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forgive Sergey Brin his haircut. Android users will be able to use Google maps on their phones to find ATMs and stores where they can redeem special Visa offers. Visa has plans to enable mobile payments and is also testing person-to-person transfers where cardholders can transfer funds from one card to another using a mobile phone. It's a frightening thought – people creating text traffic by sending money they don't have to friends who have no money and can't pay their credit card bills. Bankers see huge opportunities in micropayments and microtransfers.
NFC vs Bluetooth
Contactless micropayments are becoming more common now in the United States. For example, in August, Taco Bueno, a U.S.-based Mexican fast food chain, adopted MasterCard PayPass at 161 locations in Arkansas, Texas, Indiana and six other states. The Smart Card alliance cites a MasterCard PayPass benchmark study that showed 71 percent of PayPass users use the NFC-based system for their primary card.
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Of course, there's no great opportunity that a good technology clash can't delay. |
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In the bar code world, a similar challenge was mostly overcome. Someone realized that if most phones have cameras, why not add software that can read a photo of a barcode to turn any camera phone into a barcode reader. Similarly, most mobile devices now have Bluetooth connectivity, while credit card companies are driving NFC. Bluetooth is a big disappointment. It's mainly used for wireless headsets. It was designed to do far more and appears to be a dead end. Reasons from better security to greater simplicity and more success and momentum would seem to make NFC the likely path.
Juniper Research says that the lack of NFC equipment will resolve itself in 5 years. Seven-hundred million mobile subscribers worldwide will have NFC technology in their phones. Fifty million such phones are already in service in Japan, but Juniper says more than 25 percent
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Micropayments are payments of $5 or less for every day purchases like snacks or coffee. We're closer to that hot cocoa now. RCR Wireless reported in August that small transactions, most of which are based in cash today, amount to $1.8 trillion per year. Devotees of the technology suggest that contactless payments represent an opportunity to run a much greater percentage of those small transactions through credit and debit networks.
Of course, there's no great opportunity that a good technology clash can't delay. Credit card companies and retailers are increasingly using near field communications (NFC) technologies to enable contactless payments. So far, NFC is a stand-alone technology. Users carry key fobs that are easily swiped in range of an NFC device instead of cards, but there are few handsets offered in the U.S. today that incorporate NFC. In other words, telecom's efforts are not aligned yet with where payment networks are headed.
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of shipments of them will head to North America in the next five years. Juniper also says the market for mobile payments and money transfers should be $600 billion globally by 2013.
Transactions with Integrity
OSS/BSS can play important roles in the micropayment and microtransfer worlds because of the need for transaction integrity and accounting. Transactions will involve complex fulfillment chains and authentication processes. They need to be recorded as they happen and synchronized with customers' accounts. Managing these accounting processes, and ensuring they can be audited independently, will be critical. Payment will be far more fluid and there will be more information to collect and verify - from identity and location to time of day and usage history.
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