I’ve seen the future of contactless payments, it’s not NFC and it works

Originally published on Billing Views.

When people talk about contactless payments they usually mean contactless EMV (Europay, MasterCard, Visa) card payments or NFC (near field communication) payments using a mobile device. Contactless card payments have been in the news recently amid reports of double charging or the wrong card being charged. I have enough trouble getting the correct card to read so am not surprised that these problems have been comprehensively debunked by industry experts like Dave Birch.

However contactless payment using a mobile device is not just about NFC. The best contactless payment applications I’ve experienced have not used NFC but have been designed to improve the transaction experience within a specific retailer. Starbucks has combined loyalty with payment in an application that makes mobile payment simple. Combine it with Apple’s iPhone Passbook app and you don’t even have to unlock your phone to pay.

However for me, the killer contactless app is the Apple Store EasyPay app. I can take items off the shelf, scan them and walk out without ever speaking to a store representative. The power of those 575 million cards that Apple has stored against Apple/iTunes accounts becomes very apparent. Minimal payments friction and no queuing. Any downside? Perhaps it makes it too easy to spend! Installing the iOS 7 beta on my iPod Touch (having an Apple developer in my immediate family has its benefits!) and seeing the appearance of iCloud Keychain with its ability to store card details, points to the next stage of Apple creating a payments capability in its handsets. Combine EasyPay with iCloud Keychain and you have a digital wallet in your handset. All you need then is more places to use it! As the payment process is as simple as scanning a barcode, the impact on in-store point of sale hardware is zero and Apple can supply the transaction data to the retailer in the background. It would certainly explain Apple’s apparent lack of interest in NFC. The next year will be interesting …

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