Now is a really exciting time, for the cards and payments industry with a period of rapidly changing technology. The hot news at the moment is the development of smartphones and tablets that could also act as a payment card, in a sense.
The use of Near Field Communications or NFC, will allow proximity payment products to be offered on any enabled device – think contactless functionality, but in other objects, such as a phone or watch, let’s say.
The first thing that we think may happen is the increase in the amount of money that can be transacted, to more than £20. At the moment, the contactless amount limit is set to £20 or less. We also believe that the new technology coming onto the market will allow additional services, such as instant discounts and loyalty schemes, to be added around the basic payment service using newly-developed applications on the phone. With the ability to locate mobile smart phones, there are opportunities to offer services targeted to where the customer is in the world and also to provide greater security.
Just as the card is likely to disappear over time to be replaced by the mobile phone the same is true of point-of-sale acceptance devices (or terminals). There is a growing trend to use smart phones to accept card payments. Developments like Square in the USA, provide smaller businesses an opportunity to accept cards for the first time as they are cheaper than existing point of sale terminals. The industry is keen to progress these developments as long as there would be no compromise on the security levels that are offered currently. At the moment the banking industry is working with the mobile phone industry to develop secure applications and services to fit customers’ needs.
The shift away from using a physical card which has to be inserted into a terminal towards a multi-purpose payment application that can be used in a variety of channels is seen as a way of increasing the range of secure payments. We expect scheme specifications will go through a major review to ensure the next generation of card payment products is flexible enough to be adapted for new uses and build on the security features of the card.