Braintree Expands the Mobile Payments Mix
Mobile payments provider Braintree is offering tools for making mobile payments through an app--without a browser. The development underlines the growth of smartphone payments technologies and the security challenges they bring.
This fast-growing industry will pose challenges for some firms, notably ensuring that their payment systems and customer information are kept secure. For other firms, such as technology and security providers, mobile-device payments will offer new opportunities.
Avoiding a Browser
Braintree is an established firm in the online payments industry, or at least as much as a company in such a new industry can be. As reported by Leena Rao at TechCrunch, it is now debuting what it hopes will prove to be a significant innovation. Its new tool kit will allow merchants to accept payments directly through a mobile app, rather than going through a browser.
Standard online references do not specify Braintree's competitors as such but do note several companies with related businesses, such as Paynet Systems, PaySimple, and Payoneer, which are effectively competitors. More broadly, the whole mobile-device payments industry is in competition with traditional credit cards.
Security obviously comes to the fore when data flow consists of monetary transactions. The payment card industry (PCI), embracing credit and debit cards, has established a detailed set of compliance rules to protect the security of payments.
Braintree argues that its technology is designed to allow merchants to avoid PCI-compliance issues. While other payment apps typically invoke an in-app Web browser, Braintree says that its app directly encrypts sensitive payment card information before passing it to the merchant's system. Thus, the merchant never "sees" this sensitive information, which goes directly to Braintree for processing.
Compliance and Security
It remains to be seen how this technology solution will play out compared to rival offerings by other firms in the mobile-device payments space.
What is hardly in doubt is that the use of smartphones as a substitute for traditional plastic payment cards is likely to grow. For consumers it is one less item to carry around and worry about. If technology similar to Braintree's proves viable, merchants may be relieved of having to concern themselves with protecting account numbers and other sensitive consumer data.
On the other hand, this technology will add to the already considerable risks of losing a smartphone. Thieves may be even more eager to steal them. This in turn will pose further security challenges for firms where IT-related employees use their personal mobile devices on the job. And while many midsized firms will face new challenges, others, such as those in the security space, will find new opportunities.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.