By Mark Ranta, Payments expert at ACI Worldwide:
Will mobile replace wallets and PCs in 2015? No, it won’t. Eventually? Probably, but it won’t be “soon”.
Even as 2015 is poised to be the year of mobile, mobile will neither replace ‘leather’ in the consumer payments space nor will it replace desktops in the corporate space (try doing a complex transaction via mobile). Mobile will continue to be a very important extension and a channel of enhancement, but don’t ditch your wallet just yet! There are not enough POS terminals or NFC and MCX readers out there which means that even some of the big retailers cannot accept this payment type, while many small shops not only cannot, but will not accept mobile payments.
2015 will be the year of mobile as the ‘enhancement’ channel and not the year of mobile as the ‘replacement’ of other forms of payments.
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Legacy modernisation will be a top priority
In the midst of all the hype around mobile payments one story remains largely untold – the rails along which all those payments (and along with it our data) are sent weren’t built with the needs of the modern world in mind. Sometimes we are reminded of the fact that our payments systems aren’t up to scratch; for example when the Royal Bank of Scotland was fined £56 million following an IT meltdown in 2012 which locked millions of customers out of their accounts. 2015 might be the year when things begin to change. Legacy modernisation is now a top priority for more than two-thirds of the world’s financial institutions, according to a new major report by Ovum published in December. Banks worldwide are finally planning to invest into new infrastructure, payment switching and authorisation platforms, clearing and settlement systems and payment operations.
Card Not Present fraud
Speaking of fraud, card not present is the future of fraud; and thanks to mobile payments, fraud will get harder to commit (thank you tokenization). With the introduction of EMV and mobile payments just starting to ramp up, the window is starting to close for simple mag stripe-related fraud, which could mean additional focus from fraudsters in the Card Not Present space. As they say, when one door closes another one opens.