Mobile payment companies need to think beyond NFC
As banking business models have changed, so too has the mobile payments ecosystem. Historically, the term "mobile payments" has been synonymous with Near Field Communication.
For years now, the industry has been asking the same question: When will mobile NFC payments really take off?
Perhaps now is the time to ask different questions.
Consider Starbucks, Alipay and WeChat Pay, which are the real outliers in terms of adoption and use. Rather than relying on the existing payment infrastructure, all these platforms use optical scanning technology such as QR codes and bar codes to simplify deployments and broaden acceptance, a point highlighted by Chris Pirkner of Blue Code in his vision for a new European payment scheme leveraging bar codes.
Similarly, the growth of omnichannel retail and the rise of "connected commerce" has led to significant growth across both in-app m-commerce and e-commerce transactions over the past 12 months. Looking to the future, both Hans-Jorg Widiger from Swissbankers and Jukka Yliuntinen from G+D Mobile Security identify in-car payments as a key driver of future mobile payment growth.
As the mobile payment ecosystem has expanded beyond mobile NFC, so too has the security landscape. The question of how to successfully apply existing technologies such as tokenization and biometrics to these new use cases, whilst maintaining a seamless user experience and commercial viability, is now a key priority.
Talk of blockchain and distributed ledger technology (DLT) has dominated banking and fintech for some time. We have been promised a solution to solve the world’s problems, but so far, despite the interest and considerable endeavors of the world’s leading companies, institutions and academics, there has been little in terms of material success.
This could be about to change. According to Nordea’s Ville Sointu, blockchain has now move beyond the "experimentation" phase (characterized by excessive hype) and into the deployment phase. The question now is, what should these deployments look like? For Consult Hyperion’s Dave Birch, banks should not use DLT to simply rehash existing services. Rather, a more radical approach should be considered, using the power of DLT to create new markets that work in new ways.
The plurality of debate and discussion throughout the event demonstrated that the financial services industry is on the cusp of new greatness. Adaptation remains the big challenge. Banks and financial institutions are working to re-evaluate their business models, commercial strategies and operational practices to ensure continued innovation, interoperability and, ultimately, competitiveness. What is apparent, therefore, is that industry collaboration is more important than ever.