Visa Inks Deal with mPOS Providers - Analyst Blog
07 June 2013 - 7:35AM
Zacks
To expand its payment operations, Visa Inc. (V)
joined hands with three leading mobile point-of-sale (:mPOS)
providers viz. iZettle, SumUp and Swiff. The deal is aimed at
deploying secure mobile acceptance terminals across various
locations to realize the transition of payments from paper to
electronic mode. Furthermore the company approved Anywhere Commerce
and Miura Systems to process Visa payments.
This alliance will allow merchants to accept Visa payments through
mobile technology. As per the deal, to get their mobile hardware
and software verified, iZettle, SumUp and Swiff will participate in
the Visa Ready Program. The Visa Ready Program aims at merging Visa
with the mPOS providers to offer merchants and consumers with a
convenient yet safe payment option.
The deal will allow iZettle, SumUp and Swiff to access Visa’s
best practices, APIs (Application Program Interfaces) and SDKs
(Software Design Kits). These would include tools, direct
connection to Visa, value-added services and Visa Ready symbol.
As per the agreement the mPOS providers can access reference
applications and tools to facilitate the ongoing development of
magnetic stripe, EMV-chip (contact and contactless), and mobile
acceptance solutions. To simplify the processing of the EMV-chip
transactions, they will be connected to Visa in some countries with
the help of Visa POS Solutions platform or payment gateways like
CyberSource and Authorize.Net.
In addition, the companies might also be exposed to Visa’s
value-added services, like instant redemption of special offers at
the point-of sale. Additionally, on approval by Visa, iZettle,
SumUp and Swiff will be permitted to use the Visa Ready symbol to
endorse their devices. Anywhere Commerce and Miura Systems are
already permitted to use the symbol to market their Visa approved
devices.
Mobile acceptance technology is judged best for the electronic
mode of payment to all types of merchants, consumers and financial
institutions. Through the use of mPOS technology, merchants who
were out of the purview of accepting card payments will now be
exposed to the electronic payment market. It will also benefit
consumers through the convenience of mobile checkout.
Micro and small merchants have responded to this mPOS acceptance
solution vastly in recent years, which has helped the transition of
payments to electronic mode. This is evident from the burgeoning
usage of the number of mPOS terminals from 2011 to 2012. mPOS
terminals increased 111% year over year to 9.5 million in 2012 and
is anticipated to reach as high as 38 million by 2017.
Despite growing acceptance of mPOS payment mode, nearly 19 million
or 70% of the total number of merchants in the United States are
yet to accept the electronic payment methods. When transactions at
these merchants are summed up it would translate to a potential
yearly migration of more than $1.1 trillion from paper to
electronic mode. So, this provides a huge scope for Visa to tap the
prospective clients to enhance its business.
In the fiscal second quarter 2013, Visa’s revenues increased 14.7%
year over year to approximately $3 billion. We expect the deal to
help the company attain its goal of strengthening the customer base
and thereby bolster revenues further.
Visa currently carries a Zacks Rank #2 (Buy). Among other stocks
Vantiv Inc. (VNTV) carries a favorable Zacks Rank
#1 (Strong Buy) while Fidelity National Information
Services Inc. (FIS) and Official Payments Holdings
Ltd. (OPAY) share the same Zacks Rank as Visa.
FIDELITY NAT IN (FIS): Free Stock Analysis Report
OFFICIAL PAYMNT (OPAY): Get Free Report
VISA INC-A (V): Free Stock Analysis Report
VANTIV INC-A (VNTV): Free Stock Analysis Report
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