PayPal is rumoured to be preparing to take on Square and a host of copycat competitors with the launch of a service that would allow mobile phones to accept card payments.
Hey, let's just ditch the whole idea of secure payments at the Point of Sale ... and why not? Let's say goodbye to EMV, chip processing and reducing levels of fraud; let's all go back to the magstripe technology of the developing world (USA). We've already
gone some of te way with magstripe giftcards. Why not just hide the backwards step in all the hype? It's not about transaction security and fraud, because the cardholders and the merchants pay for that; it's about transaction volumes and bringing cheap and
nasty, but high volume, payment solutions to the small retailer, because clicks mean cash.
Roll on last century, packaged as the future.
It seems like a fairly tactical step by PayPal to put card acceptance up front, when they are on the brink of relegating cards to something you capture details from and then put in a drawer. PayPal had to do this to counter Square's (and Intuit's) move into
their core sole trader/SME segment before Square's proposition moved more into the on-line space.
With all these players now having fun with mag stripe, I wonder how this will affect Visa and MasterCard's drive to implement EMV in the United States. Could mag stripe last until cards can be comfortably be replaced by mobile-based payments and acceptance
technology altogether, and EMV will be overstepped?
You conservative Dave. Cards are unnecessary. What was wrong with cheques? You don't need a dongle to accept a cheque.
I think you guys are both right. Fraud remains an issue and I would be curious to understand the chargeback/return process with The Home Depot stores. I think it would be worth a watch as they roll this thing out beyond the Silcon Valley test bed they've
been playing in.
Not to mention that by the time everyone figures out how to cooperatively make a buck off the mobile ecosystem in such a way that consumers cannot live without, the saying will be:
Card, what card? I don need no stinkin card! What was I thinking? :-)
The whole chip/EMV migration in the US may continue as a compatibility accommodation for non-US issued EMV/chip cards. However, I suspect we'll be seeing the rise of mobile initiated transactions increase much faster. Could even fund the EMV/chip for what
was that.... those card thingeys?
I'm just sayin......
Mobile Mondex, that's what we need, and we can transfer our money into our Mondex account using a cheque.
Bish Bosh, job done.
The card payment will survive the mobile bonanza. This due to that card payment is the efficient way to pay/get paid in the open market where people bank with different institutions. The card payment will find its way into the mobile form factor but it will
take some time and require effort. Today we cannot see any successful solutions being launched. Obviously security issues need to be managed as well as functionality and user convenience issues. Mobile card need to beat the "insert card in terminal and key
in 4 digit PIN" convenience and security at point of sale. Or offer substantial universal additional value... The second alternative to card for mobile payment is credit transfer and the ACH infrastructure cannot meet the standardisation, business model, on-line
delivery and global distribution already in place for cards. It will be too expensive to build. The third alternative is that all consumers and merchants in the world become customers in the same bank/institution and can do intra bank transfers between themselves
(paypal model). It is not likely to happen.
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© Finextra Research 2014