The recent evolution of mobile payments and especially the technology powering its momentum like Near-Field Communication (NFC) is set to turn the consumer-financial ecosystem upside down, but what does it mean for companies like Visa and Mastercard?
Following the announcement of ISIS, a collaboration between Verizon, AT&T and T-Mobile aimed at collectively furthering the mobile commerce market via NFC and other concepts, Visa published a blog post firing back at those criticizing legacy financial institutions like Visa for not being as ahead of the curve as they should be. The main argument is that while innovation is happening quickly outside the main infrastructure providers, the underlying processing power is just as vital.
“It might be easy to build an iPhone app that lets you enter in the phone number of a co-worker you want to pay back for lunch, a common promise in the new mobile-payments world,” writes Bill Gajda, Head of Global Mobile Product for Visa. “But then someone has to do the intricate behind-the-scenes data processing that makes sure the card isn’t stolen, the people involved aren’t scammers, the payer’s account has the necessary funds and the actual money transfer happens quickly and without a glitch.”
The arguments came after Forbes.com ran a blog post by Bob Egan in which he claimed that current mobile banking offers are “somewhat lackluster,” and that there is an absence of “real innovation in payments.” While that’s true, the problem has long rested in a lack of consumer-sentiment for the concept due largely to security concerns and overall education and availability of services. Now that Apple, Google and many other heavy-hitters are vying for market share in this rapidly evolving industry, true innovation is happening at a pace that many have always envisioned.