Tom Hay - Payment Systems Europe - London 14 January, 2015, 08:09 0 likes

The introduction of ApplePay and HCE certainly remove some of the technology barriers to mobile payments, but mobile NFC does not yet meet Marc Andreessen's criterion for success: it must be 10 times better/ cheaper/ faster than what's on the market today. Uber remains one of the few applications to have cleared that hurdle by embedding the payment into the overall consumer transaction, but in-store mobile purchases at POS still have a long way to go. It's still way more convenient to use your card.

A Finextra member 14 January, 2015, 10:19 0 likes

I agree. I tried to use FlyPay the other day, only to find it doesn't accept Amex, even though the restaurant I was in did accept it!  Also, we will never be able to leave our wallets at home in case our battery dies...unless NFC can work like a chip card on a dead phone?

A Finextra member 14 January, 2015, 10:30 0 likes

I don't think NFC will be the sole preserve of mobile payments...  so if anything the Deloitte fingures might be understated.  Zapp is going to change the game here in the UK in 2015 and they don't use NFC or HCE.....

Tom Hay - Payment Systems Europe - London 14 January, 2015, 10:55 0 likes

I wish Zapp all the best, and I know it's a killer proposition for m-commerce, but in terms of user experience in-store I don't believe it will be any better than NFC or HCE solutions, let alone cards. Perhaps I will be pleasantly surprised when it launches!

A Finextra member 14 January, 2015, 11:58 0 likes

Re comment number 3 "Also, we will never be able to leave our wallets at home in case our battery dies...unless NFC can work like a chip card on a dead phone?"

If you are using payment services secured with a SIM card, then you can complete transactions with a "dead battery", covering both payments and transport services.

A "dead battery" may not have enough money to run the handset, but it will still have enough left in it to power a SIM based NFC transaction. Plus an NFC enabled SIM card, can also generate the power it needs to complete a transaction by interacting with the electro magnetic field (EMF) field emitted by the POS terminal, ie exactly the same way contactless payment cards work.

The same does not apply to HCE based payments as they do require network connectivity to function. So if your handset battery is dead, you will be in trouble.

A Finextra member 14 January, 2015, 12:09 0 likes

Thanks James.  So NFC is really the only option to guard against battery issues?  Looking at Zapp, it looks like a proper app, so I don't think it would be any use in this case.

Geoffrey Barraclough - The Business of Payments - London 14 January, 2015, 12:18 0 likes

Deloitte report that 3% of UK consumers have used their mobile to make a purchase in-store. I wonder if that is all Starbucks? 

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 14 January, 2015, 12:21 0 likes

I never thought mobile payments had hit mainstream but, even to me, the mid-2014 adoption rate of "less than half a percent of about 450 million NFC phones" seems too low. Starbucks is cited as the most popular mobile payment so far and it does not use NFC. So, any forecast of mobile payments on the basis of the sweeping assumption that  mobile payments = NFC payments seems incomprehensive.

A Finextra member 14 January, 2015, 12:41 0 likes

Hi Ketharaman.  It may well be - I was just trying to work out the benefits of mobile payment over cards.  The only benefit I would see would be the ability to not carry a wallet (which would be great), but this would mean that you'd have to be able to pay with a dead phone.  Even if the phone has battery, it is way quicker to whip out a card than it is to unlock your phone, find the app, press the right button, etc., so it would need to be a chip that could just be waved without pressing anything.  Then comes the issue of "card clash", where more than one card is used when you wave your wallet, for example on a train barrier.  To get around that, I actually carry my train pass in my phone case, but if the phone had other cards loaded on it, then they may get used too!

All sounds very mundane, but realistically, people won't change from cards until these issues are solved once and for all.  I think Coin is a good idea, but last time I checked, it only worked for magstripe cards, which basically rules it out in the UK.

A Finextra member 14 January, 2015, 16:47 0 likes

Hi, "A Finextra member | 14 January, 2015, 12:09"

NFC is the overarching technology, so a HCE, SIM or embedded secure element based services would all interact with the POS using NFC. It's simply that some services / apps that utilise NFC also require network connectivity. It sounds like Zapp might be one of those that needs to be connected to either a mobile network or wi-fi to work. So no battery = no Zapp.

Re other comments about the convenience of mobile payments. This really depends on the security level the user wants to set. If you set it up correctly the i-Phone 6 will open up ApplePay and offer up your pre-selected preferred credit card as soon as you put your finger on the Touch ID pad and bring it within the range of an NFC enabled POS reader. It really couldn't be simpler. Apple have set the bar really high for security and convenience and and other payment service providers will have to get close to this performance level in order to remain relevant.