US retail kingpins swoon: Nobody bonks like Google does
Ad giant will win the e-wallet war - survey
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US retailers reckon Google will end up dominating the pay-by-bonk/eWallet business, sidelining PayPal and bypassing operator-backed ISIS simply because the Google Wallet juggernaut is unstoppable.
More than half of the 225 retailers surveyed at the National Retail Federation's annual shindig reckon Google will inevitably dominate, with only a quarter backing PayPal and a measly 4 per cent believing ISIS can grab the crown - which is important as they (almost) all agree that there's only one crown to grab. Having a single dominant platform is apparently vital to electronic payments which US retailers see as more important, and more disruptive, than the EMV (Chip and PIN) systems they're supposed to be implementing.
The survey was done by payment-processing outfit ACI Worldwide, which discovered very little confidence in EMV compliance, with 56 per cent of the retailers reporting the industry was unprepared for the deadlines. Those failing to shift in time will end up taking on liability for fraudulent transactions, so there is plenty of incentive to get moving, not least because EMV works better the more widely it's supported.
Fraud rates in Europe have dived since the introduction of EMV. Greater use of the PIN does put its security at risk, but the chip is effectively impossible to copy, so the thief needs to lift the card too, unless the fraud is committed in a country without EMV. For backwards compatibility, EMV cards still have an easily copied magnetic strip, so a waiter in the UK can see the diner entering his PIN and surreptitiously swipe the stripe in order to make a copy, ship both things over to the USA and his confederate can take cash right from the bank machine, at least until America gets EMV too.
But American retailers are more interested in electronic wallets, and the brand recognition Google has attained as a first-mover in that market. ISIS has the backing of the network operators and uses a SIM-based secure element under operator control, but it has to step very carefully and has only rolled out services to a few markets. PayPal, meanwhile, uses technology based on barcodes, which feels clumsy in comparison - despite the fact that it works on a wide range of devices.
Less than 20 per cent of those polled thought there was room for a new entrant, though we suspect that number would have been bigger if Apple had been mentioned. Cupertino has a voucher scheme running on its iOS platform, but beyond a few patents it has shown little inclination to get into bonking - much to the surprise of the industry.
This is a long game, and one with big returns for the winner. Google Wallet got a lot of publicity by hurling itself into an undeveloped market, but the other players clearly reckon that slow and steady will win this race - whatever the US retailers think. ®
COMMENTS
Not optional
My neighbour did not realise she had NFC enabled on any of her cards - did not remember ever having been told.
Went into a shop and bought something about £25.00. Handed over her card, and without asking, touching or putting in a pin, the till printed out a slip for payment of £20, £5.00 to pay. She was most perturbed by this, as am I.
There was no "bonk" involved - the card just happened to pass near the machine.
The limit was supposed to be £15. I found it had gone up to £20, with no advice or discussion.
The bill was for £25, and so not valid for NFC. I had never heard that it can take a part payment.
I do not like NFC, I do not trust it, and I do not trust the banks, but there appears to be no way to avoid it. I have spoken to several banks with whom I have accounts, and they all say there is no choice - if you want a card, it WILL have NFC enabled, for whatever amount they say.
Re: The problem with NFC payments by phone in the US
The idea behind using your phone to 'bonk' is that it removes the need for a wallet entirely. In a (bank's) perfect world, NFC is everywhere, everyone owns an NFC enabled phone and cash is not required (therefore neither is your wallet). I don't necessarily agree, but this is the 'advantage' of NFC payments on a phone.
Also, if you have more than one card, bonking your wallet against a terminal isn't the best idea as you can't really be sure which card will be charged.
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