menu

Piers Fawkes: Will Pay-By-Phone Be An Albatross For The Banking Industry?

Piers Fawkes: Will Pay-By-Phone Be An Albatross For The Banking Industry?
Retail

The rush to adopt the technology seems to mirror the electronic industry's desire to force 3D TV on viewers.

Piers Fawkes, PSFK
  • 3 march 2012


I’ve noticed that Europe is witnessing a lot of acitivity when it comes to large financial organizations getting into the pay-by-phone space. Recently PSFK reported the launch of the Pingit service from Barclays Bank. The service would allow customers to send money to each other easily using their phones.

Now Telefonica-owned O2 is planning to launch in the next three months a mobile money transfer app to rival Barclays’ service. This service would be offered to all banks to use. Visa is also planning a partnership with Vodafone. The new mobile wallet service to allow mobile phone customers to pay for goods and services using their handset. It will be available across all 30 countries that Vodafone operates in, starting with the UK, Germany, the Netherlands, Spain and Turkey. No doubt US financial corporations are watching and learning. Google is already testing its NFC service with a handful of retailers.

When it comes to pay-by-phone (and especially tap-to-pay) systems, there’s a lot of rapid deployment going on around the technology but I’m not too sure the customer is ready for. It reminds me of the move in the last few years by electronic companies to develop and market 3D TVs – maybe years before people seem ready to own one (and that the majority of programming will be in the required format).

Like the 3D TV space, at PSFK we haven’t seen much experimentation at the fringes around phone payments. While Sony and the others rushed to create their new TVs, we noticed that the hacking community were more interested in the interaction between the viewer and the set. Gesture and now sonic-interface have been explored by researchers, start-ups and other creative minds. Evidence of hacking of 3D TV technology by influential groups like new media artists is very hard to find. Microsoft Kinect‘s popularity and success is a because the natural user interface system followed years of gesture experimentation on the fringes. For Microsoft, it was the right time and the right product.

The experimentation at the intersection of NFC, RFID and mobile phones still seems to be very much at the storytelling and information gathering stages of the purchase path. At a tap of a phone, systems explain a product’s background or they tell you where you can get it. There are not a lot of examples of hacking culture exploring tap-to-pay payments.

For me, tap-to-pay also has a number of other challenges: it seems like a big win for the banks but I don’t quite see the huge advantage for consumers. The benefits are lopsided. It’s not like credit cards are heavy to carry or difficult to use. Also, cards offer choice at every payment occasion. The pay by phone movement seems to be about restricting your choice – and that could be where it hinders adoption.

From what I have read, it seems to be that when we will have the opportunity to pay-by-phone we will only be able to charge to one bank (the bank the phone maker, software or network is associated with). What happens if the payment is a business expense or something that should go to you and your partner’s joint account? Do banks, networks and handset makers expect us to navigate a menu of options on our phone to find the right card? Surely just picking the right piece of plastic from your wallet would be quicker and simpler? Oh, it is.

Maybe banks and phone companies should not run away the user-friendly card format but look at the digital connection between them. Maybe cards cannot be used outside 5 feet of their owner’s phone. Maybe phones get pinged with loyalty point balances and other bonuses upon a swipe. Retailers and finance companies need to look at current behavior and adapt around it, rather than expect people to change because of their technology.

Retail
Trending

DIY Kit Lets You Build Your Own Wooden Bike, Boat Or Caravan

Design & Architecture
Culture Yesterday

Messaging Add-On Helps You Correct Your Friends’ Bad Grammar

An iMessage sticker pack will help you copyedit text messages

Automotive Yesterday

Mercedes-Benz Introduces A New Electric Mobility Brand

The separate entity aims to simplify the identification of Mercedes EV products to customers

Trending

Get PSFK's Related Report: Future of Automotive

See All
Mobile Yesterday

Tinder’s New Feature Makes Swiping A Group Effort

The dating app wants to democratize its gestural interaction by buying in to the social polling trend pervasive among millennials

Syndicated Yesterday

Autonomous Garbage Drone Prevents Trash From Reaching Deep Ocean

The solar-powered WasteShark collects refuse closer to the source: the harbor

Automotive Yesterday

Aston Martin Reveals Its Own Luxury Powerboat

The sleek AM37 echoes styling elements from the British brand's sports cars

Advertising Yesterday

An Escort Website Fights Violence Against Sex Workers

The advocacy campaign from McCann aims uncover the human toll of the exploitative industry

PSFK LABS REPORT

Future Of Automotive
Scenarios Driving The Digital Transformation Of An Industry
NEW

PSFK Op-Ed september 28, 2016

Energy Expert: How American Consumers Are Taking Control Of Their Power Use

Jennifer Tuohy, green tech expert at The Home Depot, discusses green home technologies and developments for renewable technologies in US homes

PSFK Labs september 29, 2016

The 10 Steps To Discover, Hire, Develop Your Next Leader

PSFK's Future of Work report outlines key steps in the employee development path to empower next-gen leaders

Culture Yesterday

LIFE Magazine Relaunches In Pure VR

The general interest periodical, which ceased publication in 2000, has turned into a portal for virtual reality content

Mobile Yesterday

Reorder This Detox Drink With A Simple Text Message

Dirty Lemon is streamlining its communication by letting customers place orders, ask product questions and request help exclusively through chat

Op-Ed Yesterday

The Future Of The American Workforce Requires Unbundling College Education

President of JetBlue Technology Ventures: developing corporate education programs for non-traditional students

Retail Yesterday

Gilt’s Pop-Up House Is The Kind Of Store You’ll Want To Live In

The New York City townhouse plays host to the latest in retail inspiration, curation, and lifestyle activation (and some libations, too)

PSFK LABS REPORT

Future Of Work
Cultivating The Next Generation Of Leaders
NEW

Mobile Yesterday

Registering To Vote Is Now Just A Text Away

A new bot aims to mobilize underrepresented groups this election season through SMS and Facebook Messenger

Africa Yesterday

Virtual Reality Game Gives Lessons About Emergency Birth Care

LIFE is a serious tool that takes advantage of new technology to help save lives

Luxury Yesterday

Shoe Repair Has Moved Onto Your Phone

Cobbler Concierge is an on-demand service to get your footwear fixed online

No search results found.