Mobile Retail Shines To Apple Pay

Big news hit this morning, as North American Bancard and Apple announced that the latest version of the former’s PayAnywhere Mobile device — to be released next month, available exclusively at Apple retail locations throughout the U.S. and online in the App Store — will be the first ever Apple Pay-ready mobile credit card reader.

It’s a technology that has been a long time coming for the payments and commerce industry, as Marc Gardner, CEO of North American Bancard, well knows. He shared with PYMNTS his company’s excitement in being the first to bring it to market, as well as his perspective on how it is likely to disrupt the space.

How long has the PayAnywhere Mobile credit card reader been in the works? How involved was Apple in the development of the product?

MG:  We’ve been working on it since the first quarter of 2015. Apple’s been a fabulous partner in the development, and we’re very happy for that.

You mentioned that the reader accepts traditional methods of payment as well as contactless NFC payments besides Apple Pay. Will that eventually affect the current exclusivity regarding Apple Store deployments — and if so, how?

MG:  I can’t speak for them, but I can tell you that our desire is to support Apple’s retail distribution initiatives. In addition to that, we are in hundreds of thousands of other retailers’ rooftops and we look to include them in the product offering in the near term.

Apple Pay has been in market long enough that most people — certainly PYMNTS readers — have an understanding of how it works on the consumer side of the transaction. What’s involved for a retailer, now; who’s going to accept Apple Pay using the PayAnywhere Mobile device? How does that side of the transaction compare in terms of use and complexity?

MG:  PayAnywhere Storefront is our brick-and-mortar, cloud-based, tablet point of sale solution; it can accept all NFC card types, no differently than what takes place through any NFC-enabled device. A merchant can simply plug it into their iPad, download PayAnywhere from the App Store, and begin using that iPad for in-store payment acceptance.

Outside the store, the device works on an iPhone. Take a traditional art gallery business, for example: Inside the gallery, the merchant using PayAnywhere uses an iPad for credit card and Apple Pay acceptance. When they’re outside the gallery — say, at an art fair — it’s the same process, only on the phone instead of on the tablet.

Very simply: iPad in the store; iPhone out of the store.

For anything having to do with card-based payments, especially with regards to new technology, the question of security always comes up. Apple Pay of course has its own security elements; how does the PayAnywhere Mobile reader interact with those? Does it add its own security aspects, or is there no change?

MG:  PayAnywhere operates in concert with the security processes of Apple Pay.

We have the highest level of requirements for security. We’re end-to-end encrypted; the device is EMV-ready…we take security very, very seriously.

As of today, PayAnywhere is the only Apple Pay-ready payments product offered in the Apple Store…but it’s likely that competitors will eventually begin pushing out similar products. While PayAnywhere stands alone right now, what do you believe is going to differentiate it as the space becomes more crowded?

MG:  It took us a long time to get to this point. Will there be future competition? Absolutely.

However, I think that the current barriers to entry — the certification of payWave and PayPass for Visa and MasterCard, respectively; the certification of the Apple Pay integration; EMV capability — will keep those potential competitors at bay for at least for the rest of the year. During that time, we’ll either enjoy exclusivity or maybe see the introduction of one competitor.

In either case, competition isn’t something we spend a lot of our time thinking about right now. We spend our time thinking about our next release, our next iteration of software…what features will be on our technology roadmap. We’re continuing to work on the evolution and ecosystem of our product and making it more feature-rich.

Can you share anything about some of the new elements that are being developed for PayAnywhere Mobile?

MG:  I think a big opportunity for cloud-based POS, on an iPhone or an iPad, is to disrupt incumbents — whether it’s Aloha, Radiant, Squirrel, Digital Dining, or the like.

That’s the goal: To have a state-of-the-art, cloud-based POS architecture that allows you to disrupt the $4,000 or $5,000 per-station device — but with more benefits. You want to upgrade software? You push a release, whether it’s via the App Store or an enterprise B2B application store. The entire cloud-based ecosystem is just so much more nimble.

We actually happen to own a Micros dealership. When we want to upgrade merchants’ PCs for the next release, it’s a very laborious, intensive process. Working within cloud-based architecture, by comparison, is almost real-time.

Speaking of flexibility… come September, Apple is going to announce their new wave of products and upgrades — as they do on a regular basis. With respect to Apple Pay, is the PayAnywhere Mobile reader designed to adjust to those changes?

MG:  Our ability to iterate the product through the cloud-based framework, pushing out new software releases via Apple’s App Store, is readily apparent to all developers in the App Store community.

As for our competitive, differentiated advantage… Going back to what I was saying about POS, I think the opportunity is: If you take a look at some of the competitive landscape they’re generating revenue just off the software subscription piece. By contrast, we are able to generate revenue throughout the entire vertical distribution channel.

We bought Electronic Payment Exchange (EPX), which is a processor, in the fourth quarter of 2014. We underwrite and handle compliance and risk analytics throughout the entire ecosystem. The software is developed and engineered entirely through us; the hardware is our industrial design; we contract and manufacture in Shenzhen. From birth to grave, we’re riding our own rails. That allows us to offer an exceptionally competitive price point.

Once a merchant customer already has, say, a $5,000 Micros system in place, they’re likely not willing to supplant it; they’ve made a huge capital investment. But most merchants have taken advantage of free terminal replacement programs that the ISO community has marketed and getting the market to move out of that device and into a cloud-based POS device is a much easier task, because merchants didn’t originally spend $5,000 for it.

In general, we’re exceptionally proud that we’re able to lead with this technology, and be the first solution provider in the United States to distribute an Apple Pay/iPhone/iPad acceptance device.

It seems logical that, as the consumer’s ability to pay using mobile is expanding, merchants should be able to accept payment in the same manner — particularly as it pertains to Apple Pay transactions, away from a fixed checkout counter. What gave PayAnywhere the advantage that allowed it to be the first brand to introduce such a device in the marketplace?

MG:  It’s rooted in the entrepreneurial spirit and innovative DNA of North American Bancard that has existed since I founded the company a couple of decades ago.

We’ve worked really hard as an organization to be the first company in the United States to offer Apple Pay acceptance — as well as acceptance of all other major credit cards — via an iPhone or an iPad. Android Pay will be added in the month of September, as well.

Perhaps a shorter answer to your question is: “hard work.”

Marc Gardner

Founder, CEO and President of North American Bancard

Marc Gardner is founder, president, and CEO of North American Bancard, a multi-faceted payment solutions provider dedicated to delivering the latest payments technology with the highest level of customer service. Headquartered in Troy, Michigan, North American Bancard ranks as one of the industry’s top 30 acquirers; an achievement due in large part to Marc’s commitment and vision. North American Bancard was also named 2014 ISO of the Year at the Electronic Transactions Association (ETA) Star Awards.