Dutch payment services company Adyen has developed a service it hopes will allow sales staff at major European retailers to accept card payments via a mobile phone, perhaps allowing them to eliminate dedicated cashiers.
In contrast to European mobile payments startups such as iZettle, Elavon and Payleven, or the US company Square, Adyen isn't targeting small merchants such as plumbers and taxi drivers.
Instead, it plans to offer its mobile phone payments service to large and medium-size retail chains, said Roelant Prins, Adyen's chief commerce officer.
The company has developed a mobile terminal, The Shuttle, that connects to iOS and Android devices using Bluetooth. The terminal can handle payments from chip-and-PIN cards or those with magnetic stripes, and because Adyen is a member of Visa and MasterCard, it can make the service available for all European countries at once, Prins said.
This too is different from the other mobile payments companies in Europe. Payleven for instance recently said it would start offering chip-and-PIN payments in the UK, Germany, Italy, the Netherlands, Poland, while Elavon expanded its chip-and-PIN enabled MobileMerchant service from the UK to Ireland.
Adyen has been offering online payment services to companies including KLM, Vodafone and Dutch department store De Bijenkorf for some time, said Prins. "We see that big retailers are working on solutions to take the traditional counter out of the shop," he said.
De Bijenkorf is testing the mobile technology, said Prins. There are several other interested parties including "a big international hotel chain" that could not yet be revealed, he added.
Adyen offers a Shuttle terminal for €99 (US$129) up front, a fee of €10 per terminal per month and a commission on each transaction. The fee for credit card payments will be 1.4 percent, while a debit card transaction will costs about €0.14, Prins said, adding that the costs can vary.
Payleven, for example charges €0.09 plus 2.95 percent of the transaction value for its magnetic stripe transactions, with no monthly fee, while Elavon charges a £25 (US$40) one-time setup fee and £10 a month for PIN pad rental, plus a 2.95 percent transaction fee for its chip-and-PIN service. IZettle has no monthly fees and charges 2.75 percent of every payment made.
"Our product could be interesting for the so-called 'micro merchants'," that are targeted by the others, Prins said. However, Adyen isn't going to compete in that market but would rather allow other parties to buy a license, he added. "We are actively looking for partnerships," he said.
Adyen will focus on Europe for the moment, Prins said, although it has offices in US, Brazil and Singapore among other places.
Because of the pricing, Adyen has the potential to be disruptive to the likes of Verifone, a big player in the point-of-sales terminal market, said Alex Kwiatkowski, research manager at IDC Financial Insights.
In the retail store market it probably wins over the competition because of its price, "which is a lot lower than going for one of the more traditional point of sale equipment manufacturers," he said.
Adyen's timing is also good, because larger retailers are looking for new ways to sell during the economic crisis, he said.
Apple was one of the pioneers in giving sales staff a means to take card payments. "But just because this works for Apple doesn't mean that it is going to work for every retailer," said Kwiatkowski, adding that he expected it could work well for high end retail stores.
"It is not a revolution that is going to change retailing over night," said Kwiatkowski. "But I think we are going to start to see a transition."
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