How do I pay thee, let me count the ways

[Dave Birch] So last week in New York I used chip, contactless chip, stripe, Google Wallet, LevelUp, retailer stored-value, cash and card-on-file to retailer app. They all worked, but none of them worked reliably and ubiquitously, which were two of David Grigg’s watchwords in his excellent kick-off talk give a Bank of America perspective on the second day of the excellent Wallet Wars conference. Actually, that’s not quite correct: my chip and PIN debit card worked perfectly in the Citibank ATM and both of my retailer apps worked perfectly. But I did have problems all week*.

1. I forgot the PIN on my Simple card so I had to call and reset it (after which it worked perfectly).
2. My UK EMV contactless credit card was declined, for no reason I know of.
3. Google Wallet wouldn’t work in taxis (I tried three times) although it did work in Duane Reade. Bizarrely, I still had to sign for the transaction — even though there is no signature for them to compare it against, even if they ever checked the signatures, which they don’t — and they still gave me a paper receipt.
4. I took three or four attempts to get the reader to see my LevelUp QR code. In the end the clerk took the phone from me and held it closer to the reader and it worked then. To be fair, he did tell me that he thought it was cool and that other people had used it.
5. I was forced into using cash because I went to a diner for lunch one day and didn’t take the basic precaution of asking if they took cards or if they were a front for a triad money-laundering operation. When the check came I handed over my card with a flourish only to be told it was a cash-only deal. So I had to use the ATM they have in the diner (which cost me like $3) to get out some money to pay. So cash didn’t really work for me either.

I’m not sure I completely agree with David. Reliable, yes. Ubiquitous, no. I have a RingGo app that I can only use to pay for parking, a Hailo app that I use to pay for cabs and an Arriva app (**) that I use to pay for the bus. This isn’t ubiquity but it really doesn’t matter. It’s what Tim Jones (in his SimPay days) called “branded ubiquity”.

But as Tim Jones mentioned in his podcast, in retrospect geography didn’t work for Mondex and VisaCash, so it’s better to go for branded ubiquity (eg, all NCP car parks) than focus too tightly on specific areas.

[From Digital Money: Contactless UK is on the way]

The reason for this is that a key element in the uptake of a new payment system is certainty of tender. Consumers need to know that when they present their card, phone, watch or fingerprint that it will be accepted. If they know for certain it won’t be accepted, then they won’t present it. This is not a problem. I know that MacDonalds have contactless and I like their coffee, so in the morning at Waterloo station I’ll get one of their coffees and tap and go. I know that some other retailers don’t have contactless – so if I’ve forgotten my wallet when cycling over to the office, I won’t bother stopping at Retailer A, I’ll stop at Retailer B. It is uncertainty that I don’t like.

Branded ubiquity contributes to certainty of tender. Now, the card schemes have ubiquity (which doesn’t mean that everything works fine ***) and that is a big, big advantage in a world of wallets that only have three slots. But in a world of wallets with infinite slots, it’s less of an advantage because it is entirely possible that branded ubiquity can substitute for scheme ubiquity. Multiple apps with underlying scheme APIs or direct-to-bank account solutions will, I think, compete with the scheme ubiquity at POS. Indeed, another one (somewhat like the imagined MCX solution) launched this week in Germany.

German discount supermarket Netto is rolling out mobile payments for customers with smartphones, dpa reports. It has launched a mobile app which recognises scanned items at the checkout. This will allow customers to pay for their goods direct from their bank accounts using their phones. The system will be rolled out across more than 4,000 Netto outlets from mid-May.

[From Netto rolls out mobile payment app in Germany – Telecompaper]

All things considered, branded ubiquity is winning the war for my mobile spending. In a typical week, I spend far more through RingGo, Starbucks, Hailo, Arriva, Chipotle (and now KFC in the UK!) on my mobile than I do through my mobile NFC interface that emulates a standard card. Having said that, I think I spent more using my contactless watch in a typical week than I do using my NFC phone, but they may be just a phase.

* And this week too. I just to tried to spend £1.49 on the marvellous “Cards and Payments Intelligence” at iTunes and the transaction was blocked. When I tried to log in to my John Lewis MasterCard account to try and see what the problem was (thinking it was because I’d used the cards last week in that hotbed of fraud, the United States). Indeed, it was America that was the root of the problem, but in fact it was because my wife had unwisely attempted to use her card to buy something online in the USA. The transaction was blocked, as it would have been by any right-thinking card issuer with an interest in reducing fraud. Unfortunately, that meant her card was also blocked today when she attempted to pay a medical bill. Still it only took a quarter of an hour, a Skype call and two international calls from my mobile phone to sort things out. It also turned out that John Lewis had tried to phone me a couple of times, but because I don’t answer calls on my mobile that come from unrecognised numbers and they didn’t leave a message, I had no idea that 0113 298 XXXX was an important call about my credit card and not some ambulance-chasing lawyers trying to persuade me to claim for whiplash because my wife’s car was rear-ended a couple of days ago.

** The Arriva app annoys the hell out of me. I’ve used it for a couple of years and the only kind of ticket I have ever bought (and I’ve bought lots of them) is a one-day bus pass for Woking. Yet every time I run the app I first have to select “South East”, then “Woking” which is at the end of the list, then “One Day”. Why can’t the damn app simply default to the same ticket as last time? There are some basic UX lessons about the switch from web to app, people.

*** When people tell you the current system of cards and authorisation and authentication and settlement works well so why are our clients messing around with chips and mobiles and 2FA and apps and APIs — it doesn’t. How much money was simply wasted blocking my card and blocking my wife’s card and then having to resolve this through a call centre (which, to be fair to John Lewis, was friendly, helpful and efficient).

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers