Page 13 - GS170101

News
"The Yahoo breach is just one of a series of wake-up calls
highlighting the growing threat we've all watched expand
over the past several years," Knight said.
NFC Forum adds
specs, Chase goes QR
T he NFC Forum released new specifications
intended to enable near field communication
(NFC)-enabled devices to communicate more
broadly. The NFC Forum is a standards body
sponsored by leading payment and technology com-
panies, including Apple Inc., Google Inc., Intel Corp.,
Mastercard, Nokia Corp., Samsung Corp., Sony Corp. and
Visa Inc.
The new specifications address peer-to-peer and broader
communications between NFC-reading devices and tags.
For example, a new set of specifications details how
multiple secure payment applications can be installed and
flexibly accessed by end users.
NFC provides a standardized set of wireless communica-
tion protocols for interaction between two electronic de-
vices that are in close proximity, such as smartphones and
POS devices. All leading mobile operating systems and
carriers support NFC. The latest generation of POS termi-
nals (Europay, Mastercard and Visa [EMV]-compliant de-
vices) also can support NFC, which supports tap-and-go
payments.
NFC not for everyone
Despite the proliferation of NFC payment schemes, some
merchants and banks have shown a preference for an
alternative technology: quick response (QR) codes. With
this technology a code is displayed to customers at the
POS, which customers scan using QR readers in their
mobile devices, then press OK to authorize payments.
Starbucks Corp. uses QR codes for its popular mobile
payment app, and at last count, one in four of its customers market operations. That was followed by the government
were regularly using the app, according to company
statements. Retailing giant Wal-Mart Stores Inc. is also
gung ho on QR codes, having adopted the technology to
support its Walmart Pay mobile wallet app.
In November 2016, Chase Bank, the U.S. consumer and
commercial banking arm of JPMorgan Chase & Co., rolled
out Chase Pay, its new digital solution for in-store, in-app payment companies there, including Mastercard and Visa,
and online payments that uses QR codes. Starbucks and
Best Buy Inc. stores are the first to accept the new QR
code-based payment option, and Wal-Mart stated it, too,
will accept the new Chase payment option. Chase said
other large retailers will soon join the group. Chase also
supports Apple Pay.
"By focusing on merchant needs first – lower cost, zero
fraud liability – we've got a real opportunity to break
through the mobile payments noise," said Jennifer Roberts,
President of Strategic Alliances and Loyalty Solutions at
Chase.
QR codes popular internationally
NFC-based mobile wallets have made significant inroads
in many developed economies. This may be due in part
to the proliferation of smartphones in those countries.
According to the Pew Research Center, 72 percent of
adult Americans owned smartphones in 2015 (among
millennials, ownership was over 90 percent); in India 17
percent of adults owned smartphones. In China it's 58
percent; throughout most of Africa, fewer than 20 percent
owned smartphones.
The leading mobile wallet schemes in China, a nation that
has become fertile ground for growing card payments,
support QR codes. (These schemes also support NFC
payments, but a majority of users prefer using QR Codes,
according to Chinese media reports.) Recently, Alipay
(China) Internet Technology Co. Ltd. (with more than
400 million active users, it is the largest of these schemes)
signed deals with leading U.S. acquirer First Data Corp.
and device manufacturer Verifone.
Through their agreements, the companies will support
acceptance of the Alipay mobile app at top tier merchant
locations in the United States that are frequented by
Chinese tourists. The app will use geo-positioning data
from those tourists' mobile devices to direct them to nearby
stores where they can use Alipay, the company said.
QR codes also have proven popular in India, where the
government has been actively promoting mobile payments
in hopes of moving hundreds of millions of unbanked
citizens into the financial mainstream. More recently,
the country banned two of its largest denomination
currencies in an effort to fight corruption and black
offering discounts on certain services (like petroleum)
and transaction taxes when payments are made digitally,
according to Bloomberg.
The largest digital payment platform in India claims over
1 million merchants use its QR codes to support mobile
payments. In December, the country's government asked
to adopt a standardized approach to QR codes to support
wider adoption. Credit and debit cards are relatively rare
in India – the Reserve Bank of India estimated just over
26 million credit cards have been issued in the nation,
which has a population of nearly 1.3 billion. Government
officials said they hope to leapfrog the use of plastic credit
and debit cards and move directly to mobile payments.
13