There's lots of new innovation going on in payments. Some of the ideas make sense and some are crazy. Regardless of each ideas success or failure, they all point to an industry in need of innovation.
Is this good or bad news for those serving the payments industry today like banks, merchants, retailers, transit authorities, etc.? Can new innovations benefit all parties involved?
The answer to both is yes. Over the years commerce systems have grown more complex adding significant weight on top of anyone wanting to innovate in the space. This is where it gets exciting, as all of that is about to change.
Enter mobile and host card emulation (HCE). Together we have a green field. It is now possible for payments to be a part of any user experience across any communication medium. NFC, BLE, private label cards, gift cards, rewards credit cards, and local bank debit cards are all game in the new mobile commerce world. This really starts to look like any time anywhere." It can be a reality for many in the payments and commerce supply ecosystem.
Take for example a new morning experience where you dont have to wait in line at Starbucks, McDonald's or Dunkin' Donuts for morning coffee. In the new mobile HCE ecosystem customers can place their order ahead of time and the merchant can achieve card present rates.
The revolution doesnt have to stop there. Mobile has the opportunity to take payments and commerce way beyond preorders and reduced wait time. Mobile and HCE open up new opportunities for organizations to combine dynamic user experiences with traditional payment systems. This gives banks, card issuers, retailers, merchants, developers, or anyone the ability to enhance user interaction.
Take the transit space. What would life be like if you could use your smartphone to pay going through the turnstile and order breakfast at the same time? Lets assume someone rides the subway every day morning to work and buys Starbucks coffee every morning. What if you could combine the experience of tapping your phone on a turnstile to enter the subway and that fired up an order to your favorite Starbucks coffee at your preferred location. All you had to do was confirm your usual order or decline it.
What if your ride could be subsidized by companies that wanted your attention? A company like HBO could offer a subsidy of $1 off bus fare for the week of the premier new series. You get considerable value in the form of an entertaining video and discounted ride and in return they win an opportunity to gain you as a customer.
The industry is prime for innovation to take place and it may surprise some the type of innovation that is taking place. The good news is it appears to be beneficial for everyone involved.
Ted Fifelski is the President and Co-Founder of SimplyTapp, Inc.