The founders of ViVOtech are vocal proponents of the value proposition for contactless payments. They have staked their company’s future on it. But from their participation in a number of high-profile mobile payment trials they found that the typical value proposition had a weak spot. Full service restaurants with table service didn’t like the idea of contactless payments–because they did not want their staff to take possession of a diner’s keys or cell phone to initiate a contactless payment back at the point of sale (POS) device. And you can bet the diner wouldn’t like this either.
So ViVOtech created a new product to enable contactless payments to be accepted at the table without requiring the customer to hand over the card, phone, or key chain. Called ViVOpay Dine, the handheld device captures the information from the contactless card and holds it until it is transferred again to the ViVOpay-equipped POS unit. And, the data held in the unit is encrypted and can only be accessed and read by a ViVOpay unit, thus ensuring that a misplaced or stolen unit cannot compromise card information.
How does a transaction work? At the table, the customer taps the card or phone on the handheld ViVOpay Dine unit. The waiter then takes the ViVOpay Dine unit to the POS device at the counter and presses a button to transfer the card information to the ViVOpay base unit. The base unit is connected to the existing POS which sends the card information to the payment network just as it would with a swiped magnetic stripe card.
A key element to the original ViVOpay system is its ability to enable contactless payments at nearly any existing magnetic stripe-capable POS unit. With limited software reconfiguration, a ViVOpay unit can be attached via serial connection. With no software modification, the unit can be attached directly to the magnetic stripe read head by slipping a mylar strip into the card swipe slot. The merchant’s existing POS unit believes that it is receiving data via a magnetic stripe rather than a contactless token. These units have been deployed as a part of the MasterCard PayPass trials in Orlando and Dallas as well as at a number of other mobile payment trials.
Most proponents of contactless payments focus on the importance of the quick-service restaurant market. Mohammed Khan, President & COO of ViVOtech, is no exception. However, he is quick to add that all for a payment technology to gain widespread acceptance it must be ubiquitous. He stresses, “clearly to make the (contactless payment) solution widely used, we must have it used in a wide variety of environments. The full service restaurant market requires a solution like this one.”
According to Jorge Fernades, ViVOtech co-founder and CEO, there are 600,000 full service restaurants and the number continues to grow. More than 33 million POS units are deployed worldwide. Mr. Fernandes reports that the initial tests in Dallas restaurants such as the popular Rockfish Grill have been extremely positive. Based on this experience, says Mr. Fernandez, “we expect to rollout in large numbers.”
He notes that payment is not the only component of the ViVOpay Dine system. Carrying and validating promotions on contactless tokens or IRenabled phones or devices could provide another merchant and diner benefit. Loyalty, frequency, or ecouponing programs enabled via a single device such as a mobile phone or keyfob could more closely tie the diner to the establishment. Say Mr. Fernandes, “as much as 80% of a restaurant’s gross sales come from repeat business.” He believes that the ViVOpay Dine technology can make this essential link tighter and more rewarding for both parties.
Certainly, ViVOtech and the rest of the contactless pundits have to be happy with the recent wave of mobile payments. Says Mr. Khan, “two of the three major players have already jumped into the field and both like (ISO) 14443 and the ViVOpay concept.” It is true that, at least in North America, the trend is certainly toward support for emulation of the existing magnetic stripe data format on a contactless token. This makes the transition easy from legacy technology to new payment technologies because the vast infrastructure of POS terminals and payment networks need not be replaced.
Plus, adds Mr. Khan, “all our products are RF and IR enabled. We remain convinced that Infrared payments from cell phones will become a big part of the future.” He believes that many of these form factors will coexist—phones, cards, key fobs. Echoes Mr. Fernandes, “at the end of the day, the payment is what the retailers love. It is here sooner than people expect, and it works far better.”