PayPal has taken another step in its journey to the high street, beginning a pilot of its new point-of-sale technology with US retail giant Home Depot.
I prefer to pay using chip and PIN.
As the first comment against this article shows, security is a real concern for end-users, and I’d say PayPal needs to be very mindful not to let any perceived weaknesses in this area have a detrimental effect on either the trial or future uptake of the
system. The US may not use Chip and PIN, but users in the Europe who are used to the system may not feel entirely confident in the security measures briefly mentioned above.
What we’re seeing is a move towards a multi-layered approach to security, which in this case – at POS – could involve using a technology called Proximity Correlation Logic. This works by checking the proximity of the POS, where someone is making the transaction,
to the card holder’s mobile phone. It’s not about tracking users to see where they are; rather it’s just about detecting that if the POS and the phone are NOT in the same jurisdiction, there is a much increased chance that the transaction is fraudulent. This
can be done in complete compliance with European Data Protection Law, so privacy should not be a concern.
As I said, we in the developed world are now used to making secure payments at POS, whether or not we understand why that is the case. Why would we want to take the backward step that would inevitably result from adopting US payment technologies?
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© Finextra Research 2014