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ChapterTitleEducation

Will tap-on-phone bring an device upgrades, while acquirers
have been reluctant to leave classic
end to dedicated payment solutions behind for fear of losing
customers who wish to stick with the
tried-and-true. Here, we’re still grap-
hardware? pling with the transition to chip-and-
PIN EMV payments, a full decade
behind the U.K. and even further be-
By Martin Herlinghaus hind other countries. Similarly, while
AEVI we’ve flirted, sometime aggressively,
with contactless payments, our ac-
he world of payments has come a long way in a relatively short space quirers, issuers and merchants have
of time, with cash becoming a rare sight for many merchants. But just never seemed to be on the same
our industry still lags far behind others in innovation. As acquirers page at the same time.
T and service providers seek to broaden their horizons and compete
with rivals for the business of merchants, it’s important to realize that payment But acquirers, issuers and merchants
technology is accelerating rapidly and to adapt to disruptive changes that are are waking up to a new dynamic,
coming. Those smartphones most of us carry have data storage and process- that of consumer demand for expe-
ing capacity that rivals or exceeds most common laptops, but they can’t easily riences that rival what they can find
accept card payments. Merchants and acquirers are still largely dependent on online. Part of creating a new in-store
dedicated payment hardware to complete purchase transactions. physical experience involves making
payment even easier; contactless, or
A new dynamic tap-and-pay, is an essential part of
the equation.
The payments industry in the United States has long been constrained by a
Catch-22: merchants have been resistant to investing in the "latest, greatest" Contactless on the rise
Both Visa and Mastercard are mov-
ing this year to require all new card
terminals to accept contactless pay-
ments. This signals a clear impetus
REIMAGINE THE ART OF USAEPAY.COM to move into the future. Up to this
point, mobile payments have been
TRANSACTION fairly clunky. With inconsistent
adoption of contactless on the mer-
E-COMMERCE
MOBILEOBILE
RETAIL
M
chant countertop, few cardholders
have the incentive to move beyond
the traditional card swipe or dip to
the new world of presenting their
smartphone to complete a purchase.
But consumer use of contactless is
trending upward as most smart-
phone providers now include near
field communication (NFC) contact-
less technology in their devices and,
increasingly, in accessories such as
smart watches. As consumers look to
add virtual card capabilities to their
smartphones, they’ll expect their
merchants to quickly adapt. Those
who don’t adapt will do so at their
own risk because, as many large U.S.
retailers are finding, consumer loy-
alty is extremely fleeting.

Off-the-shelf competition
Device manufacturers are taking no-
tice and have begun reviving mobile-
to-mobile payments solutions. In fits
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