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This Editor's Letter appears in the November 2008 issue of Cards&Payments.
I no longer carry a watch. The cell phone hanging from my belt shows the time, so why add an extra accessory?
Some long-time Cards&Payments readers might recall in my editor's note in May 2005 (the last issue this magazine was called Credit Card Management) I mentioned that my Timex watch had an ExxonMobil Speedpass transponder embedded in it. The watch broke the same week Timex and ExxonMobil discontinued their joint Speedpass payment test. I never replaced it.
ExxonMobil has done relatively little since the Timex test to promote Speedpass, a proprietary technology. However, the leading payment card brands and issuers of their cards have spent millions touting such open-system contactless brands and technologies as MasterCard Worldwide's PayPass, Visa Inc.'s payWave, American Express Co.'s ExpressPay and Discover Financial Solutions' Zip.
In most cases, issuers have embedded contactless chips in their cards or in key fobs to differentiate their products from competitors'. But contactless payment will not fully emerge until cell-phone manufactures start building phones with Near Field Communication contactless chips embedded inside, some experts say. That will not occur until the major players involved determine how to split the revenues fairly, which is proving to be a difficult task and could take years to resolve.
Instead, as this month's Cover Story by Dan Balaban notes, more financial institutions, including Citigroup and Bank of America Corp. in the U.S., are focusing attention first on mobile-banking services that take advantage of cell phones' Internet connections and text-messaging capabilities. Some experts, in fact, believe mobile banking could serve as a bridge to mobile payments by getting consumers used to using their phones to send funds to others or to access online-banking services.
With mobile banking, no special agreements are needed for banks to offer services. That's a big difference from mobile payments, where players in different industries must decide together how to bring the service to market.
Around that time I wrote the editor's note about the Timex/Speedpass watch, MasterCard had conducted tests in which its PayPass chips were incorporated into cell phones. It's interesting that, more than three years later, we're really not that much closer to seeing the two technologies merge on a broad scale.
Jeffrey Green
Editor-in-Chief
Cards&Payments
