To guide us through this new resource, PYMNTS.com spoke to Amol Deshmukh, Gemalto’s vice president of mobile financial solutions, for his take on how merchants can navigate mobile payments technologies.
Cloud-Based Proximity Mobile Payments
Gemalto defines cloud-based mobile payments as a type of proximity payment that stores payment information on a remote server, rather than a mobile device. However, cloud-based mobile wallets aren’t just for mobile devices.
« Consumers can access their mobile wallets by using their mobile application, » Deshmukh told PYMNTS.com. « But because it’s [in the] cloud, they can access the payment application on their tablet as well. So, it’s not limited to mobile in this case. »
Deshmukh cited Merchant Customer Exchange (MCX), a mobile wallet collaboration between retail companies that uses Gemalto for its platform, as a key example of an up-and-coming cloud-based mobile payments provider. MCX executives have been outspoken about their reasons for choosing to offer a cloud-based mobile wallet, and have remained cautious of NFC payments.
MCX CEO Dekkers Davidson told PYMNTS Summer School attendees on August 12 that « initially our solution is primarily barcode and cloud-based, » and that the reason was so MCX could « get to market and begin to learn, not engage in conversation about which standard or technology will eventually win. »
Davidson said that he believes the market will eventually declare a winning technology, and that financial institutions (FIs) and merchants won’t be the deciding factor.
NFC Proximity Mobile Payments
For NFC proximity mobile payments, a personalized, contactless payment card is placed inside an NFC-enabled phone. Consumers then pay for purchases by holding their contactless card two-to-four inches away from a point of sale (POS) terminal.
This method stores data on a special chip inside a mobile device that protects consumers’ confidential data. Though early security issues may have shaped consumer sentiment, past Gemalto research has found that NFC is as secure as a traditional plastic card.
« [A key advantage] that we see with NFC payment applications that are offered by AmEx, MasterCard and Visa is that NFC gives a wide range of acceptance, and builds up credit card companies, » Deshmukh said in an interview.
He downplayed what merchants and industry observers consider the slow consumer adoption of NFC, saying that new technologies can « have a slow ramp-up. »
Gemalto’s white paper further discusses examples of NFC mobile payment options such as Google Wallet and Isis Mobile Wallet, and it details the histories of these platforms to date.
Mobile Wallet Adoption And EMV
Even with this information, some merchants are still hesitant to invest in POS terminals for mobile payments. Deshmukh believes this is largely due to the misinformation merchants have received about both NFC and cloud-based payments.
« Both NFC and cloud-based payments have secure elements, » Deshmukh said. « It’s up to us to make [consumers] really aware… they’re going to have a much more convenient, easy-to-use, rewarding, and at the end of the day more secure experience. »
To review the merchant and consumer advantages, and learn more about key operators in the mobile payments industry, read Gemalto’s new white paper in full here.
For Deshmukh’s take on how EMV and consumer smartphone habits will play a role in this transition, listen to our full podcast below.