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The Continuing Education of the Digital Wallet with Payment Technology

Soon, cashiers may ask, “Will that be cash, credit, or phone?” Close to 220,000 retailers and restaurants in the United States already accept Apple Pay and the Google Wallet program is riding its coattails.

Paying the NFC Way

The latest big buzz in payment technology is Apple Pay, while Google Wallet has been around for several years. Both use NFC, or near-field communication technology. Another contender is CurrentC, the progeny of a group of retailers including CVS, Rite Aid, Wal-Mart, and Best Buy, which uses QR (or Quick Read) technology.

Apple Pay – “Your Wallet. Without the Wallet.”

Once again, Apple innovation challenges tradition with new technology. According to Apple, paying for a purchase in a store requires only holding an iPhone near the business’s contactless reader while holding a finger on the touch ID without even turning on the phone. Inevitably, glitches occur, even with Apple products, but many find the app quite attractive.

Having everything in one place is convenient, but also presents a potential security nightmare. Apple’s security measures replace credit card accounts with a Device Account Number encrypted and stored on a secure chip within the phone. No one else ever sees actual credit card numbers. In the event of loss or theft, activating the “Find My iPhone” tool places the phone in “Lost Mode,” which suspends Apply Pay.

Google Wallet

Around since 2011, Google Wallet actually benefitted from the release publicity of Apple Pay. While Apply Pay only works with iPhones, Google Wallet works on both Android and iOS. Using Google Wallet requires downloading an app, creating a PIN, and entering credit and debit card numbers either manually or by taking a picture of the card. At the time of purchase, users must “awaken” their phone and hold it up to the NFC device to complete the purchase. Google wallet stores loyalty program points and gift cards as well.

Google Wallet relies upon secure servers for storing encrypted payment information. Moreover, except for needing to turn on the phone, it works about as simply as Apple Pay.

CurrentC – The Not Yet Ready for Prime Time Payer?

Another pay app entering the retail field is CurrentC. Unfortunately, some perceive it as a less-elegant take on Apple in the retail setting. CurrentC claims the app is pass code, pay code, and cloud protected. Merchants built this “commerce network.” Their consortium, MCX, seeks to bypass credit card fees by connecting directly with banks, drawing money directly from checking accounts using the Automated Clearing House (ACH) network.[1]

The general buzz about CurrentC is rather lackluster. Beyond that, while still in its Beta stage, hackers got into the system and accessed personal email addresses.[2] Perhaps with time, its functionality and popularity will improve, but as of now, CurrentC has few vocal proponents, has weathered some bad press, and requires additional steps compared to the other two options: Apple Pay and Google Wallet.

Mobile Point of Sale Impact on Business Owners

Accepting Apple Pay or Google Wallet requires Point of Sale NFC capabilities. For smaller and independent businesses, obtaining the equipment for accepting mobile payment options may entail an unwanted expense. Add to that the expense of training employees about yet another payment technique. Finally, pre-existing POS systems may require programming changes to accept mobile payment services.

The recent ruckus between Apple Pay and CurrentC caught many retailers in the middle. Some major retailers that are members of MCX disabled the NFC capabilities of their POS terminals, thus making it impossible to use Apple Pay or Google Wallet at their stores.[3] As a result, uncertainty pervades any considerations on mobile pay apps. No one is sure which app works best and will most likely thrive, leaving most in a waiting period.

 


[1] http://www.computerworld.com/article/2839499/ceo-tim-cook-calls-merchant….

[2] http://www.businessinsider.com/currentc-hacked-2014-10.

[3] http://www.computerworld.com/article/2839499/ceo-tim-cook-calls-merchants-refusal-to-accept-apple-pay-a-skirmish.html.

 

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