“Chip enabled credit cards…mobile payment apps…How can we keep up?”
Every week there seems to be advances to payment technologies. From one direction we are being hit with chip enabled credit/debit cards that do not have to be swiped but just placed near a contactless payment reader. Worldwide there are already 1.65 billion of these new cards issued, with another 575 estimated for the U.S. by the end of 2015. At that time 50% of all US credit/debit cards will have the EMV chip. Many will require a pin code before activation but others will feature fingerprint-activated security features that are embed in the EMV chip of each card. Next year a new law goes into effect placing fraud liability on the entity in the transaction chain that has the oldest technology. Where will this cycle end?
From another direction, mobile payment systems and apps are quickly becoming the payment of choice for the younger generations, where smartphones are the center of their world. We older folks notice the smartphones that have a scan code that is used in place of airline paper boarding passes and many have taken this first step and like it. The Starbucks mobile app was used for more than $1 billion of payments in 2013. BYNDL is a mobile wallet payment system that includes a customer engagement platform, and is aligned with almost all the majors including Visa, Master Card, American Express, Pay Pal, and Apple Pay. Yes, Apple is heavily moving forward with Apple Pay for iPhone 6 models and future models.
The vending industry is getting traction through USA Technologies that currently has over 150,000 NFC readers in place. PayRange uses a Blukey in vending machines (and is working with AMOA for amusement games) to link up and with smartphones that come within its wireless range. As reported by Vending Times, the Three Square app is being used in unattended micromarkets for payment checkout for Android and iOS mobile devices. The customer sets up an account, establishes a balance and then uses the smartphone’s camera to scan each barcoded item purchased. This is the entire system. Not even a kiosk is needed!
What this could mean. If we agree that an endless cycle of new credit cards being forced upon us is not practical, then what?…
It is obvious that we are heading toward a cashless society. It also seems likely that the younger generations will continue to use their smartphones to make mobile payments and to individually interact through apps with their preferred service and product suppliers. Even the banking industry has noticed that more and more check deposits are being made through smartphones. The mobile wallet concept should quickly gain traction and fewer and fewer people will carry credit cards. Some will carry one credit card as a back-up in case their cell phone needs to be charged, breaks or is stolen. After a while even these problems will be minimized or eliminated so no one will need to carry a credit card.
The ‘street’ part of the amusement game industry (limited number of games per location) will most likely follow the vending industry and easily and rapidly move towards mobile payment systems. This will require one special contactless reader for each game or machine and a set of standards. This makes much more sense than trying to keep up with the endless upgrades necessary for any new technology credit card acceptance so the operator is not the weak link in the technology chain. However, the FEC industry needs to take a more aggressive path. While the rest of the U.S. is moving towards cashless, the FEC industry is slowly moving forward with debit card systems. Almost all of the new FEC’s utilize debit card systems and currently approximately 10% of FEC’s have them. But as mobile payment grows, more and more people will not feel comfortable with carrying any type of loyalty card. Even today, a growing number of registered FEC debit card customers ‘forget’ to bring their cards with them ‘sometimes.’ In the future ‘sometimes forget’ will turn to ‘often forget’ and then to ‘always naturally forget’.
What is needed is a method to include every game debit card into a mobile payment app so carrying a physical game debit card to a FEC is no longer necessary. Perhaps the first step is for a customer to scan their mobile wallet game card to a debit card kiosk or POS station that has the proper reader and have the kiosk or staff person issue a physical game card that has all of the customer’s information and current credit and ticket point balances on it. If the customer wants to add value to the card, it could be done just before the card is issued or do it from their smartphone. At the end of the visit a customer would return the game card and any value and points would then be wirelessly transferred to their smartphone and the returned game card would be cleared and voided.
Under this scenario, every debit card system supplier would need its own specific app. Perhaps the AAMA Standardization Committee could look into creating some basic standards to make sure that each debit card system app would be compatible with as many smartphone mobile payment systems as possible and continue to upgrade the standards as future technologies dictate.
