There was an interesting statement from one of the banks at this week’s conference: “we wish we could just take a real-time NFC payment direct from the mobile contactless terminal in the merchant and straight through to the bank’s deposit account.”
This got me thinking: “why not?”
Why can’t a bank take a payment direct from terminal to account?
Oh yes, there’s too many hands involved.
The terminal is part of the four-pillar merchant to bank, issuer and acquirer structure that involves interchange fees, waivers and infrastructure loops.
Then, if it’s an international payment, you probably have the payee’s bank and the payer’s bank and possibly several banks along the way touched by the BEN, SHA, OUR SWIFT messaging transmitters and receivers.
Finally, you have the different governmental controls, taxes and structures overlaying all of this, which means that the idea of a direct payment from mobile NFC to account is near impossible.
Unless you’re Google or PayPal of course.
What are these guys doing?
They’re purely putting a wrap, a skin if you like, over the complex infrastructure underneath …
… and making it look like a simple touch and go.
That’s what the banks should be doing isn’t it?
Ah yes, we are far too bogged down with our own language and ways to realise this simplicity of putting skin in the game.
Or are we?
The Dutch iDEAL approach and more recent announcement of ClearXchange from Bank of America, Wells Fargo and Bank of America are clearly changing things, as are SERVE from American Express and the launch of Visa and MasterCard initiatives all based around mobile wallets and P2P services is starting to move all of us to real-time direct payments from the bank deposit accounts to the point of sale.
That’s what we all have to strive for today.
In other words, we are all becoming PayPals when it comes to retail payments processing.
This is an area we will debate in depth at a Financial Services Club meeting in London on 20th June 2011 (added in response to Dave Birch's comment below: from 6:00pm till 9:00 at The City IOD, New Broad Street House, 35 New Broad Street, London, EC2M 1NH).
As AMEX and VISA open P2P payments offerings and PayPal moves into merchant terminals, the markets are asking: what is the future for retail payments? Will we all just become PayPals?
To debate this point, we have gathered a prestigious panel with:
John Chaplin, President, Ixaris;
John France, Managing Director, eWise Payo;
Mike Jones, Senior Manager, Core Payments Group, PayPal; and
Tom Gregory, Head of Digital Consumer Payments, Barclaycard.
John Chaplin, President, Ixaris
Ixaris, a provider of prepaid payment applications and services, appointed John Chaplin as President in July 2010. John has previously worked in senior positions at First Data Corporation and Visa, where he was Executive Vice President in charge of its processing business in Europe. He is also a member of the Payments Market Expert Group that advises the European Commission.
John France, Managing Director, eWise Payo
eWise, a global provider of online payments and personal financial management solutions, appointed John France as Managing Director of the eWise European Payments Division, based in the UK, in October 2010. John was formerly Head of Processing Sales for Visa Europe where his exposure across the entire payments value chain enabled him to understand the various stakeholder models and value propositions associated with B2C and B2B payments. Prior to Visa, John held senior sales roles with ACI Worldwide and Nomad.
Mike Jones, Senior Manager, Core Payments Group, PayPal
Mike Jones has responsibility for PayPal’s European and International card processing strategy. In previous roles he worked on PayPal’s European expansion, SEPA strategy and deep localisation projects. Prior to joining PayPal, Mike worked for CyberSource Europe running strategic alliances.
Tom Gregory, Head of Digital Consumer Payments, Barclaycard
Tom was appointed to Head of Digital Consumer Payments for Barclaycard at the start of 2010, and is responsible for the digital payments strategy, partner development, execution and delivery, and management of the digital payments service including NFC / mobile payments, online payments, and adjacent areas in the payments cycle. Prior to this role, he was Head of Change, Business and International with Barclaycard and had various roles in the Barclays Bank Group.