Making Contact With Contactless Cards
While decoupled debit initiatives will potentially provide consumers with added convenience, other areas that serve to capitalize on the consumer convenience factor increasingly involve contactless payments, which came to the fore last year with the advent of products such as Chase's Blink card and the MasterCard PayPass. The technology employs Near Field Communications (NFC) technology so that all the user must do to pay is wave the payment device before a reader. However, contactless is by no means about a card anymore.
Texas Instruments' Pavey says contactless is a truly disruptive technology that will reshape the industry -- both figuratively and literally. For example, he notes, contactless devices can be integrated into a variety of form factors, such as mobile phones, key fobs and even pieces of jewelry. Issuers looking to differentiate themselves would do well to consider the form factor itself as one way of doing so, Pavey relates. "If you're no longer constrained by the mag stripe, there's a lot of potential in the payment device itself."
Jack Jania, VP and general manager for secure transactions with digital security solutions provider Gemalto (Amsterdam), agrees that the card is merely a transitional device. "The form factor will actually be more of a marketing device for issuers as a way to differentiate themselves," he comments. "There will be a convergence in technology. Things are evolving to a point where NFC technology on mobile phones will enable contactless payments in the near future."
Bill Kinnelly, SVP of marketing, e-commerce services, at Chantilly, Va.-based Online Resources, which provides Web-based financial services tools, sees the movement of payments onto the mobile phone as inevitable as well. However, "It's not the technology itself that's valuable. The value is in creating new business functions," he notes. After all, the form of the card may change, but there will always be an account behind it. "The card itself is just a physical manifestation of an account."