the involvement of customers and businesses. We sincerely look forward to businesses and communities sharing your ideas with SecuX.