ITProPortal managed to grab a seat with Visa Europe's Jon White at Mobile World Congress 2014 (opens in new tab), to chat about the ways in which the payments market is being transformed by mobility.
"Mobile is at the heart of where payment is going," says White. Plain old cash is cumbersome and susceptible to fraud, and consumers want convenient ways in which to shop, while maintaining their trust in secure services. NFC, digital wallets and e-commerce are the solutions they are increasingly turning to.
Over recent weeks and months, Visa has worked alongside Orange and Vodafone, to help them launch their own financial services in partnership with banks. Orange Cash (opens in new tab) landed in France a couple of weeks ago, while Vodafone SmartPass is now live in Spain and Germany, and making its way to the UK in the very near future.
"We see ourselves as in the middle of an ecosystem," says White. "We're kind of the glue that brings together all of the financial providers, mobile operators, technology providers and device manufacturers in that space and we work across that entire ecosystem to put in place the technologies that ensure that there's a safe and secure means by which the customer can make payments."
White thinks that consumers are beginning to trust contactless technology more and more, which is spreading the technology's global reach. He tells me that over 80 million contactless devices (in the form of plastic cards and NFC-enabled handsets) were issued in the EU last year, and were used to complete more than €3 billion (£2.47 billion) worth of transactions. He expects these numbers to rise further, partly due to this increased level of trust.
"There's no higher incidence of fraud on contactless cards or mobile," says White. "In fact, it's the opposite. The fraud levels continue to fall and fall." However, the fact that there remains a £20 payment cap (in the UK) on contactless transactions suggests that banks are yet to place all of their faith in this solution. White informs me that this cap was originally established by retailers, banks and regulators, as a means to maintain consumer trust while still delivering a service. As consumers become more and more comfortable with this method of spending - and feel increasingly restrained by the limit - this cap will be reviewed.
To be able to make payments that exceed this barrier, consumers have to enter a PIN, a method that is facing its own issues. Passcodes have faced a backlash of late (opens in new tab), with many in the security arena branding them outdated and weak. However, while White concedes that there will be plenty of innovation in the authentication space, he says, "The PIN is something that the consumer is very familiar with and secure about. You'll probably see alternatives but I don't see the PIN going away very soon."
While there are now well over 100 different Visa-certified NFC smart gadgets on the market today, Apple's iDevices are notable absentees (opens in new tab). The Cupertino-based firm has, to date, refused to embrace NFC technology, much to the dismay of many of its customers. White assures me that this shortcoming can be overcome by applying a sticker containing an NFC tag to the back of any device. This can then work in conjunction with a payment app, such as SmartPass.
While White is pleased that most major smartphone and tablet manufacturers are becoming increasingly receptive to NFC, Apple's involvement could provide a massive boost for the technology. "I think all the banks would really welcome Apple moving into the payments space," says White. "To see NFC functionality in their devices would be fantastic."