Microsoft And PayPal Partner On Mobile Payments
E-commerce business PayPal said Tuesday that it will partner with Microsoft to bring its PayPal Here hardware card readers to Windows devices, as well as develop EMV-compliant, more secure readers.
The collaboration is aimed at small- and midsize-business retailers looking to modernize their in-store experiences with mobile devices, according to a statement released by Cyril Belikoff, senior director of Microsoft Surface.
The card reader will become available later in the year for several Microsoft devices, including the Surface Pro 3 tablet, Lumia 830 and 635 smartphones, and other Microsoft devices that operate on Windows 8.1.
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For small businesses, the collaboration facilitates streamlined point-of-sale solutions by allowing retailers to accept debit and credit transactions on Microsoft devices, as well as track sales and manage inventory.
"Laptops remain important to small-business retailers to handle inventory, supply, customer relationship information and accounting," said Belikoff in a statement. "At the same time, they have quickly realized that tablets can enable new engagement models with their customers -- personalized interactions and commerce untethered from a cash register. So up until now, they were forced to buy two devices -- an iPad for transacting and a laptop for operations. Today, that changes."
The partnership will bring Microsoft, Redmond, Wash., up to speed with other vendors whose devices already support the three-year-old PayPal Here, such as Google's Android smartphones and select tablets, and Apple's iOS devices. Simultaneously, it will allow PayPal to compete with other digital payment companies such as Square and Intuit GoPayment.
Microsoft partners applauded the increased mobile functionality options that the partnership will bring.
"This propels partners in a forward motion," said Richard Opal, vice president of Oakbrook Terrace, Il.-based Peters & Associates, a Microsoft partner. "PayPal is an incumbent brand in the market known for its digital payment services. I think partners will want to plug into this ecosystem. … It appears to be very compelling."
Douglas Grosfield, president and CEO of Ontario, Canada-based solution provider Xylotek Solutions, called the partnership "a match made in heaven."
"Companies like Microsoft, and of course PayPal, have proven track records in identifying and addressing security concerns in their software and services, and certainly have gained the trust and respect of many millions of customers in the consumer and corporate spaces," he said. "It sounds like … a couple of heavyweights bringing their combined expertise to bear on a trendy and hot topic such as the mobile payment space, and [it's] especially interesting considering many of the other options are Android-based or Apple iOS-based solutions."
The mobile payment systems market has been expanding over the past few years as vendors set their eyes on the idea of the digital wallet, leading to offerings such as Apple's Passbook and Google Wallet.
NEXT: Solution Providers: Security Is Key For Card Readers
EMV, which stands for Europay, MasterCard and Visa, will increase business reliance on data chips that more securely pass along credit information, instead of cards with magnetic strips. It also shifts liability from EMV-compliant vendors in the case of a data breach or fraudulent activity.
EMV-compliant readers are essential, especially because the idea of digital wallets comes hand-in-hand with the need for mobile security, stressed Grosfield.
"I believe strongly that this is an area of intense growth and opportunity, bringing with it convenience as well as risks which must be mitigated," said Grosfield. "Encryption, traceability, remote control in the event a phone is lost, password protection, [and] fraud protection are all important factors that must be considered and addressed in a world where identity theft and e-crime create concerns that simply didn’t exist to the same extent that they did even five years ago."
PayPal already offers EMV-compliant readers in the U.K. and Australia. The U.S. is slated to transition to EMV cards in October.
PUBLISHED JAN. 14, 2015