Written by Evan Schuman and Fred J. Aun
When Blaze Mobile and others started pushing an RFID sticker as their own contactless payment form factor, it was a media-friendly way of presenting an idea that misses the point of why contactless payment is struggling. Contactless payment has been besieged by challenges, ranging from half-hearted marketing efforts by some of the key financial players, early reports of faulty equipment and serious issues involving contactless security and the perceived lack of any security.
This is on top of issues about an absence of a viable business model
, plus Amex's recent abandonment of one form of contactless payment
But the key issue has consistently been much simpler. Unlike other forms of consumer-issued RFID devices—such as EZPass and even the keyless entry systems of some newer cars—typical contactless payment methods have not given consumers any real reason to use them. In an attempt to minimize security concerns, the cards have very limited range. But that didn't really help. The range is still ample to pose a serious security hole, but it's limited enough that consumers must take the card from their wallet and waive it right in front of a wireless reader. Candidly, the much-touted convenience factor is not there. How much time is saved by waiving a contactless card instead of swiping a magstripe card?
No retailers nor financial institutions, to our knowledge, have bankrolled any kind of discount program to push acceptance. In other words, no campaigns that say "We'll charge you 20 percent less if you use your contactless card rather than a magstripe." With no significant convenience or cost-savings issue, one need not look too far to figure out why contactless is struggling in many sectors.
What Blaze has done is introduced its version of a contactless payment sticker, which can be adhered to a phone, a keychain or even a consumer's forehead. But of all of the issues working against contactless payment, the form-factor is simply not a problem. Does this materially address the convenience or cost-savings issue? If not, why would it be helpful?