#iphone pay

BUDSOB Stories: How to use apple pay on iPhone

How to use apple pay on iPhone

The Apple Inc. has formally launched its most anticipated mobile payment system, Apple Pay. This inventive NFC-based mobile pay system permits iPhone 6, iPhone 6 Plus and the newly released iPhone 7 clients to make quick purchases using their cell phone. Be that as it may, this administration is at present accessible just in the US market and is not accessible for all iPhone and iPad models.

Full stories: http://www.budsob.com/how-to-use-apple-pay-on-iphone/

By Charlie Youakim, Managing Partner at Passport. 

This is the second part in a series discussing the benefits of one of the most important, but least understood technologies in the parking industry: the Mobile Wallet. You can find Part I here.

In part I our focus was strictly on the benefits of the mobile wallet with respect to merchant processing savings. Those savings are significant as we showed. Merchant wallets can save operators upwards of 27 cents a transaction, which accounts to millions in savings for some parking operators. Those numbers are significant, making merchant savings the primary benefit to the mobile wallet. But, that savings is just one part of their benefit, and the design of the wallet impacts this merchant savings benefit significantly.

In this post we’re going to cover the 2 designs we commonly see in the parking industry. The provider mobile wallet and the operator mobile wallet. Each has different pros and cons which we will touch upon in this article.

Provider’s Mobile Wallet

With a provider mobile wallet, you will be using what we at Passport call an ‘open loop’ wallet. This ‘open loop’ wallet acts much like a credit card, as it can be used with multiple parking operators rather than just one.

With a provider wallet, the funds flow into the provider’s bank account and are held there so they can be used with any number of parking operators. When a parker parks at an operator facility and utilizes the provider wallet, the provider remits funds to the operator equal to the amount used by the parker at their facility.

Because the funds initially flow to the provider and stay with the provider, they end up paying the merchant processing fees on the wallet load. On each usage, they need to determine what to charge the operator (or the parker) in order to get that merchant processing cost back. We will call this a “Wallet Processing Fee”. The way this works is the provider charges something similar to a normal credit card merchant processing fee, with some sort of discount. By charging a wallet processing fee, the provider can make back the credit card merchant fees with additional revenues while the operator still saves with a discounted rate.

The major benefit to the provider wallet is that the ubiquity of the wallet, and thus its increased availability create more utility for the parker. In short, it allows the parker to use the wallet more often. The negative side to this wallet is that the savings are generally not as good for the operator and it is difficult to distribute the benefit evenly across different operators because of different average rates. Because of these aspects, the provider wallet is commonly preferred by smaller operators.

Operator’s Mobile Wallet

An operator wallet, on the other hand, is what we at Passport call a ‘closed loop’ wallet. A ‘closed loop’ wallet acts more like a gift card rather than a credit card. You can’t use that Target card at Walmart, right? The same is true here. When you create your wallet with operator A, you generally can’t use it with operator B (we at Passport allow for this, but it requires the finance departments at operator A and B to work together).

In this closed wallet scenario, the operator bears the burden of all of the wallet load credit card fees, but they also bear all of the benefit of the successive uses of those funds, which are free.

The downside is that the decreased availability and utility of the wallet (ie limited locations) means that less parkers are likely to choose to use the wallet. But, in large installations, where parking is already ubiquitous the utility to the parker remains. You will find that the operator wallet is preferable for large installations.

These explanations cover the basics of the provider and operator wallet - two wallet implementations that create slightly different benefits to the operator and the parker.

By Charlie Youakim, Managing Partner at Passport. 

This is the first part in a series discussing the benefits of one of the most impactful, but least understood technologies in the parking industry: the Mobile Wallet.

The mobile wallet is the definitive untapped technology in the parking industry today. The mobile wallet is powerful, first and foremost, because it directly contributes to a healthier bottom line by creating significant and measurable merchant processing savings for parking operators. These savings can be in the millions for some larger parking operations.

This post was spurred on by the lack of wallet adoption in the parking industry. What’s most surprising about the lack of wallets in parking is that stored value accounts are not new to the industry. They were first introduced in the form of meter smart cards (one could even argue the parking token was a form of a wallet). Stored value accounts on smart cards allowed users to pre-fund their account with a larger payment and draw down upon the account over time. That is essentially a mobile wallet in a physical form.

This pre-fund and draw-down approach is very important to the parking industry because the industry relies on micro payments. These small payments present a large problem to operators and owners in the parking industry because they cost so much money to manage in terms of merchant processing. I’m positive that there are cases in our industry where more than 100% of the revenue collected on some transactions is going to merchant processing. Let me explain why.

Merchant processing companies typically charge a flat fee plus a percentage of revenue collected. Let’s look at the pricing at 2 major merchant processors, Braintree and Stripe. Both prominently advertise a 2.9% + $0.30 fee:

2.9% and $0.30 may work well on a $20 transaction – coming to $0.88, or 4.4% of the transaction, but it has the opposite effect on a small payment in parking. That’s due to the large fixed fee of $0.30. Let’s go to the extreme, and say you park for a quarter. 2.9% and $0.30 on a $0.25 parking transaction. The 2.9% charge only costs you a penny, but the fixed $0.30 fee is imposed on every payment, no matter how small. So you just paid your merchant provider 31 cents to collect 25 cents. That’s a 24% loss caused entirely by merchant processing fees. You would have been better off if the parking customer hadn’t paid at all! On a $0.50 transaction you’ll end up with the same fee of 31 cents, which ends up costing you 62% of your revenue for that transaction. The math goes on. See the chart below for the details, but the gist is that you need to increase your average payment size in order to minimize the disproportionate effect of the fixed processing fee on micro payments.

You may argue, “But we have the best fees in the industry!”

Even if you are right, the problem still exists.

Take a look at the chart above. Do you see any discernable difference in the low cost and high cost merchant processing fees? One is the standard market rate and the other is your “best case” merchant fees scenario. Both scenarios lead to the same conclusion: smaller payments are disproportionately affected by merchant processing fees You will find that merchant processing on small transactions is expensive for both hardware-based transactions (card present) and mobile transactions (card not present). The difference is mobile has the solution that hardware could never provide: The ability to create mobile wallets.

Hardware providers tried their best with smart card solutions and should be lauded for their efforts, but the hardware solutions did not work. The problem with smart cards (and potentially tokens) is the provisioning process. It’s a nightmare. Parkers don’t want to come into an office to pick up a card or tokens, and the operator doesn’t want to deal with the hassle if they actually do come in.

Luckily for all, the antidote for exorbitant merchant processing costs has arrived. Mobile Wallets solve the problem and they’re easy to implement.

Let’s look at an example of a large municipal operator, just to exhibit the benefits of using mobile wallets. Let’s say you have 3000 on-street spaces, and a typical rate structure of $1.00 per hour, with a 2 hour max. You have just implemented mobile payments, even though your hardware takes credit card payments. Nice work!

What do the savings look like for you?

The Setting Spaces: 3000 Rate: $2.00 per hour Max Stay: 2 hours

Some Well Educated Assumptions Average Stay: 1 hour Average Turnover: 1000 transactions per space per year Percentage of Credit/Debit Card Transactions: 60%

The Totals Total Transactions: 3,000,000 per year Average Fee Collected: $2.00 Total Fees Collected: $6,000,000 ($2.00 per transaction)

Merchant Processing Fees Total Credit/Debit Card Transactions: 1,800,000 per year Total Merchant Processing Revenue Collected: $3,600,000 per year Average Merchant Processing Fee:  $0.36 ($2.00 * 2.9% + 30c)

Without a Wallet Total Merchant Processing Fees: $648,000 per year

Now let’s add a mobile wallet, and assume everyone exchanges those credit and debit card transactions for wallet transactions.

New Metrics Average Wallet Load: $20 Merchant Processing Fee per Wallet Load: $0.94 ($20 * 2.9% + 30c) Average Fee Collected: $2 Transactions per Wallet Load: 10

The New Totals Effective Merchant Processing Fee: 9.4 cents ($0.94/10 - ie the total merchant fees on the $20 wallet load divided by the number of transactions it could be used for) Wallet Transactions per Year: 1,800,000  (same as above)

With a Wallet Total Merchant Processing Fees Per Year: $169,200 That’s a savings of $478,800 per year!