Speaking at the Digital Services World Congress in London, Birch spoke about the mistakes made in the development of mobile payments to the point that the mobile payments industry is now grinding to a halt. Complex and expensive payment technologies that are hard to work with are being blamed for the struggle.
According the Birch the way to move forward is for the industry to simplify the existing mobile payment mechanisms by investing in best practice and increasing efforts to stay up to date with retailer technology.
Giving an outline of the problem as he sees it, Birch said that “secure elements in mobile handsets made it difficult to develop innovative payments programmes…not having access to a device’s secure access key is preventing developers from creating brilliant ideas for near-field communications (NFC) programmes.” He went on to add, “point of sale (POS) systems in the physical retail space have changed.”
It appears that there was a miscalculation in how merchants would respond to new technologies that came as a result of the mobile wallet and that the industry underestimated their actions. Retailers have in fact embraced new POS technologies onto the shop floor which has surprised the industry who thought it would be best to minimise the impact on merchants by working with their existing technology.
“Big merchants are saying that they are never going to order another POS terminal,” Birch said. “Merchants will be walking around with their own iPhones [to complete sales]. The girl with the iPhone has more functionality than she’d ever get with a POS terminal.”
Birch explained that one of the biggest projects for the payments industry was allowing TfL’s bus system to accept contactless card payments, and that by January 2014, the TfL open loop payment system will cover the whole of the TfL network.
“You can pay by tapping your Visa or Mastercard, but what you can’t do is walk into a shop in the UK and buy a single handset that will let you walk onto that bus and use NFC to pay,” he said.
Despite not having the mass market breakthrough the payment technology arena was aiming for, Birch was keen to get across the point that the lack of adoption wasn’t down to the consumer and that during early pilots, consumers were actively using Visa and TfL Oyster applications around London.
“They loved those things, the consumers were never the barrier,” he said.