http://www.pymnts.com/home/ http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1640160 Thanks Karen, I agree with your assessment about EMV and NFC. These two things have been so overwhelmingly overhyped in the past couple years. Visa's Mandate means absolutely nothing. Merchants are already stuck with the risk and liability for taking credit cards and it's no surprise that VI/MC are still trying to shift liability on the merchants and acquirers. By them making this mandate they have done absolutely nothing but declare what already has been declared. This fear factor tactic from VI/MC has fallen to the sidelines just as in the classic "Crying wolf" story. VI/MC have no more clout in this area and must start reinvesting and taking back liability to appease their customers. VI/MC have to start acting like a company rather than an "authority". Wed, 09 Jan 2013 10:50:22 -0600 Gary Shivers http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1640160 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1614598 Hey, hard to believe to read something like that. This article is completely out of scope...
NFC and EMV are flagship payment standards nowadays, true it take more time, but the same happened with all technologies, it took EMV 10 years to become worldwide spread (except of US of course, which still see ancient magastripe as hightech), same with Bluetooth, Wifi, not to mention GSM adoption in US. Wake up girl, it is 2013 !!! Mon, 07 Jan 2013 19:07:40 -0600 Chris http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1614598 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1606888 Great article Karen, and one of the things you do best which is to inspire thought, debate and discussion!

Totally agree on your prepaid needs to get creative - no-one takes and uses prepaid just for the sake of it. Until we collectively deliver a consumer and merchant value exchange, it'll stay in the unprofitable niche corner.

Luckily there are a few of us out there building web meets world solutions that prepaid are best positioned to deliver. Mon, 07 Jan 2013 07:51:46 -0600 Stu Butler http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1606888 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1600279 Karen - Re: Number 1
Optus today announced that it is collaborating with Visa and Heritage Bank to trial a smartphone contactless payment product, using Near Field Communication (NFC) and Visa payWave technology, enabling participants to use their smartphones to securely pay for goods and services.

Maybe Aussies are just early adopters. I mean, we've had chip and pin for ages abnd the States still is struggling with the concept. Sun, 06 Jan 2013 17:18:16 -0600 Peter Colbert http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1600279 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1591957 By way of introduction, I should perhaps say I’ve been in the POS industry for over twenty years, and I’m currently one of the managing partners at Bulloch Technologies. We’re a relatively small company focused solely on the Canadian petroleum/Cstore industry, a niche we’re fairly dominant in. Over the last five years we’ve gone through the cycle the U.S. is just beginning on EMV. With our clients, we’ve rolled out thousands of point of sale terminals that do EMV and contactless transactions coast to coast in Canada.

From what we can figure, we’re the only current petroleum point of sale that does contactless transactions in Canada (rolled out something like 5 years ago). We’re also in beta with contactless EMV transactions with a couple of different acquirers in the kiosk, with pay at the pump work for EMV contactless starting this quarter (the older Paypass shipped something like 4 years ago). For shits and giggles, we recently field-tested the Rogers/CIBC/RIM contactless solution with our software, and it worked flawlessly the first time both in the kiosk and at the pump.

If I could… I think you’re underestimating the market momentum and technical excellence behind EMV. From our perspective as a Canadian company, whipsawed back and forth between the priorities of the U.S. and more generally the world (more specifically Europe in the form of EMV), there were two groups that set out to solve more or less the same security issues with payment – ultimately expressed as PCI and EMV. We see PCI as a fundamentally flawed architecture that will ultimately be forgotten and written off, while EMV is the foundation for the future. It seems to us that the U.S. is not going to be able to avoid doing it’s homework and mastering the technologies underlying EMV. I can see the U.S. rolling out a derivative of today’s EMV… but it still implies all of the POS and host systems will first have to master the basic technology and that’s years of hard work out from today.

As far as phone based payment is concerned… we see it following the path that Rogers/CIBC/RIM have largely trail blazed – the telecom and payment industry will have to work together to securely inject payment into the phone, where it will emulate a normal plastic contactless card as far as the point of sale is concerned. Their implementation is currently the older and woefully insecure older MSR Paypass, rather than the newer EMV implementations, but I suspect they’re working on that. I don’t personally see any point in rolling out an MSR Paypass implementation at this point in Canada.

Please note that there is a ton of homework for multiple parties to do to get to a future scenario of secure, contactless phone base transactions that emulate normal EMV contactless cards. This is going to be something of a marathon.

My sense is that Google did the industry a massive disservice by launching Google Wallet with its attendant levels of hype. The world is going to get to secure, contactless phone based payments, but I feel it’s going to come from continuous evolution and hard work, and not from a disruption and replacement of existing technologies.

The impression I have is that a lot of the payment industry hype in the last couple of years has been coming from pundits grounded in the I.T. industry, not in the payments industry. The payment industry moves slowly, not at the lightning speed of players like Google. I don’t feel that’s about to change, nor should it – this is money after all, and the transitions to future technology need to be done focused on doing it right and less on doing it fast.
Sun, 06 Jan 2013 06:46:50 -0600 Lorne Cam http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1591957 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1565853 Wow. Such interesting predictions - you have essentially predicted nothing will happen, which is right in line with the USAs progress and history, so you may be right.

First, you likely are aware of what is happening in the rest of the developed world outside of the USA. Mastercard has deployed hundreds of thousands of NFC terminals worldwide and EMV is everywhere except the USA. It is quite sad to see that the USA learns nothing from countries that run things better than the USA does. USA will move to EMV and NFC will prevail. NFC speeds checkouts with only a tap compared to a swipe and PIN entry, that is a benefit (re: "until NFC delivers a value proposition to merchants and consumers that moves beyond “tapping is better than swiping,” NFC will remain on life support just about everywhere in the world) NFC is prevalent in Canada at many major retailers including WalMart, gas stations, convenience stores, grocery stores, theatres, etc. Why would these same corporations not want to deploy NFC in the USA?
Shocking to hear you don't think security is important, which must be in line with your thoughts on credit card fraud, that it's not that bad, the system can swallow it. And in line with your view that EMV doesnt help - yes it helps fraud!
And prepaid won't work! I guess that is why JP Morgan Chase launched the Liquid card and WalMart/Amex launched the Bluebird card. I think these companies have pretty strong processes in determining a profitable product, and with the banks lacklustre services in the past, yes, more should reach out to the underbanked and unbanked population.

You should read the below article, and it may help you understand why your "predictions" of essentially nothing happening, may be right. The USA is in a lot of trouble and your biggest problem is ethics amongst regulators, lobbyists, politicians and corporate CEOs.

http://www.theatlantic.com/magazine/print/2013/01/whats-inside-americas-banks/309196/ Fri, 04 Jan 2013 10:09:12 -0600 J Miller http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1565853 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1537784 Karen,

Always a great read! I agree with your insights, especially the one about Mobile Wallets ... progress will be made, but until a few winners arise that can consolidate under a specific banner and protocol, we will continue to have the latest, greatest, newest launch parties throughout the space.

Keep up the good works! Wed, 02 Jan 2013 09:35:39 -0600 Bob Skattum http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1537784 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1534090 Always enjoy your insights Karen! The only one I feel "compelled" to comment on is the EMV prophecy.

While I totally agree with you that EMV is a dated solution to older problems - the momentum of it existing in much of the world, coupled with the... shall we say obstinacy of the major networks refusing to acknowledge this and doing their best to politely force it down out throats... will compel a good deal of migration in the U.S. And my feeling is once it has its foot in the door, we will slowly, sadly, kicking-and-screaming - migrate.

Now, is there a good chance it could be delayed by moving back the liability shift deadlines? I'm a betting man - and might take that bet... But avoided completely? I wouldn't take that bet.

Happy New Year to you!
Wed, 02 Jan 2013 09:17:09 -0600 Ted Josephson http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1534090 http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1534181 Just a clarification Karen. When you say "fraud rates are low, the system is able to eat much of this for credit and a lot of debit" do you mean that the costs of preventing, detecting and recovering fraud are passed on in merchant fees or do you mean they are passed on to consumers? Wed, 02 Jan 2013 04:23:06 -0600 Dave Birch http://www.pymnts.com/commentary/pymnts-prophecies-our-take-on-eight-2013-predictions/#PageComment_1534181