Your wallet is calling – Who is ready for the new iPhone?
iPhone 5, set to be revealed in early September has some mounting pressures. Talking heads and payment industry professionals alike are expecting the new IPhone to lead the way for mobile payments in the United States. Even with Android’s dominance of the mobile market (59% to Apple’s 23%), Apple’s edgy, cool kid on the block, trend setting attitude is expected to be the catalyst that sends mobile payments mainstream.
Rumor has it that iphone5 is equipped with Near Field Communication (NFC) technology which in short, will allow consumers to carry their credit cards digitally on their cell phones and use them to pay by waving it in front of special terminals (like a Mobile Speedpass). In addition the new iPhone may also have an added layer of security requiring fingerprint recognition to access the payments app and other features.
But how on earth is all of this supposed to work? How are business owner’s going to get money off customer’s phones? The reality is, if merchants don’t have the right equipment that communicates to the NFC transmitters in cell phones, this is all going nowhere fast.
Most U.S. business owners will be disgruntled when they realize that we are on the brink of eliminating the good old magnetic strip credit card as we know it. We are moving (a bit slower than the rest of the world) towards a marketplace which will be dominated by EMV credit cards (smartcards using computer chips which are more secure) and NFC enabled phones and devices. For merchants, this means purchasing all new equipment compatible with all this new technology, but worst of all, this means change…
But much like the “popular” kid in high school, Apple is expected to “peer pressure” the industry in to making this move. “Once Apple commits to a payments protocol, and deploys it on its phones, we will see mobile payment move from a concept to reality in record speed,” said Christina Sommer, Vice President in the Global Insights group of MasterCard Worldwide in her Payments Perspective Blog.
None of this NFC stuff is new… Verifone has had the NFC terminals on the market for over a year and the first patent for NFC technology (used for other purposes) was granted to Charles Walton in 1983.In essence this payments revolution is really just sitting around waiting for a leader – for someone to break the mold. According to a May 2012 report by Juniper Research, near field communications (NFC) mobile payments will exceed $180 billion worldwide in 2017.
How much of that will be in the U.S.? Well, there are some big names that are kicking the idea around. Companies such as 7-Eleven, Coca-Cola, Gap and Old Navy have been testing and running NFC trials.
So let’s play follow the leader. Ok, wait who is the leader? Credit card networks? Mobile Networks? Apple? Android? Or, are you as a business owner ready to offer your customers the “hottest trend” in payments and join the cool kids … Would you even consider it?
What will it take for business owners to make this change?