Another year has gone by and it’s still too early to say when the Year of Mobile payments will happen. That’s the upshot of a panel discussion from the GigaOM Mobilize Conference. But the important takeaway is that mobile payments can’t rely on payments alone to sell itself; it will take a lot of new valuable services to convince consumers and merchants.
Ken Miller, VP of Strategic Risk Services at Intuit said the merchants and consumers aren’t faced with a terrible lot of options right now in cash and credit card payments. NFC and many payment solutions being developed today are like pitching tires to horse and buggy consumers, he said. The key is not just replacing existing payment systems but going beyond that.
“The entrenched leader is cash or plastic, which only takes about two seconds to use. You have to come up with something as good or better plus a whole host of perks to get mass consumer and merchant adoption,” Miller said.
The growing feeling is that consumers and merchants need to be sold on the benefits of next generation mobile payments and just providing a contactless solution or an alternative isn’t enough.
PayPal’s Laura Chambers, senior director of mobile, said the company has talked to merchants and consumers and narrowed in on what they really want. And she said it’s about providing more flexibility and choice to consumers and providing a solid solution for merchants that works with existing hardware. She said the key is building a comprehensive solution that provides services before and after a transaction, something PayPal is trying to address with technology from its acquisitions of RedLaser, Milo and WHERE.
“If the idea is just about payments, it’s not going to be a very successful solution. It’s more about the end-to-end solution,” she said.
That means things like providing more shopping solutions such as inventory searches and targeted offers and discounts before a transaction. And it can mean digital receipts and more flexible payment options after a transaction. PayPal is pursuing its own in-store payment system that is avoiding NFC technology for now.
Brad Greene, Senior Business Leader at Visa said merchants need more incentives to adopt solutions like NFC. The company recently announced that it will waive the annual PCI compliance audit for merchants who upgrade to NFC. And as more of a stick, those merchants who don’t upgrade by 2015, will find that fraud liability for transactions will shift from the banks to merchants who don’t upgrade.
He said consumers will also need to be convinced through extra services that go beyond existing card payments. “If you can nail the thing that generally is already in place in cards today and layer on features and functions that both merchants and consumers value… I‘m pretty sure consumers will adopt it,” Greene said.
Indeed, that’s what the value proposition is with Google Wallet and Isis, the carrier-led NFC joint venture from AT&T, Verizon and T-Mobile, said Dave Talach, vice president of Global Product Management for VeriFone. He said the U.S. has trailed other parts of the world in contactless payments. But what’s interesting in these two U.S.-led payment initiatives is the combination of mobile payments plus mobile commerce.
“Everyone is looking at Google and Isis to go beyond payments to mobile payments plus value add. If it’s just contactless payments, that’s nothing to write home about,” he said.