Today, there are few people who have successfully managed to stay away from credit cards. And then there are the many who have succumbed. But new developments in the sector mean that more customers will soon succumb to the lure of mobile payments as technology allows for new developments. One of these, the mobile wallet, makes paying for goods and services as simple as playing with your phone.
Emirates NBD, in collaboration with Etisalat, Visa and Gemalto, recently launched a pilot mobile payment system called MoneyMobile. This contactless payment system allows customers to make payments by waving their near field communications (NFC)-enabled handsets over Visa payWave terminals.
"Offering multiple levels of security, the MoneyMobile solution clearly represents the retail experience of the future," says R. Sivaram, Senior Vice-President and Head of Cards, Retail Cards Business, Emirates NBD. Like the rest of the industry, he is clearly delighted by the appeal of this new technology.
NFC is a short-range high frequency wireless communication technology that uses radio waves to enable the exchange of data between devices. All that's needed for transmission between the mobile phone and the merchant's terminal is that the devices be held about 1.5 inches apart.
One in five new smartphones around the world will be NFC-enabled by 2014, which amounts to about 300 million units, Juniper Research estimates. Operators will introduce the service in 20 countries before the end of the year, mostly in western Europe and North America, according to Juniper.
"The introduction of Mobile NFC services is a great way to simplify the consumer payment experience, due to its ease of use and convenience," says Marwan Al Qadi, Acting Senior Director, Electronic and Mobile Commerce, Etisalat, adding that the opportunity could revolutionise the consumer payment experience in the UAE.
Emirates NBD's MoneyMobile announcement followed a roll-out of an NFC-branded mobile device, among select staff at Emirates NBD, Etisalat, Visa and Gemalto who will be testing the device during this initial phase.
Wave to the future
Kamran Siddiqi, General Manager, Visa Middle East, points out that mobile payments are quickly becoming the way of the future as the widespread adoption of mobile technology changes how people connect with each other. "Users will enjoy the ease and convenience of simply scanning their phone to pay as they breeze through the checkout in stores where they see the Visa payWave sign," he says. This sign is currently displayed at just over a dozen retailers in the Emirates, including select LuLu hypermarkets and coffee shops such as Gloria Jean's, Costa and Cinnabon.
Similar to Emirates NBD's MoneyMobile, MasterCard's new technology enables and encourages next-generation digital payments as customers can now make purchases in stores with the touch of a tablet or the tap of a smartphone. The PayPass wallet service, announced in the United States earlier this month, offers three distinct components — PayPass Acceptance Network (PayPass Online and PayPass Contactless), PayPass Wallet and PayPass API.
Payment on demand
"Consumers are looking to pay for goods when, how and where they choose. Merchants want flexibility to easily accept digital payments so they can convert more browsers to buyers both online and in-store," says Ed McLaughlin, Chief Emerging Payments Officer, MasterCard. "We realise that when it comes to payments, no single wallet will rule them all. PayPass Wallet Services simplifies the shopping experience, while providing flexibility and choice to merchants, banks and consumers."
Two interesting aspects of PayPass are the PayPass Contactless and the PayPass Wallet. The PayPass Wallet offers a full suite of digital wallet solutions, which enable banks, merchants and partners to white label their own wallets. It allows consumers to store payment and shipping information in one convenient and secure place. The wallet is open, which means that consumers can use American Express, Discover, Visa and other branded credit, debit and prepaid cards.
The PayPass Contactless uses NFC technology to help merchants accept electronic payments in a store at the point of sale. MasterCard announced that this technology will be made available to partners in the third quarter of 2012, initially in the US, Canada, UK and Australia and, subsequently, in other countries.
These join other payments already being used in more advanced consumer markets, such as the Google Wallet. Still not available outside the US, it stores a consumer's credit card on his phone, allowing shoppers to check out by simply tapping their phones at the point of sale.
Jean-Claude Deturche is Senior Vice-President, Mobile Financial Services at Gemalto, a leading digital security provider. He believes the service is safer and will improve the retail experience. "This new service promises to revolutionise the payment, retail and mobile ecosystems, whilst enhancing shopping experience and bringing enormous benefits to consumers and merchants," he says. Gemalto said earlier this month that it may double its business in NFC-equipped smart cards for mobile phones.
Obsolete leather
With the hype surrounding NFC and mobile wallets, there are a few companies taking things further. A few weeks ago, MySingleLink, a technology company based in San Antonio, Texas, launched a new patent-pending technology called MSL Digital Wallet.
"Anything you can put in a physical wallet, you can store into the MSL Digital Wallet. You'll never have to carry a physical wallet again," says Gopal Nandakumar, President of MySingleLink. "Other companies have introduced digital wallets, but ours is unique because of its technology, accessibility and security."
Digital wallets use NFC that requires special hardware. MSL Wallet does not require any special hardware and safely works on all smartphones, with all credit/debit cards and merchants would never receive sensitive information.
Using the MSL Wallet smartphone app, the consumer scans a Quick Response code displayed at a shop to get a unique, random number with blanks. Then the consumer replaces the blanks with a unique Personal Identification Number to create a Single Use Digital Signature that the merchant uses to complete the transaction. An email and text receipt is instantly shared with both merchant and consumer.
Paying with your phone just got even simpler.
— With inputs from Bloomberg
