Card issuers, mobile providers, and third-party companies are in a race for mobile commerce and the future of consumer payment technology.
Remember these words of wisdom? “Life moves pretty fast, if you don’t stop to look around once in a while, you could miss it.” That was the 1980’s. I wonder what Ferris Bueller might have to say today, when life and the technology that supports it evolves and changes at an almost daily pace.
And mobile based,contactless payment systems are on the bleeding edge of these technological developments. Google has put wheels in motion with some Near Field Communication (NFC) features for its Android smart phones, and full fledged mobile payment options expected to follow shortly. Its guinea pig, “the NFC-enabled Nexus S phone, developed with Samsung Electronics,” is already in action in the market place and “will serve as a test for a Google payment and ad service,” says BusinessWeek.
Apple and its iPhone is another competitor for front position in the mobile payment race, with a strong patent base, significant personnel hires, and innovative ideas for identification including “signing your signature with the corner of your iPhone,” says FastCompany.
Visa has unveiled a mobile contactless payment option “using a MicroSD card solution that can be inserted into the phone’s existing memory slot,” and “Wells Fargo announced this month that it would launch a pilot of the payment option with 200 of its San Francisco employees,” says Mashable.
Starbucks now has mobile payments through their gift card app and even those infamous “Angry Birds” have been busy bees, according to American Banker. Developer Rovio has create a “Bad Piggy Bank” payment system that allows players in some countries to purchase other apps through direct mobile billing.
The big question for credit unions is not just which technology will catch on, and how will it be implemented by consumers, but how will these new payment options affect interchange earnings?
As banks and credit unions consider their options for possible reaction to or even participation in these developing fields, they must ask themselves how quickly will mobile payments take off, and where should the industry be leaders and followers in this emerging field?