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Mobile-payment technology - A touchy subject

2014-10-23 07:20:27

Oct 22nd 2014, 19:50 by B.R.

THIS morning, at the train station on the way to work, Gulliver did not buy a

train ticket before boarding the train. Nor did he use a pre-paid travel card

or show a season ticket. Like many others on the network, I merely touched my

debit card on to a reader on the way into the station, and then again at the

gates of the tube on the way out. It was the same at the sushi takeaway: a

quick touch of the card and off I went with my lunch. It would have been the

same whether I had wanted to buy a newspaper or a tube of toothpaste.

Contactless-payment technology, which uses a radio-frequency identification in

a chip in the card to talk to a reader, has been around in Britain since 2008.

But it has only begun to take off over the past couple of years. It allows

cardholders to pay for goods worth 20 ($32) without having to enter a PIN. It

essentially replaces the spare change in your wallet, and is wonderfully

convenient. Which explains why it is becoming increasingly common. There were

48.3m contactless cards and 23.8m contactless transactions in Britain in June

2014, according to the UK Cards Association, a trade group.

The technology can be used throughout Europe. Indeed, Poland was the biggest

market in 2013. Yet, it has still to revolutionise travel. That is because it

is not yet widespread enough around the world to make it possible for

travellers to rely on it. And perhaps it never will. This week, Apple, a

smartphone maker, launched a technology that might truly change the way we pay

for things when we go abroad.

Apple Pay is a mobile version of contactless payment. Users' card details are

stored on an iPhone, which is then presented to the reader. The user verifies

his identification using the fingerprint reader on his device.

It has some big advantages, not least security. As the phone does not pass

credit card details on to the vendor, it has the scope to reduce fraud, which

is a particularly big problem in America, given its reticence at adopting

chip-and-PIN cards, which are standard in the rest of the developed world.

At the moment it is only available in America, though it will probably arrive

in Europe in 2015. This will limit its immediate usefulness for business

travellers. As will the fact that it is not yet offered in conjunction with

corporate credit cards, though, as the big card companies have all signed up,

this is bound to change.

But Apple has an advantage compared with previous attempts at launching a

mobile wallet: it has the clout to make it work. The sheer number of iPhones in

use make it worthwhile for vendors to sign up. Once the idea has become widely

accepted, it will surely pave the way for competitors. All of which could mean

the end of carrying foreign currency abroad. Gulliver would be wholly

enthusiastic, if it were not for one tiny thing. It always takes my iPhone at

least three attempts to recognise my fingerprint. I can already hear the

tutting in the ticket-barrier queue behind me.