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The Green Sheet Online Edition

October 10, 2011 • Issue 11:10:01

Research Rundown

Which approach to mobile payments will lead the pack?

According to research by Aite Group LLC, mobile payments in the United States are expected to reach $214 billion by 2014. However, forecasting which approach will prevail is no easy task. Will integrated near field communication (NFC), nonintegrated contactless, bar code, cloud-based or text messaging ultimately become the preferred choice?

A Smart Card Alliance white paper titled The Mobile Payments and NFC Landscape: A U.S. Perspective attempts to grapple with these questions by providing an overview of the state of the market and evaluating the strategic advantages and disadvantages of each payment model.

"The goal of this white paper is to help industry stakeholders understand the current mobile payments landscape, anticipate how mobile payments are likely to change, and appreciate the opportunities that mobile payments, and particularly NFC-enabled mobile contactless payments, present," said SCA Executive Director Randy Vanderhoof.

Topics covered in the white paper include:

  • The mobile financial application landscape for banking, commerce, POS and payment environments, with an analysis of person-to-person, remote and proximity payments

  • Key benefits and requirements of NFC mobile proximity payments to merchants, consumers, issuers and mobile operators

  • The state of the market as it relates to the NFC ecosystem and provisioning, NFC security, NFC POS infrastructure status and the regulatory environment

  • A comparison of mobile payment approaches based on reliability at the POS, transaction speed, security, ease of use, wallet functionality, merchant acceptance and device deployment

  • Stakeholder relationships and security elements for various mobile payment models

For a free download of the SCA's 53-page white paper visit:

Smart phone, tablet users at risk

"In spite of the challenges caused by form 1099-K, Aite Group sees an incredible opportunity for ISOs and acquirers to monetize this requirement. Partially because of the expenses incurred, ISOs and merchant acquirers will be able to justify increasing their prices or charging for compliance."

- Adil Moussa, Senior Analyst, Aite Group
Source: Aite Group Impact Note

Credit sees resurgence in 2011

A First Data Corp. advisors' analysis reported credit card dollar volume year-over-year growth in Feb. 2011 surpassed that of signature or PIN debit for the first time in over two years. And the shift continued in the first half of 2011. Titled Rebirth of Credit - Minus the Debt, the report also provides the average dollar volume, total spend and total credit spend across core retail sectors from the second quarter of 2010 to the second quarter of 2011.

Micropayment fee dilemma

Discount fees charged to merchants who accept micropayments occupy a significant percentage of revenue and thus reduce profitability, causing what has been termed the "micropayments problem," according to the Mercator Advisory Group report, Solving the Micropayments Problem: Minimizing the Impact of Discount Fees on Small Ticket Transactions. The report discusses how merchants and networks are addressing this issue.

A risk framework for P2P payments

The Retail Payments Risk Forum published a working paper on peer-to-peer (P2P) payments as a resource for the payments industry, regulators and consumers. Offering a framework for banks and regulators to assess and manage risk exposure for different P2P products, the paper provides case studies and categorizes the transaction life cycle by counterparties, access channel, funds load and receipt instruments, and settlement networks.

end of article

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