Fri 07 Mar 2014 @ 11.41u / 2853 views

Coping with issues in mobile payments

Forget mobile NFC for proximity payments, cards have already won that battle.  But if you want to win the “wallet wars” for the future of remote payments, just put the credit card in your phone.

What’s the point of mobile proximity payments if no one uses them? Is it cool?  Is it cheaper?  Is it easier?  Than cards? We’re – obviously - talking about NFC.

“Using a mobile to pay with Near Field Communications is like flogging a dead horse”, says Dan Armstrong.

Armstrong is Entrepreneur in Residence for technology investor Aspire Ventures LLC and an expert when it comes to (mobile) payment solutions.

“Forget NFC”, he says. “It doesn’t add anything fundamentally positive to the customer’s experience over cards.

Since deploying NFC trials in 2007, I have been desperate for someone to prove to me how it does.  Is it because I am more likely to leave my wallet at home, and not my mobile phone?  Hmm.  Is it because I look cooler fiddling around with my phone and making a mobile payment while those in the queue behind me are sighing?”

“The real power in mobile transaction is now all about being able to pay remotely, no matter the conditions. It’s about putting the reliability of one’s own, trusted credit cards in a secure device like their mobile phone. As easy and reliable as one’s own credit card, with the customer in control of where they use it, and when they put it back in their “wallet”. In the mobile payments sector we’ve got to discover something as new as the launch of mobile itself, SMS, or e-commerce, or apps - fast, reliable, easy-to-use - and truly adding value with a revolutionary step forward.”

Armstrong concludes that proximity payments aren’t what they were promised to be. “There are a lot of problems, default cards, dead battery issues, stolen phones and complexity of a multitude of different PINs, for cards, apps, phones. It’s all just too complicated to be genuinely successful.”

“Paying for something with your mobile phone should be fast, painless and - from the merchant’s point-of-view - forgettable. This is why Apple sends you iTunes payment confirmations long after you paid, to separate the payment moment from the bad credit lender news. No customers want to end their shopping trip with cumbersome or quirky payment choices, dozens of things to fill in, and the queasy feeling that they are throwing their personal info, into the cloud too. Other forms of mobile payment like PayPal or Dwolla ask for usernames and passwords, VISA’s V.me or MasterCard MasterPass, Google and Amazon want to broker your transactions, make it somehow easier.  But, no one is really looking at the fundamental problems in mobile payments and proposing something really revolutionary and acceptable to both merchants and customers.”

“What are people looking for? Merchants want to give customers the tools to pay the way they want to, and lower costs, plus increase revenue. Customers may be interested in paying with their phone, if it doesn’t cost more, and uses the cards and processes they are used to.  But no one wants to have all sorts of different payment tools for all sorts of different situations - debit cards for shops, credit cards webshops, PayPal for low-value payments, iTunes for digital goods, ACH for charging your train card, and other wallets for deliveries, etc., etc. The NFC-pilot in Leiden was an interesting pilot, but never really proved the business case behind the notion that people would choose to pay with their mobile phone in a shop.”

“NFC is a solution, without a problem”, concludes Armstrong.

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