To say there is a lot going on in the area of payments is probably an understatement, with new technical features and partnerships opening doors for more convenient ways to pay. The way we shop online has changed dramatically in recent years and this revolution is spreading rapidly to physical environments such as stores, cafes and public transportation.
Traditional card companies such as Visa and MasterCard are rolling out their new generation of cards equipped with NFC (near-field communication) chips. It’s likely that you have one in your wallet already; if not, expect to get one soon. Banks such as ICA Banken and Handelsbanken in Sweden, Norway’s DNB, OP-Pankki and S-Pankki in Finland, and Nordea are making them available to their customers right now. The key here is combining legacy and new infrastructure where NFC-enabled payment terminals play an important part. The NFC chip provides a quick way to confirm a purchase as well as being a unique token or ID to identify you. A more flexible way to manage security – where smaller payments no longer require a PIN in the terminal, relying instead on identification in the NFC chip – is proving to be a game changer.
Visa has also joined forces with Google and Apple for their Android Pay and Apple Pay services, built on the Visa platform. You simply connect your card to the payment app, and your phone – or another wearable device – emulates the Visa card, which can be safely left at home. No card details are stored on the phone and no actual card details will be revealed to the merchant in the transaction. As a nice feature, extra security is added by utilising the fingerprint reader which is increasingly common on phones. A purchase can be confirmed in one go by activating your phone (no need to open an app) and pressing your finger to the reader while holding it close to the payment terminal. It’s that simple.
Trust is a vital element in all this: to feel comfortable, the consumer needs to trust that the payment service is not only quick but also provides the desired level of security. Requirements can vary depending on factors such as location, value and type of product. Too much speed and convenience could possibly offer an opportunity for thieves and fraudsters. So there needs to be a middle way, combining convenience with control, simplicity with security.
The speed, security and simplicity of NFC transactions are ideal for settings where guests make frequent purchases but might not want carry a wallet or phone. Amusement and water parks are obvious examples, where payment is an important part of the customer experience, but often becomes a bottleneck. In such high-throughput environments, the time taken for payments can lead to frustration. The equation is pretty simple: slow payments + long queues = less fun and less spending.
If only there was a smarter, safer, simpler, faster way to pay …
Business Developer Arvato Sweden