Fintech innovators have had to straddle the line between old and new, and mobile payments are no different. In the 2016 Mobile Payments Study, Accenture points to outdated hardware as a reason why mobile payments haven't taken off. Providing updated POS hardware is only half the battle, though.
The technology powering many of the U.S. payment networks is older than yours truly. So fintech companies are challenged to come up with solutions that provide new hardware and can communicate with older networks.
“The way to mess up the future of mobile payments is by not respecting and building around the incumbents,” said Derek Webster, CEO of CardFlight. “Our view of the world is that Visa and MasterCard are going to be stronger companies 10 to 20 years from now and global payments providers are going continue to play a role for years from now. We're trying to build on top of them.”
CardFlight has built with incumbents in mind, both in terms of hardware and software. The company specializes in BYOD, or bring your own device, turning an average smart device into a mobile POS.
On the software side, the company offers two solutions, each for a different customer type. There's the Cardflight SDK for developers that can be connected into an app. For the less tech savvy looking for a simple way to process payments on the go, there’s a turnkey solution called SwipeSimple.
On the hardware side, CardFlight’s most popular product is a dongle that plugs into a device's audio jack. Webster embraces the notion of catering to the payments environment. NFC payments like Apple Pay may be the future, but for now, catering to cards is where the volume is.
“Startups need to go to where the market is and will be in a year. The last thing we want to do is have a technology that doesn't have a market. Hundreds of millions of consumers are carrying around credit cards. There are some advantages to innovating in that ecosystem rather than trying to build our own,” he said.
That’s not to say CardFlight doesn’t have its eye on the future. A new NFC reader and Bluetooth connected devices were been released in the past two months. A new deal connecting SwipeSimple to Security Card Services merchants was just signed. And an hour after the Apple iPhone 7 was announced, CardFlight had a press release up about compatible hardware.
As CEO of one of the first approved payment providers for EMV technology, Webster found himself at the center of the EMV launch, earning a trip up to DC.
“We were proud to be certified and approved before the liability shift. On October 1, I was on Capitol Hill because the industry trade association invited me to do a session on EMV. Someone even held up one of our card readers in front of Congress testifying that there are EMV solutions right now,” he stated.
CardFlight has gotten good press for its early EMV approval and up-to-date products, but there’s still a long road ahead. CardFlight doesn’t release revenue numbers, so it’s unclear how it matches up to BYOD bigwigs like Square. Customers also need to get more comfortable with swiping on a merchant's smart phone, which may seem sketchy to the average Joe.
Merchants can’t change how a consumer pays for something. That will just end with a pissed off customer. But companies like CardFlight can give retailers the tools to cater to as many people as possible.