The comment about lack of connectivity in the London Underground is a good one, but couldn't you just download a token in advance? Not ideal, but not a showstopper either. And most other places, it's not an issue.
As for the security point, I don't get that at all. How can a one-use token lead to any sort of bank breach? It's actually safer than passing a real card number through a terminal.
With regard to the inability of banks and carriers to come together on mobile payments, my hope is that ideas like this will persuade the carriers that they cannot control the handset, and therefore must negotiate with the banks if they don't want to be irrelevant.
04 Mar 2013 17:49 Read comment
Chris,
The main difference between Macy's and iTunes that I can see is that Macy's owns its merchandise, whereas iTunes does not. When you buy a magazine on iNewsstand, Apple doesn't send you a PDF; instead, it notifies the magazine publisher that you have bought an issue, and the publisher unlocks it within the publisher's own app. This led to problems last year when someone figured out how to spoof Apple's authentication server. People were able to use the exploit to send fake certificates to app developers, allowing them to unlock content or in-game currency without paying for it. This is closer to cloning a credit card than it is to shoplifting clothing, which is why I think iTunes is closer to a payment scheme than it is to a store.
29 Jan 2013 22:07 Read comment
iTunes is a wallet in the sense that it can be used to buy goods and services from a variety of merchants. The fact that these merchants all traffic in digital goods in the Apple ecosystem is the only difference. iTunes is not just a store, in that you can make in-app purchases without ever going into the desktop iTunes application; for example, subscribing to a magazine through iNewsstand. Originally, of course, iTunes was a digital music store, hence the name; however, over the years it has become much more than that. Which is why last year, before it became clear that the iPhone 5 would not have NFC, many people speculated that Apple would be a leader in the wallet space. If you look at the amount of money being spent on apps, in-app purchases, and digital content (music, movies, magazines, comics, TV, etc.), it is much greater than anything we see in the physical realm. And that's not even counting other mobile wallets like Google Play, XBox points, and Facebook credits (remember when Facebook credits were going to take over the world?).
I hope that clarifies my point of view.
29 Jan 2013 20:44 Read comment
I see that you are thinking of a replacement for your leather wallet for face-to-face commerce, but that's just one form of mobile wallet, and not the one with the greatest market share right now. iTunes, for example, dwarfs anything in the physical realm. C&G could have defined mobile wallets as suitable for face-to-face commerce, and thus excluded V.me altogether, but they did not, which led to the problems in criteria and scoring. The question of interest to me is: where are payments migrating, not whether leather wallets are giving way to mobile phone-based wallets anytime soon (they are not).
29 Jan 2013 19:35 Read comment
It's important to look at the methodology when evaluating this study - it was clearly difficult for C&G to find good ways to compare widely different wallet designs, and they did not always find the correct solution, in my view. For example, one criterion was number of locations, which is why Starbucks, a closed loop wallet, scores so highly. However, in the e-commerce world, number of locations is meaningless, and the relevant criterion is number of merchants. This is why V.me, which is online-only at this point, scores so poorly, even though it is supported at more merchants than Starbucks is. We either need a different criterion, or separate studies.
In short, I think this study is more instructive as a first attempt at comparing wallets than as a basis for declaring winners and losers.
29 Jan 2013 18:25 Read comment
Brett King clarified on Twitter that it is MasterCard rules, not the Durbin Amendment, that are forcing the use of companion plastic cards. Please correct the story, as it is creating a lot of confusion.
17 Dec 2012 19:50 Read comment
I guess I should also mention that there was no unanimity on the panel regarding the inevitability of NFC; U.S. Bank's Dominic Venturo, in particular, highlighted the importance of testing other methods, such as SMS, mobile apps, and 2D barcodes. The big advantage that NFC has over card-based solutions, in my mind, is the user interface and processing power that a smartphone affords, which should allow more sophisticated applications. However, it does have a serious dependency on the merchant's willingness to upgrade their terminals, and other technologies will no doubt be used in the near term.
14 Oct 2011 22:07 Read comment
As the moderator of this panel, I would like to add that there was a whole discussion of mobile offers that this summary left out. Mobile offers are the key to the business case with mobile wallets; by charging merchants to deliver targeted offers to prospective customers, banks and wallet providers such as Google can recoup the costs of the technology without imposing transaction fees. NFC payments by themselves cannot provide enough value to justify the investment, which is why Isis is having trouble.
13 Oct 2011 21:38 Read comment
The key question I have is whether these transfers will be real-time; if not, then they are not going to be significantly better than what exists today. A system that requires you to belong to one of a select group of banks is starting at a disadvantage anyway.
25 May 2011 17:15 Read comment
Jobs could hardly claim that including NFC in the iPhone "changes everything" if all the other handset manufacturers are already doing it. I could see Apple holding off until they get it right. Also, I am not alone in thinking that NFC at this point is premature - merchant support is sketchy at best, the business case is unclear, there are numerous competing alternatives (QR codes, card swipers, message-based services, app stores and digital marketplaces like iTunes), and pricing is a huge problem, especially post-Durbin. If Apple tried to come out with a contactless payment application based on the iTunes store, the interchange they would have to charge to cover their costs would be prohibitive for merchants. Remember, they don't actually have a source of funds; they have to get everything from credit cards, debit cards, or ACH, and that all costs them money. It's fine when they are taking a 30% cut on digital goods purchases, but not when they are competing at the point of sale.
09 May 2011 16:42 Read comment
Joel HobackProduct Manager / Management Consultant at Independent
Gertjan ReindersConsultant at Independent
Shailesh GroverChief Digital and Innovation Officer at Independent
Brie LamRegulatory Compliance Consulant at Independent
Linda MeyersonBlogger/Writer at Independent
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