PayPal Australia today announced the next generation of PayPal Here, an app and Bluetooth device allowing Australians to easily accept credit card payments from their smartphone. The secure, chip and PIN credit card reader has been specifically designed for Australia, where Chip and PIN authentication is widely adopted and will soon be mandated across ATMs, cards and payments terminals. An evolution of the first PayPal Here, launched in March 2012, the new device turns a smartphone into a complete payments solution. It also enables businesses to generate and distribute invoices and has the ability to log cash payments. The move by PayPal pre-empts rumours of Square mobile payments launching in Australia. Square makes a free credit card reader, which business owners can attach to iPhones, iPads and Android devices, allowing them to accept credit card payments. It has proven very popular amongst US merchants. Speculation about a local launch was fuelled earlier this year when Communications Minister Malcolm Turnbull visited Square’s offices in San Francisco and tweeted a photo of himself with Mr Dorsey, alongside a caption that said he had discussed “disruptive innovation soon to come to Aus”. Telsyte analyst Foad Fadaghi told StartupSmart the success or failure of any of these devices in the market will come down to fees and charges. Fadaghi noted that the reasons for Square’s success in the US did not necessarily translate to the Australian market, as we had different banking requirements and regulations. While PayPal had a large user-base in Australia, their big competitors are the major banks and financial institutions. “What PayPal does have though is a large user-base and a trusted brand,” Fadaghi says. Fadaghi says the announcement by PayPal is a continuation of where things are headed in the market, and we can expect increasing innovation in the payment solutions space. There are no monthly subscription fees to use PayPal Here, just a one-off charge of AUD$139 for the card reader and then a small fee per transaction using the card reader. Costs are 1.95% for credit card payments (via card reader), 2.4% plus 30 cents for invoicing and 2.9% plus 30 cents for credit cards keyed in to the app (without use of card reader). Registrations for PayPal Here product are open from today. The devices scheduled to ship within the first half of the year.
It’s seven years today since the launch of Apple’s first iPhone and since then it’s brought about new sectors of business, increased connectivity around the globe and forced its competitors to innovate. On this day seven years ago (January 9 in the United States), Steve Jobs introduced the first iPhone in a keynote address at the Macworld Conference and Expo in San Francisco. It wasn’t the first smartphone, it didn’t have the best hardware, but its software and usability quickly made it the dominant phone on the market and Apple challenged the positions of other phone manufacturers and telecommunications companies. With the introduction of the iPhone, opportunities for businesses emerged which had never before been realised. Social media became pervasive, app businesses emerged and new payment technologies were developed. When the iPhone launched on the market in November 2007, thousands of people queued around the world to secure their first iPhone. Many of these people are still devout Apple users today. Telsyte managing director Foad Fadaghi told SmartCompany in the past seven years consumers have adopted smartphone technology at a rapid rate. “This has created both opportunities and challenges for businesses. On the app side of smartphones, it’s provided a new platform for businesses to sell and interact with customers which is more engaged and it’s also facilitated micro-transactions,” he says. “But it’s also created additional requirements for businesses to have mobile websites and to actually develop these apps.” Technology expert Paul Wallbank told SmartCompany the iPhone also challenged the business models of telecommunications companies. “The iPhone broke down the telco model of trying to lock us into their proprietary applications… Apple went behind the backs of the telcos and they’ve never really forgiven it for it,” he says. “The iPhone has been a huge thing for business. Apple created an app store and showed businesses they can help drive sales and productivity. It’s helped businesses both as technology consumers and by allowing them to create their own apps to capture further business opportunities.” Thanks to the rise of the smartphone, driven largely by the success of the iPhone, businesses such as Appster, Smart50 winner Outware Mobile and AppsPro have come to exist. Businesses have also been forced to up their customer engagement via social media, new banking methods have been developed to allow people to transfer money and monitor their accounts on the go, and increasingly businesses are developing payment technologies which allow people to pay for things like their morning coffee while in transit. But Wallbank says the best innovation has been the most simple – making business mobile. “It’s liberated people from the office and automated a lot of field workers systems. At the time the iPhone was released I was running an IT support business and I was struggling to find something which would let my field technicians do their paperwork on the road,” he says. “Smartphones have changed the way many industries can work with their mobile workers. Before the iPhone, the mobile revolution was stunted by the telcos and companies like Blackberry and Nokia, but Apple opened up the platform.” Both Fadaghi and Wallbank agree in the next five years smartphones will become integrated with other smart devices. “What we’ll see is an extension of the smartphone to a number of connected devices and smart accessories. Their functionality will be extended through wearable devices, docking solutions and software which lets it integrate with other devices,” Fadaghi says. “When it reaches maximum penetration innovation will be around its integration with other devices… There is a pent up demand for Google Glass and these kinds of products at certain price points.” Fadaghi says the success of wearable devices will depend on their price. “Longer term, one thing which will occur is the computing part of the technology will get smaller and smaller. You’ll have the full functionality of a smartphone in wearable devices, SD card-sized computers and smart computing units will be applied in different ways like wearables and sensor type devices.” Wallbank says the current International Consumer Electronics Show in Las Vegas has shown there will be more integration between smartphones and in-car navigation and entertainment systems, fitness equipment and medical devices. “Smartphones and tablets are becoming the centre of our digital lives. They’ll be the remote control for everything from home security systems to fitness watches,” he says. “The trend prior to smartphones was phones getting smaller. I think the form factor of the phones will evolve as we use them. It could go back to tiny phones if we use them to engage with things like Google Glass and smart TVs predominantly.” Wallbank says just as the motorcar changed the twentieth century, “the smartphone will change the twenty-first”.
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