Last updated: 17 April 2014
What is considered ‘normal’? Is it something that has been around for a long time; like saying hello, please or thank you, or like exchanging gifts in the holidays? Is it something that is trusted and widely accepted?
When it comes to payments, we believe it’s the latter. Something doesn’t have to be ‘old’ to be normal – it just needs to be secure and convenient for mainstream acceptance.
If you consider the history of payments – we have moved from bartering to paying in gold coins to cash, then checks and progressing to EMV and the chip-based credit cards that we use – we believe that contactless and mobile payments are next on the agenda.
ABI Research last year predicted that contactless point of sales (POS) would count for approximately 80% of all POS in circulation by 2018. Just recently, Juniper Research claimed 10 billion mobile contactless transactions would be made annually by 2018 too. So, by all accounts, in just a few years contactless will be much more mainstream.
However, how will mobile and contactless payment become ‘normal’ for everyday consumers? I believe it’s down to TSM – Trusted Service Manager. It really won’t be long before mobile and contactless payments will become as ‘normal’ as card or cash payments.
As a standard accepted by all banks globally, EMV is the natural choice for mobile payments, especially wherever EMV contactless POS infrastructures are in place. We can anticipate that mobile payments with EMV will also become widely deployed, and this will play a major role in the roll-outs we’ll see ahead of 2018.
There are several large scale deployments around the world that already illustrate this. One is JETCO, the biggest automatic teller machine (ATM) network in Hong Kong and Macau, which will issue Visa and MasterCard payment applications, in addition to other multiple payment standards, for its member banks, enabling mobile NFC in those regions. Another is VALYOU, a company owned by Telenor and DNB in Norway, which is planning to deploy EMV mobile payment services for the entire Nordic region, after it rolls out in Norway. Both are working closely with Gemalto to build our TSM solution in to encourage confidence in the security of mobile contactless payments, and therefore build confidence that it could be the norm going forward.
Another key advantage is that for transactions at point of sales terminals, contactless and mobile EMV payments with Secure Elements bring the same level of security as traditional payment with EMV cards. As soon as this is understood, we anticipate contactless mobile EMV payment will become widely accepted, just as everyone already enjoys the security and convenience of paying by card. And, as we learned in our contactless challenge, retailers have a role in explaining the technology to consumers to build confidence.
Do you agree? What else needs to happen before contactless and mobile payments become widely accepted and normal?