Business Mobile Tech Strategy

Mobile payments – the battle for your whole wallet, not just your money

The first time I saw an NFC payment service was for a trial in a food court about ten years ago. I don’t recall who the solution was being provided by. They had signed up a number of the vendors in the food court in my office building to use the payment service which required the consumer to carry a key fob. It was not tied to a credit card but rather was a separate account to which money could be painfully transferred several days in advance. All so we could tap and go on transactions that were less than $10. Between credit cards, PDA’s, cell phones, cash, ID, keys for my car, keys for my house, my security card for parking, security card for the office my pockets were jammed full.

I looked at the person trying to sign me up and asked them why would I possibly want a thing like this? I could see the advantage for the merchant if it shortened the time spent at cash and kept people moving through the food court. But what was in it for me? Something else on my key chain? Well because you can just tap and go I was told. It works instantly? Well no it still goes through a dial-up terminal like a credit card to be authorized and approved. So out of my typical 45 seconds of waiting, I was shaving about 3 seconds from my time. Not a big reward for my key chain real estate.

Fast forward to 2013 and NFC smart cards have all been in Canadian wallets for a few years now. We regularly tap and go or insert the smart chip but now with an actual credit card rather than an intermediate step to connect funds to the payment method. Many of the terminals now are hooked up to high speed Internet access which results in authorizations taking mere seconds. My wallet still bulges though with multiple credit cards, driver’s license, health card, gift cards, memberships cards and many other things.

While I worked at Rogers I participated in an employee trial using NFC technology integrated into a mobile phone for mobile payment. This was a few years before they became so common place in most smartphones other than iOS. We could use them tied to a credit card initially only at the company cafeteria but then by select merchants near our office. It was amazingly simple, fast and I didn’t have to take out my wallet for anything. The same experience as using a smart credit card but I didn’t need the card any more. Just my phone which I have with me 24/7. A recent update at AndroidTO by David Robinson, VP Emerging Business at Rogers finally clicked the lights on.

The phone is the last ID you and I will ever need. All mobile devices are connected in a multitude of ways: NFC, Bluetooth Low Energy (4.0), WiFi and high speed mobile data (HSPA, LTE). An NFC enabled phone can take the place of every smart card in my wallet of which there are more coming in Canada as government and transit authorities also adopt the technology. The US has not followed the NFC path on credit card so things will take a different course south of the border where perhaps Beacon technologies based on BLE or WiFi check-ins will come of age sooner and skip NFC all together. In Canada, Europe and many other countries NFC is already in use. The infrastructure is there and very secure. There is no need to invent new methods of security, convince merchants to do it differently. It just works. Now.

Mobile payments are the wedge use case to change our wallets forever. It can be so much more than a credit card. It can communicate friend-to-friend to transfer cash, it can be placed on a reader at the subway station to let me on. There is nothing in my wallet now that can’t make its way to my smart phone. So what’s in it for me?

I don’t need to carry a wallet any more as well as a phone. I don’t even need to carry keys, security passes. The combination of technologies will support even automatic checkins on an opt-in basis which mean I never even have to take my phone out. As some of the conceptual videos from PayPal’s Beacon have already shown, I will also be instantly known to the establishment I enter and all of my preferences available to improve the service given to me.

My pockets are now lighter and my service experience so much more personalized. Sign, me, up!!!