PayPal is extending its retail presence: The online payment giant partners with credit card brand Discover, one of the larges card issues in the US, to bring PayPal to more than 7 million retail locations in the United States. Under the agreement, Discover enables participating merchants to accept PayPal via their existing relationship with Discover. To offer PayPal, merchants won’t have to upgrade existing point of sale hardware or software. Starting in 2013, the relationship will extend PayPal’s reach to millions of merchants across the US.

“This initiative will result in real change and innovation for the industry by bringing new technologies to the point of sale that benefit merchants and PayPal customers,” commented Diane Offereins, President of Discover Payment Services.

TapBase Introduces TapPay and TapWallet Mobile

Mobile payment startup TapBase has released two mobile payment applications for the iPhone: TapPay and TapWallet. The TapPay app enables merchants to accept credit card payments with their smartphone. Just like Square, there is an optional magnetic-stripe reader that connects to the iPhone via the headphone jack. Instead of swiping their card customers can also pay using the TapWallet app that can store credit card information as well as membership and loyalty cards. Read more…

Xsolla Partners With Openbucks for new Online Games Payment Option

Online games payment service provider Xsolla has partnered with Openbucks to integrate their Gift Card Payment Network to provide a new payment option for online games. The partnership allows users in the United States and Canada to spend money from gift cards of trusted retail brands (such as Subway, Burger King, Circle K, CITGO, and CVS/Pharmacy) for online games in-game items, subscriptions and more.

ETA Launches Mobile Payment Committee

The Electronic Transactions Association (ETA), an international trade association of the payments industry, launched its new Mobile Payments Committee to develop and implement industry-wide mobile payment solutions. All four big US mobile network operators – AT&T, Sprint, T-Mobile, and Verizon – joined the ETA to participate in the Mobile Payment Committee. Other companies participating in the committee include American Express, Discover, MasterCard, Visa, Google, Capital One, PayPal, VeriFone, Intuit and First Data. Read more… 

Google Wallet Upgrade Adds Multiple Cards Support

Google has released an updated version of its mobile wallet service. The Google Wallet app now supports all credit and debit cards from Visa, MasterCard, American Express and Discover for online and in-store purchases. Google has also changed the way the card details are stored: instead of storing the payment data in the phones secure element, the new Google Wallet app stores the data on Google servers in the cloud. Read more…

The Smart Card Alliance Launches EMV Migration Forum to Bring Chip-based Payments to the U.S.

The Smart Card Alliance, a multi-industry association working to advance use and adoption of smart card technology, has created the EMV Migration Forum to support the move from magnetic stripe technology to EMV-based technology in the United States. EMV chip technology helps to reduce fraud from counterfeit, lost and stolen cards. Read more…

BarPay Starts Cash Payment System for Online Purchases in Germany

BarPay introduces a new cash based payment service for e-commerce in Germany. With BarPay consumers can pay in cash at retail POS terminals for goods and services they ordered online. Read more… (German)

PayPal Acquires Visual Credit Card Scanner card.io

PayPal has acquired card.io, a startup that enables developers to capture credit card data using the build-in camera of a smartphone. With card.io, customers don’t have to enter their card information manually; it is retrieved automatically when the customer holds its card in front of the phones camera. The companies already had a close relation before the acquisition, card.io’s technology is powering the new PayPal Here product. Read more…

MasterCard Launches MasterCard Business Network for Small and Mid-Size Business

MasterCard is partnering with Rearden Commerce to launch the MasterCard Business Network site, a platform that helps small and medium sized business to manage and record their expenses. The platform is powered by Rearden Commerce’s Deem network that connects buyers and sellers across various industries. The MasterCard Business Network service is currently in beta status, a mobile app for Android, iPhone or Blackberry devices will be released soon. Read more…

Gift Card Payment Network Openbucks Raises $4.8 Million

Openbucks has closed $4.8 million in a funding round led by Yahoo co-founder, Jerry Yang. The Openbucks gift-card payment network allows consumers who don’t have credit cards or a bank account (or who prefer to keep their banking details private) to buy goods and service online. The company will use the investment to support its growth plans and increase its acceptance network. Read more…

Telefonica Partners with Facebook, Google, Microsoft and RIM for Direct Carrier Billing

Telefonica has signed a deal with Facebook, Google, Microsoft and RIM to make it easier for its customers to buy digital goods and services via their mobile devices. The partnership enables Telefonica customers (O2 in Germany, Movistar in Spain) to charge purchases on Facebook, Google Play, Windows Phone Market or the BlackBerry App World directly to their mobile phone bill. Read more…

SponsorPay Reports 300% Growth in Mobile Business

SponsorPay, a cross-platform for mobile app monetization and user acquisition, has seen 300% growth in its mobile business since January 2012. SponsorPay has also rolled out a tablet-optimized version of their offer wall. Read more…

Dwolla Introduces Places

Peer-to-peer payment platform Dwolla has launched Places, a directory allowing users to find locations that use Dwolla. Read more…

Adyen Adds Access to Eastern Europe via TrustPay

Payment service provider Adyen is partnering with TrustPay, a payment processor in Central and Easetern Europe (CEE), to extend its international reach. The agreement enables Adyen and TrustPay to accept payments in 13 countries in 11 currencies in the CEE region.

American Express to Adopt EMV in the U.S.

American Express (AmEx) has released its roadmap to advance EMV chip-based contact, contactless and mobile payments in the U.S. EMV refers to a microchip that is embedded in the credit card. It was developed by Europay, MasterCard and Visa (EMV) to improve security against fraud and ensure global interoperability. By April next year, processors must be able to support American Express EMV chip-based contact, contactless and mobile transactions. Read more…

Skrill (formally known as Moneybookers), one of Europe’s largest online payment service and digital providers, today announced to take over prepaid voucher provider paysafecard. The total consideration for the acquisition is up to €140 million – this makes it Skrill’s biggest acquisition to date.

Paysafecard was founded in 2000 in Austria and Germany and has established as one of leading provider for prepaid payment solutions in Europe. Paysafecard provides a prepaid electronic payment method for online purchases. The service is available in 31 countries worldwide and available at more than 450,000 outlets across Europe and America.

The combined group will have more than 27 million end-users and almost 130,000 merchant clients. Siegfried Heimgaertner, Skrill CEO, commented: “This acquisition will add significant scale to the Skrill Group in terms of payment volume, customers and merchants and will increase our overall market share. The combined entity will offer a unique proposition in the payments market combining our leading digital wallet with the sophisticated POS and cash network of paysafecard.”

Micro Payment: Zynga and AmEx Introduce Online Virtual Rewards Program

American Express and Zynga join forces and launch an interesting online virtual rewards program: Zynga Serve Rewards. Players of Zynga’s social game FarmVille can earn rewards when using a co-branded American Express prepaid card. The service is based on AmEx’s online payment platform Serve. The digital wallet service was launched in March and integrates various payment methods into one online account. Similar reward programs will be introduced in additional games over the course of the year. Read more…

Micro Payment: Google adds In-app Subscriptions to Android

One year after starting in-app billing on Google Play, the official Android app marketplace, Google now supports in-app subscriptions. As of now, developers can start to sell monthly or annual subscriptions from inside of their apps. Google manages the transactions; developers only have to set the price point and billing interval. Read more…

Alternative Payment: PayPal Continues to Expand into the Retail World

PayPal is trying to become a major player for in-store payments. A new agreement with VeriFone and Equinox Payments, both are large point-of-sale terminal providers, enables more customers to pay with PayPal at retail stores across the U.S. The company is also partnering with 15 U.S. retailers that are going to implement PayPal’s retail payment solution. Read more…

Dwolla is an online payment platform that allows users to send and receive funds directly from other users. The startup was founded in 2008 in Des Moines, the capital of the U.S. state of Iowa, by Ben Milne and Shane Neuerberg with the idea to move funds cheap and directly between users. In June 2011 Dwolla passed the $1 million in transactions per week milestone and is now processing more than $1 million per day. The company raised a $5 million Series B round of financing led by Union Square Ventures in February this year and most recently won Ashton Kutcher as investor.

The name Dwolla is a conjunction of “Dollar” and “web”; a good description of what Dwolla is: an online, cash-based payment method.

How does it work?

Dwolla is not a bank or credit card processor. The company provides a digital wallet and payment network much like PayPal. Transactions are made directly and instantaneous between Dwolla accounts, without using the credit card or ACH (=Automated Clearing House, the electronic network for financial transactions in the U.S.) infrastructure. Dwolla is partnering with U.S. bank Veridian Credit Union to securely deposit the funds of their users.

To use the service, customers have to sign up for a free Dwolla account that can be linked with a U.S. bank account for money deposits and withdrawals (takes 2-4 business days). Once the funds are transferred to their Dwolla account, users can send money to other Dwolla users or their social media contacts (non-Dwolla users have to sign up to claim the money).

Fees

Unlike credit cards and PayPal, which usually charge 3%-5% for each transaction, Dwolla charges a flat fee of just $0.25. Micro-transactions less than $10 are free. By default the recipient is responsible for paying the fee, but there is also the option that the sender takes over the fee (e.g. for charity donations). There are no additional fees, even for merchant accounts.

Merchant Features

Business can sign up for a merchant account to accept payments through the Dwolla network based on their Dwolla ID or email address. Dwolla provides innovative solutions for retail merchants as well as for online shops. Users can locate nearby retail stores that accept Dwolla via Dwolla Spots or Proxi. To verify the incoming transactions Dwolla provides a web-based Dwolla Kiosk App. Check out the embedded video to see how Dwolla Spots work:

For online merchants Dwolla offers plugins for all main e-commerce shopping platforms and an API to their payment gateway.

The downside is that Dwolla is only available within the U.S. The company is focusing on national expansion and has currently no plans to expand internationally.

Credit cards are the most popular payment method across the globe. This is also true for online payments; most online transactions are made using credit cards. Over the last few years a number of alternatives to credit card payments, especially designed for e-commerce (e.g. PayPal) have emerged. But there are also successful local online payment methods.

One of the most successful ones is the iDEAL. It is a real-time online payment method that is based on online banking in the Netherlands. It was launched in 2005 and has now become the most popular (currently has a 50%+ market share, accepted by 80%+ of online merchants) online payment method in the Netherlands.

How does it work?

With iDEAL customers can pay for online purchases directly from their bank account. All major banks in the Netherlands, such as ABN AMRO, Rabobank and ING Bank support iDEAL. The iDEAL service is operated by Currence, a bank association that coordinates the payment systems in the Netherlands. To accept iDEAL payments a merchant can sign up at a certified bank or payment service provider.

Acceptance and use of online payment methods (source: Currence iDEAL factsheet)

This is how iDEAL works:

• The customer selects that he wants to pay with iDEAL and selects his bank during the checkout.
• He is then redirected to his banks login page to authorize the payment using a TAN.
• The bank verifies the transaction and initiates the transfer to the merchant’s bank account.
• The customer is then redirected back to website and the shop will get a conformation of the payment.
• The merchant will receive the payment within 1-2 working days on his bank account.

Advantages

Compared to other payment methods iDEAL offers some advantages for merchants and customers. Millions of customers already use online banking and can use iDEAL without signing up or registering for third-party services. Also customers don’t have to share personal information such as account number with the online merchant. Merchants benefit from the real-time confirmed, guaranteed (by the customers bank) payments that cannot be reversed (no chargebacks).

The transaction fees depend on the size and sales volume of the merchant but are usually much lower (especially for larger transactions) than the fees for accepting credit card payments.

Limited to the Netherlands

iDEAL is based on the Dutch domestic transfer and is only available to customers of the participating banks in the Netherlands. There are planes to adapt iDEAL to the Single Euro Payments Area (SEPA) standard so it can be used also for cross border payments within the E.U. There are similar local direct online banking services in other countries such as Giropay in Germany, EPS in Austria and Secure Vault Payments in the U.S.

The Bitcoin logo

Bitcoin is an electronic currency and payment system based on cryptographic algorithms to enable secure and irreversible direct transactions between parties. It is different from other currencies as it is fully decentralized and does not rely on a central issuer. This means it is not backed by a country or government as conventional currencies are.

Bitcoin was first introduced in 2008 by Satoshi Nakamoto’s Whitepaper: “Bitcoin: A Peer-to-Peer Electronic Cash System”. He also developed the first version of the open source Bitcoin client which was used to start the Bitcoin Network in 2009. Bitcoin is not the first concept of a digital currency based on an asymmetric cryptographic algorithm but it is the first real-world proof of concept of that idea on a large scale.

How does it work?

The Bitcoin network is created by a peer-to-peer (P2P) network of computers running a Bitcoin client. The network is based on a public key infrastructure and uses digital signatures to verify transactions. Using the Bitcoin software, users can generate asymmetric key pairs: a private key that he has to be kept secret and a public key that can be shared. The public part of the key pair is used as the Bitcoin address. Bitcoins (abbrev. BTC) are transferred between these Bitcoin addresses.

A Bitcoin transaction consists of the senders address, the receivers address, and of course the amount of Bitcoins. The sending party signs the transaction with its private key. The transaction is then broadcast to all nodes of the Bitcoin Network. Due to the asymmetric encryption every Bitcoin client can easily verify the transaction but only the user that has access to the private part of the key can create a valid transaction for that Bitcoin address.

This means that only the user that has access to the private key of a Bitcoin address has access to the amount of Bitcoins assigned to that address. The key pairs are stored in the so-called Bitcoin Wallet. A loss of the Bitcoin Wallet (and thus the private keys) results in a loss of the assigned Bitcoins – as would be the case with a real wallet.

The Bitcoin block chain

Bitcoin clients collect and store valid transactions into blocks. A block contains all valid transactions that have not yet been stored and a reference to its predecessor block. Because of the reference to the prior block, the collection of all blocks forms the Bitcoin block chain which is distributed to all clients in the network.

To create a valid block it has to be signed with the solution to a mathematical difficult problem. The problem is a one-way function that is based on the current transactions as well as the previous block. This concept makes the block chain a proof-of-work system that confirms transactions and prevents double spending. An attacker could only change the transaction history if he has more computation power that the rest of the Bitcoin network.

Each block generates a certain amount of Bitcoins as a reward for the client that solves the problem and creates the block. The process of competing to solve the current block is called Bitcoin Mining. The difficulty of the problem is adjusted by the network so that on average a block is generated every 10 minutes.

Wrap-up

Bitcoin information portal weusecoins has created a nice video explaining Bitcoin. Enjoy!