What the Latest Payment Evolution
Means for Your Merchant Business

Throughout history, the way currency is exchanged to pay for goods and services has evolved as emerging technologies make possible new and more efficient payment methods.

The latest payment evolution follows closely on the heels of the exploding use of smartphones and other mobile devices by consumers. New technologies now allow consumers to make payments using their mobile device. These payments are referred to by several different names — most commonly, mPayments, mobile wallet and digital wallet.

mPayments could potentially eliminate the need for customers to carry multiple credit and debit cards in their wallets and purses. Instead, the payment information from their cards is stored electronically on a mobile device or in the cloud.

According to a new report from Juniper Research, the value of global payments made using mobile devices will reach $507 billion this year, a 40 percent increase on a year-on-year basis.[1] While only about one out of every 10 mobile handsets currently has mobile payment functionality, this is projected to increase to one out of every five mobile handsets by 2018.[2]

The Differences Between Mobile and Digital Wallets

While the terms are often used interchangeably, mobile wallets and digital wallets are not the same thing. With a mobile wallet, payment information is stored on the smartphone or mobile device itself. With a digital wallet, payment information is stored in the cloud, so digital wallets are not device specific.

Amazon®’s checkout process, in which a variety of different credit and/or debit cards are presented as payment options, is a good example of digital wallet. The PayPalTM digital wallet, MasterPassTM by MasterCard® and Visa CheckoutTM from Visa® are other digital wallets.

Meanwhile, there are dozens of different options when it comes to mobile wallets. Two of the most commonly
used mobile wallets are Apple PayTM and Google Wallet.TM Both of these mobile wallets incorporate near-field
communications (NFC) technology that permits contactless payments: Customers simply wave their smartphones near a contactless reader at the point-of-sale (POS) and their payment information is transmitted wirelessly to the POS terminal.

With Google Wallet, customers need to open and unlock the app with a passcode to complete the transaction at the POS. With Apple Pay, customers only have to hold their iPhone with their finger on the Touch ID. A subtle vibration and beep alerts them that the payment transaction was successful. Another difference is that Apple Pay does not give Apple access to customers’ purchase information, while Google does have access to customers’ purchases made using Google Wallet. Apple Pay is only enabled on the new iPhone® 6, while Google Wallet is enabled on many AndroidTM phones (Gingerbread v2.3+) and iPhones® (iOS v6.0).

Both Google Wallet and Apple Pay utilize a data security technology referred to as “tokenization.” Instead of using customers’ credit card information to complete the transaction, tokenization creates a unique “token” made up of upper- and lower-case letters, numbers and special characters. These tokens are undecipherable, and they only point to the associated payment data — they don’t decrypt it. So even if hackers steal customers’ payment data, it’s of no use to them.

Benefits of Accepting mPayments

As a merchant, you can realize many benefits by upgrading your POS equipment to new equipment that’s capable of accepting mPayments from your customers:

Operational efficiency and improved customer service — The mobile payment checkout process, whereby customers simply wave their smartphone near a contactless reader, is generally simpler and faster than the traditional card swipe checkout process. This can speed up checkouts at the POS and enable you to serve your customers better.

Easy integration — A new contactless NFC terminal can be easily integrated into your existing POS system, and your set-up and ongoing operating costs will be minimal.

More secure and reliable transactions — Tokenization offers a higher degree of data security than traditional card swiping. Also, the card or device never leaves the customer’s hand.

Industry compliance — In the next few months, you will likely be upgrading your POS system so that it’s capable of accepting Chip Cards — or EMV-enabled cards — which are replacing magnetic stripe credit and debit cards. Many contactless readers fully support the migration to EMV chip technology, enabling you to process Chip Card transactions.

Time to Upgrade

Please call PNC Merchant Services customer service at 800-742-5030 if you have any questions about mobile payments and how to upgrade your POS system so you can accept them.

Important Legal Disclosures and Information



Amazon is a registered trademark in the United States and/or other countries.

PayPal is a registered trademark of PayPal, Inc. in the United States and/or other countries.

MasterPass is a registered trademark of MasterCard International, Inc.

Visa Checkout is a trademark of Visa International Service Association and used under license.

Google Wallet and Android are registered trademarks of Google Inc.

Apple, the Apple logo, and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries.
Apple Pay is a trademark of Apple Inc.

Merchant Services provided by PNC Merchant Services Company and are subject to credit approval.
PNC Merchant Services is a registered trademark of The PNC Financial Services Group, Inc.