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The Green Sheet Online Edition

August 26, 2013 • Issue 13:08:02

The Mobile Buzz:
Interoperability, security issues dog mobile payments

The U.K.-based media outlet and event planner M for Mobile published an infographic that detailed opportunities ahead for mobile payment providers. It is forecasted that the mobile payments industry will account for $1 trillion by 2015.

In the U.K., in-store mobile wallet-based payments account for 0.1 billion pounds, according to the infographic. That number is expected to reach 45 billion pounds by 2017. The retail sector has the biggest potential for growth, with retail spending via mobile payments expected to grow by 22 percent in the next two years.

Yet, even if it is agreed that mobile payments have a bright future, the question remains: how will the industry get there? According to Terry Dooley, Senior Vice President and Chief Information Officer at debit card network Shazam, major issues must be addressed before mobile payments can succeed.

When interviewed recently by Jonathan Blum for the Jumio Influencer Series at the 2013 CNP Expo, Dooley said the chief hurdles to widespread mobile payment adoption remain interoperability and security. (To watch a video of the interview, visit The Green Sheet's Video Library at www.greensheet.com/video.php?flag=displayVideo&id=12.)


Dooley explained that mobile payments lack the interoperability of traditional payments. Consumers can enter stores and pay with bankcards without a second thought, he said. But the infrastructure for mobile payments is not at that level. Dooley said consumers can't use any single mobile application at all stores. "There's a lot of 'what ifs' involved in mobile applications today," he said.

Customer convenience goes hand-in-hand with interoperability. But mobile payment providers have not yet figured out how to make the mobile payment experience as easy as taking out a credit card at the register.

"When the consumer walks into the store to make a payment, the last thing that you want to have happen is that consumer standing there at the checkout line signing into an application, trying to bring up that application to make a payment," Dooley said. "You want that consumer to walk up, swipe his card, insert his chip and PIN card, use his mobile application - but you want that to happen within seconds."


Mobile payments are also a new frontier when it comes to security. It may not be so easy for mobile startups to scale their businesses by enrolling consumers via mobile apps. Dooley said, "You're going out to the 300 million consumers in the U.S. and saying, 'Give me your credentials, your bank credentials, and I'm going to store that securely for you so I can do something at a bank.'

"That's a challenge. Some people will buy into it. Some people won't buy into it. And you'll see a massive difference in generation gaps from an acceptance [standpoint]."

Dooley believes younger consumers will be more willing to adopt mobile payments because they don't have the same security concerns as do older consumers. "One of the reasons consumers are comfortable using [debit] is because they have protection," Dooley said. "If you have fraud happen on your card today, are you liable? No."

But the same cannot be said for mobile payments. Dooley said, "If you go make a purchase, and you're defrauded, and you go back to a startup company and say, 'I used your application and now I'm experiencing fraud,' are they going to stand behind that? That's a key question." end of article

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