advertisement
advertisement
advertisement

This is page 2 of:

RIP Payment Card Industry

August 23rd, 2012

But that is about to change. This crazy month started with news that retail giant Starbucks had signed with Square for its payment-card processing. Although I personally think that deal is more about processing costs, it started a tidal wave of news. Next, we had an update about the merchant lead payment network and mobile payment approach being built under the MCX banner. Today, we found out that PayPal and Discover have teamed up to allow PayPal payments over the Discover network.

I think the biggest news will come in late September, when I hope that Apple will announce support for NFC in the next version of the iPhone. If Apple does one thing well, it is to simplify processes within an elegant design and bring them to the mass market.

Although Apple might change the mobile wallet landscape, it could also change the payment processing landscape with iTunes. What happens if Apple customers are able to purchase a physical item and have it billed to their iTunes account? Now, the story really gets interesting. Let’s not forget that Apple does payment aggregation, too (processing many small transactions as one large transaction), as way to save on its processing costs. Again, I expect the plot will thicken in September.

Although I’m not sure who the winner in this mobile payments battle will be, I am now confident that the there is no turning back. The industry will change, and I’m optimistic it will change for the better.

Wishing out loud, I really hope that, with this new mobile wallet world, PCI compliance standards are thrown out the window. I’m hoping that new standards are developed to protect the consumer banking information, and that these standards aren’t built intentionally vague and representing only the political interests of some of the parties involved in the process. I’m secretly hoping the MCX takes a leadership position in creating new mobile payment security standards as part of its initiative. That way, even if MCX’s mobile payment solution isn’t a winner, standards will be built to protect the merchants (and consumers) that are part of this new mobile payment ecosystem. Although building security standards isn’t a fun or glamorous role, we need to start over and build standards that match the realities of this industry.

I remember the first time I was given a presentation about mobile payments. My mind raced with the possibilities that it would afford to a retailer and the power that it could unleash. I dreamed about the possibilities of finally overthrowing an arcane system run by greedy organizations that had so little respect for their own merchants.

As months and years went by, I realized there were just too many hurdles, too many hands in the cookie jar, too much politics for it to happen. I became jaded; frustrated, like most retailers, about the cost and the complexity built into such a seemingly simple transaction and left with no other options.

But today is a new day. Let’s face it: Paying for goods and services with a piece of plastic is the modern-day equivalent of watching a movie on a VCR. We just landed a robot on Mars, I think we can make this happen.

What do you think? If you disagree (or even, heaven forbid, agree), please comment below or send me a private message. Or check out the Twitter discussion on @todd_michaud.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.