The promise of a mobile wallet that completely replaces the need to carry around our heavy, overloaded cowhides may still be far away. But according to Derek Colfer, head of mobile innovation at Visa Canada, the future of mobile payments is already here.
Techvibes had the chance to sit down with Colfer to talk about the changing face of payments in Canada before his session on this topic at Mesh13 this week.
According to Colfer, the key ingredient for mobile payments lies within a protocol called NFC or near field communications. Visa is focused on NFC because it is today what the plastic card was back in the 50s: a common standard which could be used by anyone to purchase anything, anywhere.
“The original Visa promise was that you could use this piece of plastic anywhere with zero-liability. The solution was scalable and interoperable. The only protocol out there today that mimics the interoperability, scale and security that plastic promised and delivered on today is NFC,” explained Colfer.
Ironically, Canadian consumers are using NFC the most with their plastic cards which have NFC antennas embedded within them. NFC-enabled cards allow users to wave their card at the point of sale instead of swiping or using a chip and pin method for purchases up to $50. Visa Canadian cardholders are using this contactless form of payment every 0.6 seconds, according to Colfer.
Visa sees these contactless credit card payments as a necessary way to groom the purchasing behavior of Canadian consumers to ease them into a full transition to mobile. “The beauty of it is that once you start to wave your card. There is no difference between waving a card and waving a phone,” says Colfer.
But in order for mobile payments to gain mass adoption, Colfer believes we need to be able to make purchases greater than $50 which will soon be possible. He confirmed that the technology to wave your phone at a point of sale and enter a passcode to make larger purchases is already in the works and should be rolling out soon.
Visa Canada’s commitment to NFC payments is extremely bullish in Canada especially because per capita we are walking around with the most smartphones in our hands. Colfer confirmed that Visa has moved past the pilot stage with mobile payments and are now putting all of their efforts in full commercial rollouts with more than 10 committed projects globally. Last week, Canadians got a big boost in mobile payment support with payment solutions being announced from CIBC and RBC.
Visa has already certified over 150 devices for NFC payments with this number growing daily and work with 9 out of 10 major device manufacturers and 4 out of the 5 major operating systems. The only one missing, of course, is Apple who has not yet released a handset with NFC capabilities. But Colfer says, “when and if Apple puts NFC in their devices, Visa will be there to certify these as well."
Mobile payments are a critical step in getting us to the highly coveted mobile wallet which, according to Colfer, we shouldn’t expect anytime soon.
“We are nowhere near providing the consumer with a mobile wallet until we can take everything out of your cowhide wallet and put it in your digital wallet—this means your drivers license, your transit pass, your loyalty cards, your library cards. There is ground to cover to fulfill the promise of leaving your wallet behind and just using your phone. So what we are doing is starting with payments which is a good place to start,” explains Colfer.