CHICAGO–Evolving mobile technology is leading payment companies to develop new business models to capture revenue in a market many observers believe soon will offer enormous opportunities, executives said here May 20 during a panel discussion at the Federal Reserve Bank of Chicago’s annual conference.
Executives from PayPal Inc., VeriFone Systems Inc. and Visa Inc. each discussed the changing mobile-payments landscape during a discussion about new business models.
One pivotal challenge appears to be how smartphone mobile applications will interact with similar software at the point of sale, Paul Rasori, VeriFone senior vice president of global marketing, told conference attendees.
“The point of sale is the key to enable mobile payments” at retail locations, Rasori said. “Merchants are going to have to depend on the POS vendor to make those applications work.”
Rasori also acknowledged the challenges of managing multiple applications on POS systems. “There will be a complexity in managing all these applications,” he said. “How you manage [those applications] and keep them up to date is a major concern.”
That concern is a prevailing one within VeriFone.
“What we’re attempting to do is put together an ecosystem for all merchants that allows them to harness this new technology in such a manner that it’s easy deploy and manage, but gives them tremendous benefit above and beyond what they have today,” Scott Henry, VeriFone director of product marketing for North America, told PaymentsSource earlier this year (
At the time, Henry cited the difficulty in achieving such a goal because the manufacturers will have to account for different Near Field Communication schemes developing in the marketplace.
Rasori presented to attendees at the Chicago Fed’s conference some potential mobile-payment methods, which include NFC plans from Apple Inc. and Google Inc.
Many experts view NFC as the technology that will drive mobile payments, but the participants on the panel had differing views.
“NFC will be meaningful if there are rich and valuable experiences created,” Laura Chambers, PayPal Mobile senior director, told attendees.
NFC has potential as a mobile-payment enabler, but merchants might have difficulty implementing the technology, and the potential ease of use might not be enough to change consumer behavior, she said.
Dave Wentker, Visa head of mobile development, said Visa does not “want to get overly excited about NFC, but it really is that bridge” to connect the mobile phone to the point of sale.
Mobile-payment security also is a concern, whether it involves NFC, barcode technology or purchases made through applications, the panelists agreed.
“Consumers are not very comfortable with payments on mobile phones,” Chambers said. “This is comparable to what the experience used to be with online payments.”
Consumers also are concerned about the potential for unauthorized transactions should their mobile phone get stolen, Chambers said. Many mobile apps store payment information, she noted.
Moreover, mobile payments introduces a “whole new world of data to protect,” and there are no standards for securing the information, Rasori noted.
“We can’t make the mistake we made 25 years ago [with credit card data] and think no one is going to care about” data stored on a mobile phone, he said.
