Thales Blog

A Bridge To Mobile Payments

April 16, 2010

What’s it going to take to get contactless payments off the ground? Contactless card payments have been proving more of a slow burner than a big bang, and the introduction of mobile phones with embedded NFC capabilities that could be used for contactless payments has also been slow.

One of the issues with contactless card payments has been that retailers are not entirely convinced of what the advantages are for them. This is especially true in the States, where retailers can already offer ‘no signature required’ card payments, which simply require a swipe of the customer’s magstripe card through a reader. With ‘no signature required’ being as convenient to use as contactless, would contactless really generate considerable extra sales?

What retailers do buy into, however, is mobile. With such a high proportion of consumers now carrying their phones everywhere and using them for an ever increasing variety of tasks, mobile phone payments are something retailers can see customers are interested in, and it would therefore benefit the retailer too. But how many people you know own a phone with NFC capability? Therein lies the problem.

Some forecasts suggest that within the next two years all new mobile phones will be NFC enabled; but even if this ambitious forecast comes true, what about all the existing phones out there? A number of “bridging” technologies are coming to the fore as a means of closing the gap. Last month, Canadian company EnStream launched a trial of its new ZoomPass Tag; a device with the same capabilities and mechanics as a contactless card, but in the form of a sticker that attaches to your mobile phone. Discover have trialled similar technology. Special SIM and SD card devices are also available that can make an existing mobile phone NFC capable.

These devices seem like an excellent middle ground that could enable issuers to make mobile payments available without waiting for consumers to have NFC capable phones. Retailers would then have a reason to invest in contactless payment terminals. Perhaps these bridging technologies will provide the kick start that’s needed for contactless payments to really take off.