Mobile Payments Conference raises EMV questions

Visa Inc. and MasterCard Worldwide initiatives to speed adoption of Europay/MasterCard/Visa (EMV) and near field communication (NFC) technology by U.S. merchants may not turn EMV into the dominant POS choice for consumers or retailers, according to keynote speakers at the Mobile Payments Conference hosted by Mobile Marketing and Technology. The conference, titled Mobile Commerce is the New Buzz, was held at the Fairmont Hotel in San Jose, Calif., March 8 and 9, 2012.

Significant EMV barriers

David Schropfer, Head of Mobile Commerce and Partner at The Luciano Group consultancy, was the first of two keynote speakers. He said for mobile commerce to succeed, it has to reduce costs and drive new sales for merchants, and he is not convinced EMV is the best vehicle for driving down costs and improving sales.

"Whether mobile payments are good or bad for Visa remains to be seen," he told the conference audience. "Visa is as smart as anyone out there. They are hedging their bets. Visa is playing every possible [payment technology] iteration and that's probably a good thing.

"The question is if Visa can be disintermediated by PayPal can it be forced out of the market? The answer is 'no,' but Visa may have to cut pricing or compete which they would rather not do. The bottom line is things are not going to be as rosy for Visa as they are today."

He noted there are two big problems that need to be overcome as EMV is introduced into the United States: the POS terminals have to go contactless and they have to go EMV. "Those are not the same thing," he said, adding that each has its own technical and physical challenges to introduction.

The real opportunity

The second keynote speaker, Richard Crone, Chief Executive Officer of Crone Associates, a Massachusetts company that helps companies "create strategic advantage in the financial services marketplace" through electronic payments, agreed with Schropfer's statements.

Crone added that the key to the mobile payments space is consumer data. He said the retailer who is able to get consumers to opt-in to sharing their mobile credentials, their payment credentials and other critical personal and payment information is the retailer who will have the best data, the best analytics and the best chance at driving sales and leveraging the power of the mobile marketplace.

A walled garden

Crone said he isn't sold on NFC. "Of the 200,000 NFC deployments in the United States, all are subsidized by card associations because they want to create a walled garden," he said.

Crone believes the EMV/NFC effort is an attempt to protect card brands. "NFC is at the point of inflated expectation," he said, adding that the potential for cloud-based POS solutions is "far stronger than chip and PIN or EMV could ever be."

After his address, Crone said, "The card companies are thinking they need a card emulation model. This is the ultimate paving of a cow path. They are just trying to preserve the infrastructure for those who have to live with it."

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