As Near Field Technology (NFC), a proximity-based system that allows customers, among other things, to pay for goods via apps on their smartphones, concerns regarding information security has been voiced. Users of NFC mobile payment programs such as Google Wallet and Sprint Nexus S 4G have indicated that they are uncertain whether the digital transfer of their sensitive information is safe from misuse. Premier credit card company Mastercard is confident it is able to face these very 21st century concerns. NFC Insight’s Ritesh Gupta recently caught up with Mastercard’s James Anderson, senior Vice President of Mobile and Vice Chairman of the NFC Forum to discuss Mastercard’s security credo.
The following are a few select passages from the ensuing conversation:
Consumers are increasingly adopting wireless data services, including contactless payments. Can you provide an insight into the latest trends when it comes to mobile contactless payments?
Retailers are hoping to improve the customer experience by accepting mobile payments which provide added convenience, security and ease of use. However, that also includes leveraging the innovations and technology in a smart phone, like location-based services, mobile apps and beyond to offer promotions and offers or even information on an account balance before a customer makes a purchase. That is something we consistently hear from our clients and partners – marrying the convenience of mobile payments with today’s mobile innovations.
Do you think still a lot of education is needed to convince the retail industry about the benefits of contactless payments. How do you assess the scenario today?
Yes and no. While there still is room for education amongst the entire ecosystem, we are already working with innovators like American Eagle, Walgreens and Subway who are stepping up to the plate and recognize the importance of and demand for mobile payments. As mentioned above, our recent survey confirmed that amongst US consumers, the appetite for mobile payments is already there. Specifically, 63% of respondents between 18 and 34 years old said they would be interested in making purchases with their mobile phones. Demand is there – but mobile payments must be easy, convenient and secure for consumers to use it every day.
Considering some of the key developments pertaining to mobile contactless payments in a market like the UK, how has the penetration of contactless payment technology changed the face of the industry? How do you assess the current sentiments in the US market?
It’s less a matter of whether the US will be receptive to mobile contactless payments but rather when it will take off. According to Gartner, the mobile payment market is expected to generate $86.1 billion worldwide in 2011. US consumers are already making purchases via the Internet on their mobile phones, and contactless will be an extension of that action. The UK has also been an exciting and innovative market – we helped Barclaycard and Orange launch Mobile PayPass there this summer and we are excited to see more programs coming along in the near future.
James Anderson is scheduled to speak at the forthcoming NFC Payments USA conference, to be held in Miami (November 2-3) this year