Who Is

watching out for you?

In today's world you need to understand a few more things...

Who Is

knocking on your virtual front door?

It could be someone down the block or from the Bloc

How Secure Are Contactless Payment Terminals?

24-Jul-2012 - How secure are contactless payment terminals? 

Yes, mobile payment is still in its infancy in Canada.

“A critical mass of terminals that accept contactless transactions, and consumer adoption are two of the biggest challenges for the growth of mobile payment,” said David Chaudhari, Managing Director of Ingenico Canada, provider of payment solutions with 17 million terminals deployed in 125 countries. “Ingenico is accelerating mobile-enabled terminal deployment by integrating contactless acceptance capability on the majority of new devices.”

As one of the early payment solutions providers of contactless capability and scheme certification, Ingenico is attempting to lead Canadian merchants out of the contactless payment wilderness, using its efforts and experience in other markets that have embraced contactless technology.

“Today, the vast majority of all new devices being deployed to Ingenico clients have integrated contactless,” he said. Canadian merchants who adopt the new technology will be ready to accept mobile payments as the adoption rates grow.”

The firm has offices in Toronto, Mississauga, and Montreal. The Canadian group is (naturally) part of the Atlanta office, all reporting to head office in Paris.

Last month CIBC and Rogers announced plans for mobile wallets and payments. How does a traditional device manufacturer fit in?

“Although we are a manufacturer of a range of devices, we enable by adding feature functionality for emerging trends, like mobile,” Chaudhari said. “We work with banks and large retailers to implement devices that accept cashless payment. The majority of devices we ship have the capability of accepting contactless payments.”

He promised there won’t be additional requirements when consumers start using mobile wallets.

Ingenico still manufactures devices that don’t accept contactless transactions. Certain subsets of the marketplace are card based. Slightly more than 80% [Editor’s note: per Pareto] of the devices in 2011 were contactless capable.

“Up until last year we weren’t shipping many. In 2010 it was possibly 10% of the devices we shipped. We’ve seen an explosion in the past year, due to more and more parties getting involved in mobile wallet schemes and transactions, and the convergence of a few factors.”

One factor is the sheer scale of adoption in some countries is reducing costs. Another that Chaudhari calls, “the Believability Index” has increased.

“There’s been a lot of talk about it, and a number of real things happened that coincided,” he said. “When you have a major announcement from a large bank, people realize it’s real, and happening. We’re going beyond the pilot phase. Consumers can call their bank and say they want to use their mobile phones for payments.”

Back in the day many people talked in the early phase about online tire kicking versus online buying. With Internet ecommerce adoption we saw key players and trusted brands implementing. That really is the convergence and believability index.

“Another thing is the adoption of smartphones has been incredible,” said Chaudhari. “More consumers are realizing this is very much more than a telephone. They’re looking for all sorts of value adds, using it as GPS or listening to radio.”

Smartphones also improve users’ shopping experience, or at least are believed to.

“If it took ecommerce years to truly become a ubiquitous habit, I think it’ll be half of that time,” he said. “The rate of adoption will be significantly quicker, for no other reason than consumer adoption trends seem to be quickening in pace. With every new adoption there’s less fear to overcome. The youth of today are gong to be very quick adopters.”

Part of the previous challenge was trying to build a business case for contactless payment. Much of that has been completed.

“It’s my understanding Rogers will be renting out space on its chips, as the chip is allowing more functionality,” Chaudhari said. “We’re only in the beginning stages of what people will think about adding. There are many functions I haven’t contemplated. A year from now we’ll hear from other telcos and banks. Loyalty is a natural extension. Any card in your wallet right now can be added to your phone. It’s an exciting time in the payment industry, not only for accepting payment transactions, but also a whole raft of other transactions.”