[early2bed]

Nobody is saying that mobile payments are going to completely replace other forms of payment. However, there has been a pretty significant change in the amount of cash that I use over the past 10 years or so to the point where my visits to the ATM have gone down about 80%. In fact, I think I'm going to finally take all my accumulated spare change this weekend to the grocery store and dump it in the machine and get Amazon credits. I probably have enough to completely take care of this years Christmas shopping.

I'm betting that my use of physical credit cards will go down similarly over the next 5 years.

[asherN]

I only tried this earlier this year. It worked at security(!) and the gate. Unfortunately, not all airports have the QR code reader at security, so a printed boarding pass is necessary.

I never had to carry a paper as well, but the scanning was iffy. Contrast and light reflection being the main culprits.

It seems like everyone is talking about how revolutionary it'll be to just tap to pay and not have to carry credit cards around anymore. Well, until NFC is everywhere, just like QR code readers at airports, you can't count on it being available. At the store, you'll just leave empty handed. At the airport, you have to backtrack and potentially have to wait in a long line if automated boarding pass kiosks aren't available.

In Canada, the overwhelming majority of CC terminals are NFC enabled. So are CC. We went Chip-and-PIN first and people got used to it. Then as terminals were getting upgraded, NFC became almost universal. it was a novelty at first, but now, A lot of people try to tap first. It does not always work because the security measures built-in to the tap system. It's $$ amount at the merchant. Then it's total $$$ in consecutive taps and/or # taps before you must reset using chip-and-pin.

[TheScionicMan]

In fact, I think I'm going to finally take all my accumulated spare change this weekend to the grocery store and dump it in the machine and get Amazon credits.

Check with your bank first. Most will do it for free instead of the percentage the machine at the grocery store will charge you.

[cbvinh]

I never had to carry a paper as well, but the scanning was iffy. Contrast and light reflection being the main culprits.

Is there a trick for airports in places like India I'm not aware of? Just to get into the airport required paperwork...

[cbvinh]

Don't think so. They wouldn't accept you showing the electronic boarding pass on your mobile phone?

Security in India is an odd duck. They want to see paperwork, but don't seem too overly concerned over what the paperwork actually says... It's the paperwork that's important.

[early2bed]

Here's an editorial from a representative of retailers that appeared in the WSJ about their problem with Apple Pay. Their main issue is swipe fees charged by credit card companies. Their desire is to use technology to get away from them - by getting the funds directly from your bank account. It's not all bad for consumers - they will probably offer incentives to get you to use their system.

The Worm in Apple Pay
The ballyhooed new payment system is still reliant on your having a credit card. That�s not exactly revolutionary.
By LYLE BECKWITH
Nov. 3, 2014 7:05 p.m. ET

No company can compete with Apple when it comes to releasing new products, and last month the tech giant brought some attention and excitement to how we pay for things with the introduction of Apple Pay. That�s a good thing, as the payments system is an often-overlooked but crucial part of the economy and how it functions.

For years professionals have looked for ways to put payments systems on mobile phones, with limited success. Apple made it happen, and now the technology allows you to make purchases in stores and on apps without credit cards or a wallet, by simply swiping your finger on your iPhone. The company also built in some nice security features by including, for example, fingerprint-recognition technology. Mobile payments are convenient for consumers and are more secure than credit cards, both wins for everyone.

But Apple fell short of revolutionary change�because it built its product on the flawed credit-card payment system. Apple Pay works by linking existing credit- or debit-card accounts to mobile phones. Those accounts use an antiquated system dominated by two giants� Visa and MasterCard �that set �swipe fees� that merchants must pay every time a customer pays with a card.

Absent real competition, the swipe fees continue to grow. The average U.S. swipe fee of 2% is the highest of any industrialized country, and the U.S. spends more on swipe fees�more than $50 billion a year�than the rest of the world combined, according to the payment industry news source the Nilson Report.

The fees, which have tripled over the past decade, are the second-highest operating expense for merchants. Convenience stores paid $11 billion in fees last year, according to a recent report by the National Association of Convenience Stores, where I work. The fees often exceed the profits made by grocers and others that operate on narrow profit margins�so the fees are passed onto consumers in the form of higher prices.

All of this has led to multiple Justice Department and state attorney general enforcement actions, many private antitrust suits and frenzied legislative battles. The Justice Department filed an antitrust suit against Visa and MasterCard in 1998, alleging that the two had adopted exclusionary rules to make it difficult for banks to do business with other credit-card networks. Justice won in 2001. Private plaintiffs sued for similar reasons and settled with the companies for a record $3 billion in 2003. Such efforts are not over.

Apple�s innovation resembles that of a company called Pay By Touch. Several years ago, Pay By Touch came up with technology that allowed shoppers to pay in stores by touching a pad at checkout. The technology used fingerprints and was installed in several grocery stores. Like Apple Pay, the Pay By Touch model connected existing payment cards to finance the transactions. It was innovative technology and meant you could leave your purse at home and still buy what you needed.

What happened? Pay By Touch went out of business in 2008 because it didn�t give merchants a reason to use the technology and didn�t offer consumers value beyond leaving their wallets in the car. It didn�t change the fundamental problems with the payment system.

Apple�s technology is better. With Pay By Touch, merchants had to buy a finger-print reader, whereas Apple already has that function inside a phone. But that�s not enough. The fundamental point of payment technology is to make transactions more efficient and cheaper. Indeed, that�s the reason people invented money�to make it cheaper and easier to pay for things. Any payment innovation must at least do that to be worthwhile.

Credit and debit cards are undercutting the purpose of payments by making them expensive. Cash is cheaper than electronic payments because of the inflated, price-fixed fees the card companies foist on merchants. Electronic payments ought to be cheaper than cash, though they won�t be if they are built entirely on the system that�s propping up Visa and MasterCard. There is room for mobile payments to be the cheapest, most secure and most innovative payment technology on the market.

This will require real change. A mobile-payments system could link directly to an individual�s checking account, or transactions could be completed over the Internet, for example. A payments system could even connect directly to a mobile-phone bill. But mobile-payments providers need to be willing to jettison the baggage of price-fixed payment cards. That would be a real revolution in the payments system.

Mr. Beckwith is the senior vice president of government relations for the National Association of Convenience Stores.

[sfor13thlegion]

And interesting to see how some big name banks fall into line with Apple.

Can't wait till the SHTF

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[sfor13thlegion]

Reading about all this makes me yearn for the long lost days of old when it was cash on the barrel head

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[eyesopen1111]

Cash is the best! But I wonder what fees the merchants have to pay when buyers use debit cards instead of credit cards? Apple Pay allows the use of debit cards, so maybe that'll help the smaller businesses.

As for the big retailers, like the ones mentioned in the OP article, they don't need any help--they're already making billions and they're still whining for more...

Z-30 / STA100-5 / 10.3.0.1418 / T-Mobile USA

[early2bed]

I'm giving up cash as soon as I can:

1. No trips to the ATM
2. Don't have to deal with spare change
3. Much easier tracking of expenses, business or otherwise.
4. Easier and more exact tipping.
5. Less exchange of bacteria, virusues, or God knows what else is on that cash.

[xandermac]

It's not all bad for consumers

If they can come up with a system that bypasses swipe fees, doesn't require me to give them all this personal financial info, doesn't keep my data "securely in the cloud" and doesn't track my every move, then i'll give it a look, but CurrentC isn't that.

Right now Apple Pay is secure and doesn't store any of my info anywhere and isn't tracking me for retailers. Even my card number isn't stored on the phone, just a token in the secure area chip.

[early2bed]

There are plenty of people who are willing to exchange all sorts of personal information, financial or otherwise, for some kind of value. Look how many use Gmail or other Google services. If CurrentC offers rewards for signing up then it will probably have some success with consumers. If banks want to keep people using their credit cards with mobile payments then they will also offer their own rewards.

The problem that I have with CurrentC is that there is no buffer between the retailer and my bank account. If something is erroneously charged to my credit card account I all have to do is call my bank and they immediately credit my account and send me a new card. I have other cards I can use. If something happens with CurrentC and funds get withdrawn I'll bet it's not that easy to get them to put money back in your account. Moreover, what's to keep it from happening again?

Anyway, does anyone know what BlackBerry's mobile payment strategy is? Here's what John Chen said in the BNN interview:

"You know there was a lot of noise on Apple Pay...and people may not...bad on us for not doing a good enough job...we've been doing mobile payment infrastructure for a long time...and EnStream for example in Canada...some people want to get rid of their wallets, not all people...there are old folks like myself that are more comfortable paying some cash...it's transaction based...we are the infrastructure that clears these transactions between the telephone companies, the merchants, as well as the banks and we will get a cut of the transactions as these become more viral.

It sounds like he saying that as these transactions become more popular, Blackberry will eventually participate in them more. It also sounds like he's not convinced that mobile payments are that compelling to their target user. That probably means they will be doing this later rather than sooner and signing on to whatever mobile payment systems are developed. The risk is that as a small player in the platform wars they may be locked out if they can't support Apple Pay, Google Wallet, or whatever Microsoft develops for Windows Phone.

[southlander]

Scanning a QR code on the POS display and then scanning a QR code on the phone, lol.

I used electronic boarding passes when they first came out. The difficulties the gate agents have scanning the phone slows down the line.

Again, unless those merchants say "CurrentC or cash only", how is that going to hurt Visa? I can still use my CC. Only I no longer have the convenience of using tap to pay. Brilliant.

The retail systems I set up are set to give the customer a 2% discount for using cash. So while the merchant does not get out of losing 2% (cost to process a credit card), they are promoting the use of non credit card tenders in their stores. It works very well. Customers bring cash in order to get the discounts. However clunky to use, so long as it works, if CurrentC were to offer part of the savings to the merchant back to the customer, that would be an attractive option.

[tuxedo323]

Nothing wrong with that. However, I was hoping to eventually move to a more secure method where I'm not handing my credit card to people all day or using the actual credit card number online. Once a year or so my card gets compromised and I end up having to dispute some charges and change my numbers.

I will be getting a new Amazon Rewards card that I plan to exclusively use with Apple Pay as much as possible and not even carry it around nor enter the number in online. I'm sure it will be years before I stop using physical credit cards.

That would indeed be great. But until I'm thoroughly convinced the secure enclave is indeed secure, and the fingerprint hashtag algorithm can't be reverse engineered, I'll suck up spending the extra 30 seconds to whip out a credit card.
While can always be issued a new CC number and easily dispute fraudulent charges, what you can't be reissued is another fingerprint or other biometric identifiers. Once the beta users of this tech on a large scale proves successful, I may consider it.

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[tuxedo323]

That would indeed be great. But until I'm thoroughly convinced the secure enclave is indeed secure, and the fingerprint hashtag algorithm can't be reverse engineered, I'll suck up spending the extra 30 seconds to whip out a credit card.
While someone can always be issued a new CC number and easily dispute fraudulent charges, you can't be reissued another fingerprint or other biometric identifiers. Once the beta users of this tech on a large scale proves successful, I may consider it.

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