British and Americans Skeptical of Digital Payments

 Lately there has been an exponential growth in the mobile payment industry. From online shopping on a mobile device to paying for gas with mobile payment services, there are very few payments that can’t be made on a mobile device. Yet, with all of the features and convenience that go along with making mobile payments, Americans are still not sure about the mobile payment system. However, many other countries have already adopted mobile payments as a new standard in disbursing funds.
            For many British and American mobile payment skeptics, security is a main concern. In fact, over twenty percent of Americans who have access to mobile payment services site security concerns as one of their top reasons preventing them from being used extensively. Security is far less of a concern in countries such as Singapore and Thailand, having only around fifteen percent of individuals with concerns about security keeping them from using mobile payments more often.
            Most mobile payment services such as LevelUp are far safer than traditional credit and debit cards. These services do not let anyone but the user see credit card numbers, personal information, or payment histories.
 If you use mobile payment services, are security threats as big of a deal to you as the average American? Why do you think that British and American users are still so skeptical? Is there any reasonable way to clear the air of these concerns?

http://www.fastcompany.com/3001646/us-lagging-mobile-commerce-far-east-lead

Digital Payment Types

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Digital payments defined as an electronic payment system used to satisfied consumers convenience  by making payments over an electronic network such as the Internet

This video shows how digital payments could be beneficial  in our daily life

The success of mobile payments would not have been possible without the massive growth in the number of smartphones and the falling cost of computing power, both of which are lowering the barriers to new entrants in parts of finance. Smartphones are vital to this, because by providing consumers with powerful computing devices and internet connections that are always on, they open the way to all sorts of other innovations.

The evolution of payment technology has moved fast. Consumers today are less likely to use cheques as a means of payment. While there is a segment of consumers that prefer to use cash, there also appears to be a growing preference to use direct card payments, even for micro payments, if this is delivered in a way that is simple and convenient for the consumer.

Mobile technology is creating a major disruption in the way we shop. mCOMMERCE, mPAYMENTS and mWALLETS are happening contactlesslly  through mobile apps

mCOMMERCE: M-Commerce is the use of devices to communicate, inform transact and entertain using text and data via a connection to public and private networks. It is basically the usage of the internet to pay for your purchases using your bank account.

mPAYMENTS:  M-payment is a real-time payment that is made with the use of a mobile device. Formally known as a mobile payment, the m-payment involves submitting an electronic remittance for an outstanding bill. Which means that you can use your phone and swipe it as a credit cad. It differ from mCOMMERCE by providing the consumer  to physically swipe their phones.

mWALLETS: m-Wallets (Mobile Wallets) are much like Prepaid Cards. They need to be loaded with money prior to use. However, funds held by the m-Wallet are securely accessed directly from the mobile phone. Although m-Wallets are still relatively new and hence not yet widely spread, MFSL believes this will change in the near term with subscriber education and competitive pricing. m-Wallet usage is growing very quickly and it is only a matter of time before they become a standard payment instrument

A Different Perspective

I remember growing up and learning the concept of money. Crisp green bills and shiny coins always caught my attention. My parents got me my first piggy bank when I was 8 years old and since then, saving money has always been a habit of mine. It is important for parents to teach their kids how money works, and the importance of saving so that when they get older they are able to manage and budget their money efficiently.

Digital payments has been becoming increasingly popular because it is quick and convenient. And it is also pretty cool when you use mobile payment apps like Square where you can process a transaction almost everywhere and at any time using a mobile device. However, with the use of digital payments, less physical money is being used. Kids nowadays have games on their Ipads and phones that require them to pay for a subscription, to unlock a better character or weapon, or to purchase game coins. ( A very popular MMO is Club Penguin).When children get a hold of games like this, it is difficult for them to understand what they are actually doing. When they go to buy something off of a mobile game, they do not have to go open up their piggy bank and take out one dollar and  give it to a cashier. They do not see how their savings are slowly declining through time. All it takes is one tap on the screen, and if they are heavy gamers, these purchases can accumulate and leave parents with enormous bills at the end of the month. What I am trying to get across is that parents should watch over how much time kids are playing with these types of games, and how much they buy on mobile devices. Parents should encourage kids to keep a savings account or a piggy bank so they can physically see what is theirs, and when they want to buy a toy, they know they will have to lose some of that earned money in exchange. Habits like saving money prepare teenagers when they get their first job,while they are in high school, and when they enroll in college, teaching them responsibility and self-control.

Should digital payments be completely avoided by consumers? Should parents completely disallow their children to visit mobile gaming apps that are linked to bank accounts?

EMV Technology: Changing the system

EMV is a global standard that defines the interaction at physical, electrical, data and application levels between IC cards (integrated circuit cards) and the devices that process their transactions. This move to an EMV or "smart card" payment system does offer some benefits. Improved security, fraud protection, finer control of offline transaction approvals, and multiple applications to be held on a single card to form an e-purse. To move the United States from a magnetic stripe based card to one that is chip based would take a very long time integrate. So on August 9th, 2011 Visa announced its three part accelerated plan to migrate the chip system:

1. Expand the Technology Innovation Program to U.S merchants. (TIP eliminates the requirement to validate their compliance with the PCI Data Security Standard.)

2. Build Processing Infrastructure that will Accept the Chip.

3. Shift the Counterfeit Fraud Liability. ( Currently point-of-sales counterfeit fraud liability is received by card issuers; liability will shift to the merchant's acquirer)

This EMV technology is the base for these new developing e-wallets. EMV terminals will be used to read data from your smart phone (pre-loaded with all your card information through applications) and charge the "best-fit" card from a storage cloud. The real question is how safe is it to keep your cards on your cell phone, and even more importantly how safe are your cards sitting in a massive cloud? What are your thoughts on this new card based system?




Citations:



http://www.gemalto.com/emv/

http://en.wikipedia.org/wiki/EMV#Differences_and_benefits_of_EMV

LevelUp Levels Up Mobile Payment Technology

LevelUp, a centralized payment system based in Boston, has recently adopted a radical new strategy in accepting digital payments. Before I delve into this strategy, let me explain what LevelUp is, and how it works. LevelUp is a payment program which requires a user entering credit card information manually or by taking a snapshot of the card. Then, the program generates a unique Quick Response(QR) code for each card. This code is scanned at checkout, allowing for a quick and easy payment experience.

            The unique strategy that LevelUp corporate has adopted totally eliminates per-swipe charges for business owners. Instead, LevelUp generates revenue based on promotion programs. In an effort to increase sales, merchants can offer promotions to new and loyal customers. Typical promotions give customers discounts for initial purchases and additional discounts for loyal patronage. LevelUp collects a 40% promotion charge each time a purchase is made. For example, if there is a $5 discount for initial customers, LevelUp receives $2 of the discount.

            Could this make paying a smoother process? More importantly, will a substantial number of customers and businesses use it?