Payment landscape prepares for change; By 2017, more than half of Canadas smartphones will have tap-and-pay technology Toronto Star You may have seen him walking along Queen Street in Toronto. Hes the one talking to space-age glasses on his face. Theyre called Google Glass, and Tom Emrich - one of about a dozen people in Canada with a pair - couldnt be more jazzed about their potential. It represents the future when I put it on, he says. I still cant believe this thing works in 2013; it just seems too soon, but there it is. Technology is his life. As a boy, Emrich would watch his father crash computers and put them back together again - just for fun. When it comes to being on the cusp of things, Im hooked, says the Toronto-based tech consultant and writer. As new technology begins to change the payment landscape in Canada, Emrich is watching developments closely. Imagine walking into a store, for example, and paying for an item with a necklace or a watch. Emrich says this scenario is in the not-too-distant future. Smartphone payments are already here, he points out. It only makes sense for industry leaders to start thinking about connected payments. Smartwatches now allow notifications to pop up on your wrist. In theory, they too could be used to facilitate a payment. I love seeing how new technology trickles into the masses and changes our everyday lives. But Im interested in knowing how everybody else will accept it, because I know Im not the average Joe, he says. Approximately half of all Canadians have used their smartphones to make some form of purchase, says Christie Christelis, president of Technology Strategies International Inc., an industry research firm. They are transferring funds, paying bills and buying lattes (through the Starbucks app) all with their phones. Furthermore, we are taking steps toward contactless payments, meaning tapping instead of swiping or inserting a chip to make a purchase. Interac Flash, MasterCard PayPass or Visa payWave - all card-based - use the technology. Christelis says this is a necessary precursor to using ones smartphone as a payment method. Once consumers get comfortable with tapping and paying, then theres a less formal transition to having them tap and pay from a phone, he says. This is still unfamiliar territory for many consumers. It will be a while until it becomes the norm, says Christelis. Also, many retailers dont have the proper terminals in their stores. The tap-and-pay technology uses near field communication (NFC) and offers consumers a speedier transaction. It uses a micro-location system, meaning whether the technology is implanted into a device or credit card it must be very close to the merchants terminal, usually less than an inch away, before data is exchanged from the devices. Most new debit and credit cards are NFC-enabled, but not all smartphones have the technology. Christelis says by 2017, more than 50 per cent of the smartphones in Canada will be NFC-enabled. That number is relatively low for a technology thats pegged to take off. If only half of the smartphones are NFC-enabled, how are consumers supposed to accept the trend? BlackBerry and Android have been quick to adopt the technology. Apple, on the other hand, has not. It chooses to focus on cloud-based technology, what it is calling the iBeacon, which uses Bluetooth Low Energy technology (BLE). This may allow for more complex and personalized interactions between consumer and merchant. Imagine, youre browsing in your favourite store when a special offer pops up on your screen, allowing you to pay for the purchase right then and there. IBeacon works like this: A beacon, or terminal, is placed in a store. When a consumer walks in, his phone and the beacon communicate, offering him a more tailored experience. No formal checkout required, just a couple of buttons pressed and the item is yours. Paper receipts would become obsolete. But are Canadians ready to use their phones as methods of payment? The big issue for consumers isnt the payment method; there are plenty of payment options available today. Its about making things easier for them, says Christelis. Emrich agrees. He says the barrier to mobiles widespread use is the technology itself. Whipping out my credit or debit card is easier than mobile at this point. So why would I use it? Theres no reason, no incentive yet, he says. Another puzzle to solve is battery life. If it is supposed to be our wallets and battery life lasts only five hours, what do you do when youve drained your battery halfway through the day? asks Emrich. Security is also an ongoing issue; many consumers simply dont trust the technology. Theres a lot of effort on the part of payment and mobile networks to provide an infrastructure that is trustworthy, Christelis says. Thats not to say youre never going to have a breach. You have breaches with credit card and debit card payments. On the administrative side, the Ministry of Finance has made an addendum to include mobile in the code of conduct for the credit and debit card industry in Canada, which addresses fairness but not security. The regulatory response is in reaction to things that happen rather than try to anticipate the way technology goes, Christelis adds. And then theres the issue of fragmentation; there is no consensus on how to move forward. Major banks have partnerships with NFC. Many retailers prefer the QR methods while others will jump on board the beacon method. This division will continue to be a major issue in the mobile space - even more so than we are seeing today. Its a technology play right now. Were forgetting about the person we are supposed to be thinking of most. And that person is just trying to get used to all of this, says Emrich. Hopefully it wont be too messy, because that will slow the adoption - not the innovation - but the adoption by people, he says. Keep your mobile safe Being constantly connected comes with security risks. The Government of Canada wants you to stay safe on your phone. Heres how: Keep security features: Never bypass the security features on a smartphone or tablet. Security features are in place to protect you; always keep them active. Use trusted Wi-Fi: Your phone is a handy way to stay connected through the Internet, but its also an open invitation for hackers, fraudsters or malware. An untrusted or unsecure network could be the opportunity a predator needs in order to gain access to your device and your contact list. Turn off the automatic Wi-Fi network search to stay extra protected. Keep Bluetooth hidden: Two Bluetooth-enabled devices have to recognize each other before they can link. Essentially, its a handshake. Keep it turned off until you need it. Predators cant link up without your Bluetooth address. If you set it as discoverable you may show up in the wrong hands. Its important to note that viruses can spread through Bluetooth activity. Should you lose a Bluetooth-enabled device, delete its pairing immediately since one device can link to the next. Download reliable apps: Malicious software affects mobile devices too. Downloading a third-party application may not be wise. Be sure to read the permissions required before you install the application. If the access seems excessive, it could be malicious. Lock up: It may be more convenient to pick up your device and use it immediately. What if it fell into the wrong hands? Set your devices to lock after a brief period of time. To gain access, youll need to set a personal identification number (PIN) that is set by you. Should someone swipe your phone, theyll have major guesswork to do. Delete before you trade: You know you were in line for the latest device. When trading in your old phone for a new one, be sure to delete all personal data and return it to its factory settings before handing it over.
Posted on: Tue, 03 Dec 2013 18:24:34 +0000
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