February 4th, 2011

Pay On the Go

Plans to launch mobile “wallet” technology look set to come to fruition this year, as major players like Orange and Barclaycard continue to discuss the future of contactless, cardless payments. The technology Near Field Communication, or NFC, has been around for a while, and allows the exchange of secure data simply by waving devices within only a few inches of one another. This is being hailed as the beginning of the end for credit and debit cards.

While the technology is undoubtedly imminent, for it to infiltrate shops could take years – it would be a gradual process which would happen over many years. Although some places have been trialing the technology, it has been mostly coffee outlets, and they can only take payments under £15, and their successes have been moderate.

While it may be easy for the manufacturers of smart phones to introduce the technology to all their upcoming model designs, retailers on the high street are unfortunately probably not in the position where they can afford to deploy new, and albeit slightly unnecessary technology. Following the VAT rise, retailers are already struggling to absorb the costs to their business; installing new technology is hardly likely to be a priority.

I also imagine there will be many questions raised about security – there are risks that the signal could be infiltrated, and there are also worries that losing your phone could now be akin to losing your wallet – thieves and hackers may have access to your banking details. Similarly, there are concerns from retailers that similarly to the elevated cost of accepting card payments to retailers, there will be similar costs incurred by the retailer for accepting mobile payment.

While there were similar concerns with online shopping in its infancy, it is established enough, and has proven secure technology which mean it is trusted as well as safe. This also misses the key benefit of new retail related technology – it is unlikely to be cost efficient and does little for the retailer.

There are however, plenty of positive results coming through for mobile phone shopping, which allows payment online, is still convenient and available “on-the-go”, and works to drive footfall and loyalty into stores as well as revenue online.

With use of smartphone and tablet PCs rising all the time, it seems very likely that this will play an important part of online shopping activity, once the security aspects are more comprehensively covered off.