Industry Debates Next Great Alternative Payment Solution at SF Summit

BURLINGAME, Calif. – The Alternative Payments Systems Summit just wrapped up here at the Airport Hyatt Regency, and the recurring theme was not “if” but “how will mobile change the face of payments?” A host of industry analysts, payments executives, retailers and mobile ecosystem players met here over the course of two days to exchange ideas and engage in debate on the future of retail payments systems. If there was one conclusion, it was this: Mobile payments are coming to consumers and retailers alike, but perhaps not in the way most people thought.

Many of the conference participants and featured speakers pointed to the emergence of mobile payments as an inevitability. Mobile devices are now ubiquitous, their utility is clear and they are more user-friendly than ever. They create an interesting and clear opportunity for a technological and social link among consumers, retailers, advertisers, operators and financial institutions. The vast majority of the conference participants also agreed that the challenge with mobile pilot trials to date, particularly those based on NFC capability, has been that they have not always solved for a unique consumer need. As one conference participant said, “NFC has always seemed to be a solution in a search of a problem. What exactly is broken with my mag-stripe card?” Retailers also cited caution in the face of POS changes for what strikes many as a simple extension of the current mag-stripe business model. Interestingly, during a retailer panel, more than one conference participant pointed to mobile as a significant opportunity to re-craft the structure of the payments business. Many see NFC-based bankcard payments as a simple extension of the current economic model into a technology they see as a change agent.

While there was certainly healthy debate about the how mobile payments would migrate to the point of sale, the conference speakers and panelists were almost unanimous in their forecasts for mobile devices to begin changing the world of retail payments in ways big and small over the next 12-24 months. Some believed tablet devices connected to mag-stripe readers would become the new mobile retail points of sale. Others pointed to carrier billing and card-based alias checkout solutions as the way consumers would execute remote purchases. Still others look to in-store remote checkout solutions – filling a shopping cart in a store and paying for it over the Web – as the vision of the future. Maybe taking a photo of a 2D bar code at an IP-enabled terminal will become the most prevalent form of mobile proximity payment at a physical point of sale.

Everyone here agreed that the future of mobile payments adoption is fast approaching. How it looks and what form it takes, we’ll have to wait and see. But, to listen to the folks here at APSI 2011, we won’t be waiting long.