Ollie's world - Update on contactless payments

If, like me, you attended the recent Retail Solutions event in London you would have seen stands promoting contactless payments. I've reviewed this technology in its own right in previous newsletters and highlighting the benefits: speed of payment, zero cash handling costs for the merchant, convenience for the consumer, blah, blah.

We know that MasterCard and Visa have been promoting this technology globally, we know there's been a slow start, but more recently things, interesting things, have been happening. Some major merchants are now really trying hard to get on board to install the new readers, banks are issuing cards with contactless by default, the thing is starting to gain a life of its own.

But I think something even more interesting is going on in the background. Once there is an installed base for contactless payments, it is only one small step to the even newer technology of Near-Field Communication (NFC). NFC, in simple terms, is like Bluetooth, it allows two consenting devices to communicate wirelessly. However where NFC becomes really powerful is for the secure exchange of information, like payment, and when mobile phones become involved... bingo!

With almost 3.3 billion mobile phones - over half the world's population - mobile phones could easily become the payment 'card' of the future: one phone pretending to be a wallet-full of debit, credit, loyalty, you-name-it cards, with the other benefit of being able to store information securely.

Well I'm off to the movies. I stroll down to the tube station and buy my ticket with.. my phone. While I'm waiting I notice a poster offering a popcorn voucher at the cinema. Touch down.. the vouchers in my phone. I pay for my movie ticket, with the mobile of course, but I'm also given a back-hander - a time-limited discount for my next visit. After the show, despite my youthful looks, I'm let in to the bar proving with my ID stored on my phone. My mate buys the beers, it's his turn, and he owes me a tenner. Click, touchdown and he's transferred his long overdue debt to my mobile. As I stroll home, I no longer have to fumble for the door key.. you guessed it!

So wise-up, the investment being made in contactless is also a gateway to a whole new world of mobile phone based transactions: payments and beyond.

Tuesday, July 1, 2008