Contactless Card Payments.com is dedicated to providing quality information on the Contactless transactions using an integrated contactless
radio and chipset built into the mobile device and credit debit cards.
Contactless payment card's new value bring with it new threats.
Concerns around security and risk management have been a hot topic since the birth of contactless payment card and Mobile Point-of-sell (MPOS) and the market has already seen several waves of data encryption and security improvements to hardware and software.
End-to-end encryption standards have been enforced, closing the gaps seen in early MPOS magstripe devices. Payment network certification labs have worked at capacity levels to help compliant and safe solutions come to market.
By taking card acceptance from traditional retailing to individuals and small merchants, Contactless Payment and MPOS has transformed user experiences for everyone, both buyers and sellers.
From the consumer's perspective, Contactless Payment has created new value through convenience and payment protections from their card issuer relationship previously unavailable through cash or check payments.
From a bank's perspective Contactless Payment card provides opportunities in both distribution strategy and differentiation.
We can see a gap between dedicated point-of-sell (POS) and MPOS in the growing deployment of contactless technology, which MPOS solutions do not yet support adequately.
The Built-in NFC antennas on newer smart-phones are not suitable for contactless payments for two reasons: 1 Smartphones equipped with NFC technology typically have an antenna range of one-two centimeters (cm) versus a payment standard requirement32 of two-four cm. 2 Smartphones equipped with NFC technology typically do not have encryption between the NFC antenna and the smartphone's baseband processor.
As NFC payments become more widespread, smartphone manufacturers may address these shortcomings issue to make contactless MPOS possible without any accessories on NFC smartphones.
Recent announcements signal that smartphone NFC payments are finally achieving real market presence;
To support various card modalities (magnetic stripe, contact chip, near field communication (NFC) / contactless) these hardware add-ons take several forms, such as a dongle attached to an audio or docking port, a sleeve or cover, or a wireless card reader.
The most successful MPOS solutions so far have focused on capturing small businesses with low costs, featuring low-cost magstripe card readers - this trend has, in turn, impacted MPOS implementations for chip card solutions.
There are few fully certified EMV MPOS solutions and those that do exist, such as Ingenico's iSMP, are typically used by more traditional merchants because of the higher price point driven by contact hardware and an encrypted PIN pad.
Other solutions aiming for lower price points in EMV markets either ignore the existence of chip technology altogether - as Square has with its entrance to Canada without Interac support - or provide hybrid models without PIN entry - as iZettle does with its 'Chip and Signature' solution.
While the chip and PIN is likely to evolve over time, low-cost EMV compliant PIN entry is currently a challenge for MPOS solutions targetting the global market. Major payment brands have also expressed their views on this issue.
While Visa Europe has recently stated that it will not accept chip and signature transactions, MasterCard changed its rules in October 2012, permitting small merchants to use chip solutions without the need of a PIN pad on a global basis.
Several players have addressed the chip and PIN requirements with new hardware:
- PayPal has a new offering of 'Here in Europe', replacing its magstripe dongle with a bluetooth-connected PIN pad.
- Dutch provider, Adyen also has a bluetooth PIN pad with its Shuttle device.
- Payleven is offering its version in the United Kingdom (UK), Germany, Italy, the Netherlands and Poland.
- mPowa offers its EMV chip and PIN pad device and claims it is Ďan eighth of the price, a fifth of the weight and a third of the cost.
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All the best,
Contactless Card Payments.com Website Administrator