Wave Your Phone – Make a Payment. PayWave is NOT the future of mobile payments

September 11, 2013

in Accelerating Innovation, IoT Internet of Things, Mobility, Smart Retail

Visa PayWaveHow does the phone become a smart wallet? The following description doesn’t appear to make life simpler. Seen referred to down under in New Zealand which has an advanced banking system and the small market means they can test some things other can’t. Still I read this description and thought….I’m not excited.

To make a purchase, open the app, touch the big button on the screen, place the phone on the tap-and-go terminal, wait a moment, remove the phone and touch the big button again. A PIN for the “virtual credit card” is selected when setting up the system and this must be used for transactions over $80. A separate PIN, for the application, can be used with smaller purchases if the user chooses to set it up this way. Have phone, can shop – NZ Herald News.

The solution being launched in New Zealand is led by Visa, Vodafone and three banks and will require a special SIM card and NFC capable phone with App installed. Using the SIM provides a different security system and keeps the payment solution away from the arch enemies Google and Apple.  Note Visa PayWave is here in the US too. It just doesn’t seem to be getting a lot of traction.

 paywave“Visa is absolutely key to this overall solution because they provide the payWave technology which enables all of the transaction processing around us,” says Vodafone consumer director Matt Williams. “They are our key partners along with the BNZ and it’s three of us, as a mobile operator, a transaction provider and a bank that make the system work.” via Vodafone introduces SmartPass app – Story – Technology – 3 News.

I count at least five steps in the transaction description above (maybe more with Pin entry). Touching phone in tap and go? (Just a wave.)  There’s also setup steps. These systems just don’t feel like the future of payments to me. Too many steps and nothing really new in the payee experience. So far these systems all appear to be about how to put the credit card into the phone and then make the phone a simple wave to pay. It’s really time to stand back and think about how service, cash registers and online payments are changing.

1. At the Register: The most common register we’ve seen for years is big and ugly usually with a bar scanner and a screen which the customer can see what is being rung up. Often the payment stuff – card swipe etc is separate – bolted on. Perhaps more recently you been served in an Apple store or Nordstoms or a coffee shop with someone using an iPod or an iPad. They are convenient, they put the register wherever the customer is and can change the service experience for the better and worse. Why worse. Well I can’t see what is being rung up anymore. (Note the PayWave approach is sticking to the more traditional POS devices.)

2. Where’s the wallet? Traditionally in a back pocket or purse. Pull out the cash or the credit card. Importantly, after the clerk had rung up the sale total. So the big question here is. Why in a register situation are we waiting for the customer to take out their wallet  when half of them waiting in the supermarket line already have their phones out doing mail, messages and games? When that big register is replaced by a small iPod or iPad couldn’t the “customer screen” be my phone? Then there is the self-serve, self-checkout where this is already effectively the case. So why aren’t all these new payment solutions “getting the future wallet” the phone out of my pocket at the beginning of the transaction? (PayWave is also not helping me with my receipt, it’s a total I approve.)

3. My Phone: Once my phone becomes my window into the checkout/payment process (or even ordering process as I’ve written before) what other options can the store, retailer, etc. add to my experience? While I may not want promotions, this remains an opportunity for adding to the experience. What we need is a story, a way of keeping the line engaged in the experience rather than opting out, or feeling like they are just waiting for service. I’m fairly convinced that when customer and seller own the experience together rather than the seller processing the customers money enjoyment will go up. I could push my order outside Peet’s from the parking lot and just go in and pick it up. That’s a better service not just a faster swipe of the credit card.

4. It’s mobile. Yes we see the mobile wireless visa card swiping things. They are even more important now when so often the waiter requires a pin so the bill can be paid. So really why do we need a separate machine for this. Aren’t we reaching a point where most waiters come to work with a smartphone. Can’t they just log in to their employers cloud and start ringing up the sales that way? Mobile is set to eat these old terminals. How long can they hold on?

At the end of the day the banks, and the telco want to stay the middleman. Whereas what’s required is a payments system that directly links buyer and seller and works more like cash and a receipt. It should open the window for ordering and speed pickup. I also want a payment system that is more “social”, more shared, more relationship bound. I also want it to be easier to use.

Each time I see an update on NFC, Banks, Visa, and Telecoms I think about two things. These aren’t our favorite organizations and they aren’t known for their customer service or value for money. I suspect many would like to see them disrupted?


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