- Play catch up with other countries by adopting EMV
- Adopt mobile payments at the POS as well as online while transforming the store shopping experience
This blog was published in Finextra. After recent high profile data breaches in retailers such as Target, some have resorted to EMV at the POS for security. This blog analyzes the pros and cons in the alternatives for payment security in USA:
Various industries such as banking and financial services, consumer electronics, telecom carriers, and retailers are all seeking ways to capitalize on mobile shopping and mWallets that put the consumer’s wallet into their mobile phone itself. Mobile POS attempts to transform the shopping experience for the consumer through varying levels of transformation of the consumer’s shopping and checkout experience. One flavor of mobile POS promises to put the mWallet in the mobile phone itself and allow the phone to communicate to the POS terminal using NFC (Near Field Communications) in a secure manner. However, mobile POS is complicated due to several factors:
Alternate forms of mobile POS promise hosted mWallets where it is not necessary to store the valet in the phone and so there is no need to upgrade POS terminals with NFC. This is a big relief to everyone; however, such transactions can be subjected to higher interchange fees if they are considered to be of “CNP (Card Not Present) type. EMV (Europay, Mastercard, and Visa), a standard that is popular in Europe and has enhanced security features to prevent fraud in transactions is another distraction that is clouding the picture. Should merchants migrate to EMV compliant POS terminals or NFC compliant terminals or something else or nothing at all (if they leverage hosted wallet models to complete the checkout process)?
Although enabling technologies for mobile POS are mature and several field trials have been successful, multiple parties with interests that don’t necessarily match, multiple standards, and interchange fee related regulations and ROI challenges are but some of the reasons that will keep everyone guessing on the date when mobile POS will become real.
I am a Management Consultant in Banking and Financial Services. Check out my "home" and "about" pages for more details.