James Anderson, senior vice president of shared platform services in the emerging payments group at MasterCard, has been "droning on" for nearly a decade about contactless payments. And the industry is finally catching up.
Near Field Communication (NFC), the technology enabling contactless transactions, is now part of a broader trend in deploying EMV payments everywhere, he said during a panel discussion at Mobile World Congress in Barcelona last week. And this trend will push mobile payments into the mainstream.
"We chose NFC because it would support EMV-style transactions," said Anderson. And because the technology has been adopted by the two largest mobile operating systems, Apple's iOS and Google's Android, MasterCard feels validated.
The Purchase, N.Y., card network launched remote EMV transactions as a part of the Apple Pay roll out. Apple Pay's model brings the EMV security that many countries enjoy for card-present transactions, in-app.
Apple has significant mind share and has popularized the conversation around contactless mobile payments and tokenization. But the broader adoption of NFC for use cases outside payments, such as transit and conference admission (as attendees had to do at MWC), will make consumers more comfortable with the process, said Anderson.
"The market is highly fragmented; there are more than 200 different wallet projects and that's just in Europe," said Peter Vesco, senior vice president of payments at Deutsche Telekom and CEO of ClickandBuy, an Internet payment provider and subsidiary of the German telecommunications company.
This year, these projects will start to consolidate, Vesco said during the panel discussion. While mass adoption of mobile payments is unlikely to happen in 2015, NFC will be one of the global standards for proximity payments, he said.
Although the arena has changed drastically for mobile network operators with new entrants stealing market share from its messaging business, telcos' biggest value proposition remains its distribution. And scaling remains a big issue for mobile payment initiatives. "Global companies still need help to get into local markets," Vesco said.
The industry needs to "align stakeholders in a way that we can all win together," said Rich Clow, managing director and head of digital commerce product management and development at Citi. He likens the industry's move to mobile payments to a relay race where not one person wins but instead a team must work together passing the baton.
Citi and other banks are in a tough spot because they are heavily regulated with know your customer (KYC) and anti-money laundering rules and so can't move as quickly as startup partners would like them to.
Startups don't want to and shouldn't have to think about these things, Clow said. Citi is trying to act more like a startup, he said.
Other legacy payments and financial services companies, including MasterCard, PayPal and Barclays, have also begun working with the developer community, opening up APIs and hosting hackathons.
"The most efficient way to bring payments to mobile...is by going through the operating systems," said Hans Reisgies, co-founder and head of customer solutions center at Sequent, a mobile wallet software provider.
"Easy means apps; we already have the apps we love downloaded to our phone," Reisgies said. It's not about building separate payments apps, which Reisgies thinks was the trouble leading to Softcard's demise, but instead about adding payments to those existing apps.