When we examine mobile payments in popular media outlets, the questions they keep posing are focused around which is the better solution for mobile payments: Apple Pay, Samsung Pay, or Android Pay. The problem with that is that neither is answer – not because those schemes aren’t worthy. Instead, the problem may lie with the question. The reality is that we are effectively asking which color or brand of leather wallet is the right mobile payments solutions.

Why? Because all of them are mere holders of the payment type. The card being used, whether physical or virtual, is still the traditional credit or debit card. The landscape has not changed substantially enough to enable an alternative. The pricing is no different on the issuing side; the merchant pays for the convenience of enabling that transaction for a debatable value difference.

My hope is that one of two things will happen (why not both?). First, I think differentiated interchange pricing is necessary. Much like the historical progress in the payments industry, the merchants are the ones investing in new terminals and technology. The Issuers need to acknowledge this and mitigate it through reduced interchange – possibly as an acknowledgement for the likelihood of reduced fraud into the system due to the single use card number and biometric verification.

Second, the technology may enable true substitute competitors in the mass market payment system for the first time since the debit card. That could be from a merchant consortium, a new startup, or an established player. But the new technology platform that Apple Pay, et. al. have enabled may finally usher in new blood, and new velocity in the payments industry.

So, who’s ready?


[Image courtesy of Shinya Suzuki  / CC BY]
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