I think it is the future and it will probably not take 10-20 years to have it implemented but rather more like 2-5 years. The race to become the platform is more important than the legal issues surrounding it. Whoever wins in this race will hold so many chips that they will gladly pay any legal speeding ticket. The merchants will get on board quickly as it will increase sales. I don't think Visa and Amex will compete as they will benefit from the usage of their cards through the E-Wallet (remember they are still in the credit business loaning out liquid and will not become obsolete). If anything, the competition will be played out between the smartphone operating systems. Apple will be next to launch. Lets hope someone is smart enough to create an easy system at the store to support all smartphone devices. I smell a new business venture? Anyone?
The problem here is not implementation and smartphone support, but adoption by merchants. There're still shops that do not accept regular credit cards out there, and this is a new type of technology that they must somehow accomodate. So, yeah, 2-5 years to iron out the kinks, but about 10 to make it a real mainstream thing. And god help us if there will be competing standards.
Speaking of competing standards. I have this Visa "blink" card from Chase. The supermarket where I shop, has terminals that accept "blink". Guess how often can I use my card there? The thing works maybe once in ten times I actually am trying to pass my card over the sensor. It's just easier to swipe it in the first place.
The convenience of mobile payments will make visiting cash-only countries like Austria and Netherlands (credit cards work, but only in some places so you always have to carry cash) even more awkward. Suddenly you have to think where to put that weird "paper money", or "plastic money" when you're used to only carrying your phone.
I wonder how people used to M-Pesa cope when outside of Kenya and the other countries where it works.
American Express is largely a transaction company; they make a tidy income on their lending activities, but their largest source of revenue is the "discount revenue", the fees they charge merchants for accepting each transaction. Their card fees combined with other commissions are also, in aggregate, larger than their net lending income.
So I'm sure they are happy to jump into a system like this that facilitates using their systems for the transaction, but they will mightily resist anything that tries to replace them directly.
Comments
I think it is the future and it will probably not take 10-20 years to have it implemented but rather more like 2-5 years. The race to become the platform is more important than the legal issues surrounding it. Whoever wins in this race will hold so many chips that they will gladly pay any legal speeding ticket. The merchants will get on board quickly as it will increase sales. I don't think Visa and Amex will compete as they will benefit from the usage of their cards through the E-Wallet (remember they are still in the credit business loaning out liquid and will not become obsolete). If anything, the competition will be played out between the smartphone operating systems. Apple will be next to launch. Lets hope someone is smart enough to create an easy system at the store to support all smartphone devices. I smell a new business venture? Anyone?
The problem here is not implementation and smartphone support, but adoption by merchants. There're still shops that do not accept regular credit cards out there, and this is a new type of technology that they must somehow accomodate. So, yeah, 2-5 years to iron out the kinks, but about 10 to make it a real mainstream thing. And god help us if there will be competing standards.
Speaking of competing standards. I have this Visa "blink" card from Chase. The supermarket where I shop, has terminals that accept "blink". Guess how often can I use my card there? The thing works maybe once in ten times I actually am trying to pass my card over the sensor. It's just easier to swipe it in the first place.
The convenience of mobile payments will make visiting cash-only countries like Austria and Netherlands (credit cards work, but only in some places so you always have to carry cash) even more awkward. Suddenly you have to think where to put that weird "paper money", or "plastic money" when you're used to only carrying your phone.
I wonder how people used to M-Pesa cope when outside of Kenya and the other countries where it works.
What about just charging from phone to phone? Without a need for a terminal, would it make merchant adoption easier?
I have a visa contactless credit card (Paywave), and it works well. It's a tap, not a wave. Saves me time.
American Express is largely a transaction company; they make a tidy income on their lending activities, but their largest source of revenue is the "discount revenue", the fees they charge merchants for accepting each transaction. Their card fees combined with other commissions are also, in aggregate, larger than their net lending income.
http://about.americanexpress.com/ar/2010/financial_results.a...
Click on "Consolidated Financial Statements".
So I'm sure they are happy to jump into a system like this that facilitates using their systems for the transaction, but they will mightily resist anything that tries to replace them directly.