A recent article in Wired (Google Apps: Should You Switch?) is relevant to the payments world as more and more computing power is made available at the edge, within POS terminals and even cards themselves. The article compares the centralized approach of Google Apps with the distributed approach of Microsoft Office. There is no clear winner. “There are many reasons to get excited about Google's new plan, but there are just as many reasons to stick with the status quo.”
The centralized versus distributed processing debate of course goes back to much earlier times (as many philosophical debates do) when DEC came out with the first minicomputers that gave processing power to departments and divisions within large corporations, and avoided the need for everything to be done at the central mainframe. The debate will probably go on for a long time to come.
From Welcome’s point of view, and many others in our industry, the debate is irrelevant. We take a simple pragmatic approach. Computing power is available in lots of places, so let’s get the most use out of it. Some payment features work best centralized, others are very valuable at the edge. The question becomes an architectural design issue for each individual feature, rather than a philosophical debate.
Welcome's technology creates little customer behaviour data packets that are in some ways similar to cookies that a web site leaves on your PC to make it easier for you to go back to the web site again later. When a smart card is used, like an EMV card or a contactless card, we drop the customer behaviour data cookie onto the card, the easiest and cheapest place to store it. When a magstripe card is used, we store it on a server that is available for real-time access at the moment of payment. Then, the next time you go back to that merchant, the information in the cookie helps the merchant target promotions better and give you more than you would have gotten otherwise.
We've spent years working on the technology to get a tiny footprint. Right now we can fit hundreds of these cookies into the lowest cost cards on the market, in just a couple kilobytes of card space.