Now that Apple has entered the NFC payments game with Apple Pay, merchants must decide how to keep pace with the technology. There is a chicken-and-egg game at play: consumers will only adopt mobile payments if they can use it, and merchants will only adopt the payment systems required to accept mobile payments when there is a critical mass of consumers.
Apple, for its part, is trying to build out a mobile payments ecosystem. They have secured relationships with banks, payment networks and processors, as well as a handful of national retailers as launch partners, such as Macy’s and McDonald’s. With expected sales of iPhone 6 to reach upwards of 80 million units, they are also trying to create the tipping point from the consumer side.
But the question remains: how will mobile payments grow from a novelty into a daily routine?
It is hard to argue that mobile payments will make things easier for the consumer, at least at first. Swiping credit cards is an engrained behavior, and universally accepted. A mobile wallet solution will take some time to gather steam – just ask PayPal, Softcard and Google. And imagine a table full of diners handing their phones to a waiter the way we casually throw cards into a bill holder at a restaurant!
Apple is betting on tokenization technology to alleviate consumers’ security woes, but will consumers understand what that even means, let alone trust it? With breaches, leaks and cyber attacks and hacks making headlines on a weekly basis, consumers have a growing skepticism about any security claims.
EMV chips are – or were – or will be – or won’t be – the payment industry’s white knight. But EMV merely validates that a cardholder and a particular card are paired together, it does nothing to secure the merchant’s point of sale or network.
The reality is, all of the above are true, and all of the above are also flawed. For a merchant, the question will not be this or that, it must be this and that. Merchants want to be, and need to be able to accept payments in whatever form the customer wants.
Making changes to a point of sale system is not a trivial matter. But there are smarter, simpler and more secure ways of making changes that make it easy for merchants and their customers to transact. For instance, a fully-functional and PCI-Validated P2PE solution like FreedomPay’s offers merchants a payment terminal that connects to existing POS systems and accepts credit and debit cards, EMV cards, and NFC payments, all within the wrapper of the strictest PCI standards.
Apple has done what Apple does best: it challenges the industry to think differently. But for the merchants who are inundated with noise and features and technology meant to deliver security and convenience, there are few good options.
We at FreedomPay believe that the answer is truly inclusive: magstripe cards, EMV cards, mobile wallet and wearables alike. So while the consumer technology companies are competing to put a device in your pocket or on your wrist, we ask merchants: what device is on your counter?