PayTag: payments pioneer or a step short of a mobile wallet?

Off the back of Pingit, Barclaycard is continuing its assault on the mobile payments world with the launch of its recent ‘mobile’ contactless offering PayTag. Positioned as the low-tech alternative to investing in an NFC-enabled handset, the contactless sticker from Barclaycard enables any of its credit card customers to turn their mobile phone into a contactless payment device.

Yet another contactless service from Barclaycard, yes, but can this be dubbed a groundbreaking development in the mobile payments space? On the surface of it, no. For a start, this is not a new technology.

In fact, can this even be labelled a ‘mobile’ payments offering? The mobile phone isn’t actually a necessity during the transaction, with any hard surface being sufficient enough to get the contactless sticker working. Theoretically, that could be a Kit Kat bar, or for the women out there, a compact vanity mirror!

Delve a little deeper and where PayTag may not be pushing the boundaries of innovation, it does overcome a key challenge in enabling broader consumer uptake of contactless and mobile payments. The solution is affordable and takes away the need to have a smartphone, let alone an NFC capable phone. This has the potential to take contactless, and indeed mobile payments, to the masses. At the very least, this will get the average consumer very familiar with swiping their mobile phone to pay for low value transactions.

For Barclaycard, PayTag also facilitates an ingenious way to collate customer data by simply looking at their transactional behaviour. If harnessed into the business, it will enable them to better understand their customers and offer more targeted and relevant products and services. Indeed, they will generate valuable insight into which segments of their customer base start using this sticker, how their spending behaviour has changed, and the most common places it gets used. Such data should be viewed as proverbial gold dust to the bank!!

More importantly for Barclaycard, if PayTag can attract sufficient volumes of business, Barclaycard could have a significant amount of leveraging power to put pressure on mobile network operators to play according to their rules. One could argue that this is the sole reason for a bank to offer this service...

However, while PayTag may increase rates of adoption and provide a vital stepping stone to NFC payments over time, it crucially lacks the innovation required to convert the doubters and the cynics now. For that, consumers need a ‘real’ mobile wallet offering that pushes the boundaries of how they can use and manage money with their phone.

More importantly, these services need to combine so much more, giving consumers loyalty rewards and vouchers, banking and transfer services, account information, as well as payment options like PayTag and Pingit, all in one place, to make a real difference to consumers’ lives.