There is a digital convergence happening in the payments space. Online shopping, mobile devices, and pervasive connectivity are redefining the roles of ‘traditional’ and ‘emerging’ payments systems, while mobile devices are blurring the lines between card-not-present and card-present transactions.
Payments Afrika attended the recent Retail Congress Africa conference and had an opportunity to speak to Mark Elliott, division president of MasterCard in South Africa. According to Elliott there is a definite move towards a future where card will be replaced with mobile.
New technologies such as NFC or ‘contactless’ payments will bring benefits to both retailers and consumers, providing a more seamless checkout experience and improving the speed of checkout at point-of-sale.
NFC or ‘near-field communication’ technology can be seen in newer credit and cheque cards as well as emerging mobile payment solutions such as Apple Pay and Samsung Pay.
Consumers are therefore being led on a payment transformation journey, with the emergence of contactless cards customers will become more familiar with a tap-and-go system, which will slowly take over from the traditional swiping. At the same time the emergence of payment functionality on smartphones will introduce the idea of replacing the card with the phone. People will then be able to migrate from tap-and-go with their card to tap-and-go with their phone.
Even this transition is only the first step in creating mobile as a payments channel. As mobile emerges as more of a channel in its own right, the next hurdle that retailers and payments service providers will have to overcome is that of in-app payments. Creating an in-app payment system that is secure and easy to use will be the next big win in the payments space.
