PayPal Unveils New Payment System

PayPal has unveiled a mobile payment product for customers that doesn’t require near-field communication (NFC) technology inside smartphones.

The system relies instead on using smartphones and other mobile devices to scan product bar codes and to authorize payments through PayPal mobile accounts. Shoppers will also be able to use credit-card scanning terminals commonly seen in grocery stores: The user inputs a phone number and PIN on the terminal’s keypad instead of swiping a credit or debit card.

PayPal President Scott Thompson laid out the basics of the plan in a blog posted Wednesday. In the blog, he also took a swipe at competitors, including Google, MasterCard, Visa and others, who are working with NFC in smartphones for a mobile wallet.

“Let’s be clear about something — we’re not just shoving a credit card on a phone,” Thompson said in his blog.

PayPal is already a major global force in online payments, with 100 million customers. While PayPal’s new payment technologies don’t rely on NFC, they do propose making in-store payments possible from any device and support GPS-based offers, according to Thompson’s blog. PayPal will even allow for customers to set up payments on credit after they’ve checked out.

Dozens of merchants got a sneak peak of the technology Wednesday at an event PayPal sponsored. The event was covered by All Things D, which was not allowed to take photographs, but posted a story. In addition to the payment methods shown in the PayPal video, that story said PayPal will allow customers to continue using plastic cards, issued by PayPal, for payment.

In an interview posted on AllThingsD, Thompson said the PayPal approach doesn’t require merchants to install new terminals, nor does it require customers to buy a new smartphone.

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Poor Get Online With Cloud Phone

Start up firm Movirtu has made plans to help 3 million or more people in poor countries use mobile services by giving them personal phone numbers, not phones.

Working with a U.N.-affiliated initiative called Business Call to Action (BCtA), Movirtu will offer the numbers, which it calls mobile identities, through commercial carriers in developing countries in Africa and South Asia. People in those countries who typically borrow phones from others will be able to log into the carrier’s network and use their own prepaid minutes and bits of data. The service is called Cloud Phone, though it operates within a carrier’s own infrastructure rather than on the Internet as a classic cloud service would.

Having a personal mobile identity can save users money in two ways, according to Ramona Liberoff, executive vice president of marketing, strategy and planning at Movirtu. First, they can use mobile services without buying a phone, which is a luxury even at US$15 or $20 for people making $1 or $2 per day. Second, the cost of prepaid service from a carrier typically is less than what consumers in those countries pay someone to borrow a phone, she said.

Though it’s customary in many of these countries to lend a phone to someone in need, the borrower is also expected to pay the lender for the usage. The average savings from using regular prepaid service instead is estimated at about $60 per year, Liberoff said.

The service will help people to use mobile banking, insurance and farming assistance services as well as make phone calls, Liberoff said.

Some of these services currently can only be delivered to individuals and not to someone sharing a phone. Personal mobile identities could be a boon to NGOs (non-governmental organizations) that want to use mobile technology. “In many cases, there are great NGO programs that can’t reach 80 percent of their base,” because those people don’t have their own phones, Liberoff said.

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Citigroup Hackers Pocketed $2.7 million

Citigroup suffered about $2.7 million in losses after cybercriminals uncovered a way to lift credit card numbers from its website and make fraudulent transactions.

Citi acknowledged the breach earlier this month, saying hackers had gained accessed to more than 360,000 Citi credit card accounts of U.S. customers. The hackers didn’t breach Citi’s main credit card processing system, but were reportedly able to obtain the numbers, along with the customers’ names and contact information, by logging into the Citi Account Online website and guessing account numbers.

Until now, it wasn’t revealed if any fraud had occurred as a result of the theft. But Citi confirmed Friday that there were losses of $2.7 million from about 3,400 accounts.

The bank has said its customers will not be liable for the fraudalent transactions and losses as a result of them.

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NFC Support Coming to Windows Phone 7

Microsoft is adding support for NFC (near field communication) to its Windows Phone mobile operating system, according to a report on Bloomberg Businessweek. NFC technology is a key component to the upcoming mobile payment and mobile wallet systems now reportedly under development at Google, RIM and Apple as well as the new carrier-led initiative Isis, a coalition of three of the four major cellular providers here in the U.S.

Support for NFC technology in Windows Phone 7 will be pushed out in an update to Microsoft’s mobile operating system, sources told Bloomberg reporters. Those updates may arrive sometime this year.

Bloomberg says that the addition of NFC is an effort to close the gap between Microsoft and Google, the latter which is currently the leading smartphone platform here in the U.S., and, according to at least one analyst firm, worldwide.

Google’s Android mobile operating system added in NFC support in the release code-named Gingerbread (Android 2.3) and has incrementally added new capabilities since then to broaden its feature set. In February 2011, for example, an update delivered the ability to both read and write to standard NFC tags, whereas before the NFC support was read-only.

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Amex Debuts Mobile Payment System

American Express has just debuted a digital payment and commerce service that makes it possible to use Android-based devices and Apple iPhones for person-to-person online payments. Visa announced a similar personal payment product in the U.S. on March 16.

Analysts say the moves by Visa and American Express are clearly aimed at challenging PayPal in the personal payments business.

The new Amex service, named Serve, allows consumers and small businesses to make purchases and person-to-person payments on iOS- and Android-based devices. Serve accounts are also accessible on personal computers through Facebook and at Serve.com.

Serve also allows users to create and manage sub-accounts for friends and family members.

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Google Jumps Into Mobile Payments

Google is joining Citigroup and Mastercard to establish a mobile payment system that will turn Android phones into a kind of electronic wallet, the Wall Street Journal said, citing people familiar with the matter.

The new system, which is in its early stages, will allow consumers to wave their Android phones in front of a small reader at the checkout counter to make payments, the Journal reported. 

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Visa Offers New Payment Service

Visa announced Wednesday it is developing a new service that will allow U.S. customers to send money directly to one another, presenting new competition to PayPal.

Visa already lets people send money to Visa accounts in many other countries, but this will be the first time it will offer the service in the U.S.

People who use banks that participate in the new program will be able to send money directly to someone’s Visa account by entering the recipient’s Visa account number, e-mail address or mobile-phone number in an online payment form.

Visa said it has made deals with two payment companies, Fiserv and CashEdge, so that those companies can allow their customers to send money to Visa accounts. Banks offer Fiserv’s ZashPay and CashEdge’s Popmoney services to their customers for sending money to other people. The first banks are expected to make the Visa service available through CashEdge and Fiserv in the second half of the year, Visa said. It’s not clear whether Visa will offer the service on its own.  Read More…

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