Visa recently reported that they believe the mobile payments industry will go mainstream within the next three years. While more development is necessary, the industry is definitely already quite strong, and still growing.
With the introduction of near-field technology on the forefront of the American economy more advanced payment systems still feel foreign. Of course, that doesn’t stop software developers from working on the next generation of virtual payment systems but experts and executives are slow to recognize the convergence, at least for now.
Bill Gajda, head of mobile for Visa, for example, comments that this type of system will not hit the mainstream U.S. market for at least another two years. He says,
We’re seeing momentum in 2013 but it’s really about commercial launches and scale.
The scale they are using, then, to gauge the success of the system is the 2012 Olympics in London. This is, actually, the perfect place to introduce their new concept as the international marketplace is already quite familiar with alternative payments systems like near-field communication (aka: NFC technology) and, more recently, virtual wallets.
In order to get a good read on the global reaction to the implementation of mobile wallet technology, Visa set up 140,000 payment terminals near the London games. Each of these terminals is equipped with near-field communication (NFC) chips that allow for convenient and simplified tap-and-pay processing. Of the 140,000 terminals, about a third were installed in London taxi cabs and about one-quarter were installed as point-of-sale terminals in and around the Olympics.
In addition to this, Visa is even distributing a few thousand Olympic-edition Samsung Galaxy SIII mobile devices to Olympic VIPs for the purposes of testing. Unveiling some of these concepts at the London Olympics is a great idea. The United Kingdom is already leaps and bounds ahead of the United States in terms of alternative payment methods, despite the more than doubling in growth of NFC-enabled terminals in the U.S. over the last three quarters.
All of this is exciting, obviously, and while the experience might prove to be enjoyable to athletes who might not have been able to appreciate technology because of their rigorous training schedules, Gajda expresses that there are still many obstacles standing in the way of widespread development. At the front of these challenges lie consumers themselves, as they create their own habits and comfort levels with devices and technology, which makes it very difficult for developers to anticipate which features will work and which will be tossed aside. This affects not only functionality but also marketing and the rate of development.
A prime example of this is Google Wallet. This product, developed and released by one of the largest and most innovative technology companies in the world, has been around for a year and has only received moderate acceptance. Similarly, the mobile telecommunications-backed Isis (supported by AT&T, Verizon, and T-Mobile) is only now coming to market, so consumer response is yet to be determined. Still, NFC technology is on a slow take in terms of mobile devices, with only a few Android-powered devices and Blackberrys available with the service.
Gadja follows up his comment on momentum with a succinct and honest understanding of the importance of consumer input:
When it works, we get a lot of positive feedback, but there’s still more work that needs to be done.
Visa knows that they are on the way to what could be the next big thing in the financial market but they also know that they have a commitment to serving their customers as well as those that will benefit from this progress in the future.
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