Contactless payment – direct from your phone

The mobile payment market is developing fast with Vodafone now taking a great leap forward in Europe that could become a game-changer.

Previously, customers using the Vodafone Wallet have had to charge up an app in advance, so they can use stored cash that has already been transferred for use by the app. Vodafone has recently announced that thanks to work they have undertaken with Visa and the payments service Carta Worldwide, their customers will be able to link their bank card details to their SIM allowing near-field communication (NFC) payments to be made using the phone as if it was a bank card.

What is really important to note here is that customers have been pushing for developments like this in the market and now they are starting to get what they want. Finding a bank when you need cash is a problem we have all faced and using a card to make small payments is time-consuming and sometimes not even offered by shops. By integrating payment into a device that almost everyone carries – the phone – these NFC payments will be easier than ever.

However, I am sure that security concerns will still be the one area that might slow down the adoption of this technology. At present contactless payments are accepted for payments under £20. If I lost my contactless card then someone could go around making purchases so long as they are under £20 – until I managed to cancel the card.

The Vodafone service does seem to have several layers of security with the use of a PIN and ‘Verified by Visa’ password for higher value items. However the ability to make payments will be built into the phone and phones are often targeted for theft – which is no surprise when you look at the handset values of high-end devices such as the new iPhone.

I am convinced that this is the right direction for the telecoms and payment companies to be moving, but I’d be interested to understand how they think that consumers can be reassured. There is quite a psychological shift from cash to card to payment by phone and I think this might take some time to take every customer on that journey.

What is your view on payments made directly from your phone? Leave a comment here or tweet me on @simondillsworth.

Visa

 

Photo by Raúl Hernández González licensed under Creative Commons

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