Contactless card paymentMore than a million customers already use Barclaycard OnePulse (the combined Oyster card, Visa credit card and Visa contactless payment card) to make payments of £10 or under by placing their card against a reader in stores such as Boots, EAT and Krispy Kreme. Visa contactless cards such as OnePulse use Radio Frequency Identification (RFID) technology – essentially a tiny antenna – to transmit data to a bank-owned card reader. Small transactions that would once have been made with cash are completed in less than a second, without entering a pin. Queues are cut, footfall grows and the cost of handling and banking cash are slashed, according to retailers. “We are very keen on contactless technology because it speeds up payment at the till,” says Billy Waters, IT manager at restaurant chain Yo! Sushi, which accepts contactless cards at most outlets. “It also helps our brand because it’s innovative – our customers like that.”
Secure cardsSome businesses may still worry about card fraud. In addition to the existing measures to combat fraud (chip-and-pin and Verified by Visa for online transactions, for example), the new Visa CodeSure is one of a new generation of cards that authenticate transactions when the cardholder is not at the seller’s premises and chip-and-pin cannot be used. Unlike traditional cards, it incorporates a battery, a keypad and an alphanumeric display. Online shoppers simply punch their pin into the card, which generates a unique code. Users then enter the code into a “Verified by Visa” window on their screen. Visa also provides businesses with the ability to keep a close eye on their expenditure using online-based systems such as Visa IntelliLink Spend Management and PCCL’s eSolutions software. Businesses can easily see who is buying, from whom, how much and when. Visa commercial card payments are also protected with a corporate liability waiver insurance provided by each Visa-issuing bank.
Contactless mobile paymentCould mobile phones eventually replace plastic? Almost certainly, according to Howard Wilcox, a senior analyst at wireless consultancy Juniper Research. But the speed of the revolution will depend on how smoothly new partnerships between banks, mobile operators and payment services providers bed down. Soon we could all be using our handsets as virtual wallets, where “tap-and-go” payment takes place by simply placing our phones against a reader. “This looks like the year when, in some countries at least, using your phone as a credit card for lower value purchases will become a reality,” says Wilcox. “We are expecting a lot of new agreements to be announced over the next nine months. But contactless won’t happen all at once because stores also need to get on board and deploy contactless readers.” Mobile contactless systems use Near Field Communication technology, where wireless communication transfers data between devices. This will be standard on Nokia’s C7 smartphone, which was unveiled in February. It will also be incorporated into the next generation of iPhones and iPads, according to industry rumour. “Like a camera, it will be there whether you want it or not,” says Wilcox. Meanwhile, Visa Europe is testing a type of memory card with an NFC-enabled chip that customers can clip into their mobile phones to allow contactless payment. Perhaps surprisingly, 87 per cent of iPhone users polled by Visa said they would be happy to add extra hardware to facilitate contact-free spending.
Mobile bankingSoon, your mobile could be all you need for banking as well as shopping. AIM-listed Monitise, founded in 2003, has developed the world’s first mobile banking network. Visa Europe has signed a partnership agreement with Monitise to develop and supply mobile-payments services for Visa Europe’s member banks and financial institutions across Europe. Subscribers – of which there are now 3.5 million globally – can check their balance and move their money around remotely, using their phones instead of being tied to a web terminal. According to Monitise research, mobile bankers monitor their accounts on average 16-18 times a month, three times more than internet bankers. “The era of connected commerce is upon us,” says Monetise CEO Alistair Lukies. “We expect consumer appetite for mobile money services to grow substantially.”
Mobile e-commerceFirst, companies sent clients offers and other communications by text. Now they are starting to send electronic tickets, proximity marketing messages and loyalty vouchers that can be scanned in stores, just like paper coupons, at the point of sale. Yo! Sushi is among the growing firms that expect to make use of mobile ecommerce. “We’re always looking at better, more secure and more effective ways of getting vouchers out to people,” says Waters.
Person-to-person paymentsTransferring money via mobile is already commonplace. But now sole traders can accept electronic payments via a card reader that plugs into their phone. The gadget has been developed by US start-up Square, led by Twitter co-founder Jack Dorsey. “Enabling easy card payments on-site can help increase sales, reach new customers and involve the merchants in the larger electronic payments community,” says Visa’s Harrison. Sounds like science fiction? Think again. There are already at least 26,000 contactless payment terminals in the UK – and in January, McDonald’s confirmed that its 1,200 UK outlets would go contactless by the summer, making fast food even faster. Why, in 2011, are buyers in businesses still having to write out a cheque, post it and, with no automated confirmation of receipt, repeatedly check and reconcile it to their bank statement, asks Harrison? Why are sellers still having to wait for cheques to be mailed to them, check they’re for the correct amount and take them to the bank to be cleared? Give it another five years, and cheques will have been phased out completely – and a new generation of payment methods will be firmly instilled in the business landscape.
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