Solving the challenges with mobile NFC Payments – Part 1
The history of contactless payments
Payments using NFC is nothing new – it is something we have been talking about since 2003/2004.
NFC is often referred to as The radio frequency standard that could solve all problems, removing any friction from payments and removing all of the world’s checkout queues.
NFC has slowly grown popular in the form of the plastic card, but when we talk about NFC payments, I bet the average industry veteran will drift his, or her, mind to mobile NFC payments.
Mobile payments using NFC has almost been considered the Garden of Eden or the fountain of youth. And boy, has it been long expected; try do a search for “year of mobile payments”, and you will find no less than 35+ million results!
If I had a dollar for every time I heard that this year/next year will be the year of mobile payments, I’d rather be drinking Piña Colada at my private beach, rather than writing this blog post.
But something has happened. After the launch of HCE in 2013, Apple Pay and Android Pay in 2015, the avalanche of Issuer-HCE solutions launched in 2016, in 2017 to date, I think we finally can say that mobile payment based on NFC has reached some sort of a maturity and market acceptance. Alas, the offering and acceptance vary from market to market, but the standards are set and the world is moving unified in one direction.
Solving The Challenges of Mobile NFC payments
Mobile contactless payment is in many ways a great answer to several challenges: the user “never” forgets his/her phone at home, you can combine multiple cards in one device, it makes the Issuer look forward-leaning and modern, and it provides a sense of coolness for the one using it. But even as mobile contactless are being spread, it still comes with some challenges.
Personally, I’ve been meeting with Issuers countless times the last five years, and I’ve also had first-hand experience with the eight different wallets I’ve installed and use on a regular basis. In short, the issues and concerns I’ve heard about or experienced are:
- iOS support – only for the selected few in the selected markets that are willing to accept Apple’s terms
- Merchant acceptance – for the user to trust the solution he must trust that it is accepted. In most markets, albeit growing, contactless acceptance is still under par.
- SWW – SWW, or “Something went wrong” is unfortunately still a problem. With a myriad of devices, standards, payment terminals and user expectations to the speed of tap & pay, the user still ever-so-often will experience that “something went wrong”.
- Speed at checkout counter – Some Issuers require the user to unlock their phone, find and open app, select card, and type in PIN before they can tap – it’s not always as easy as just tap-and-pay with your contactless plastic
So how can these challenges be solved? This will be discussed in Part 2 of this blog post about wearable payments.