Starting this summer, it is possible you can pay your Open Table check at a restaurant with Apple Pay or Android Wallet instead of a credit card. True, it’s simple. But in the Washington, D.C., area where I live, the service is only available at about 50 restaurants. At least it’s a step in the right direction.
These services were first introduced last fall — a similar offering from Samsung is still in the works — But getting retailers to accept is slow. In the U.S., you can use use Apple Pay or Google Wallet at Walgreen but you’d better have a credit card ready at Walmart or CVS. The Undergound in London has just added the system for service, but nothing like it is in New York or Paris.
For the public, moving charges from credit cards to phones or watches is mostly a convenience. But what really matters is what is going on behind the scenes. Information transferred over cards and other references exposes dangerous quantities of individual information.
Neither standard credit cards nor the tagged cards, just being added in the U.S. but used broadly in Canada, Europe and Asia for the past 15 years, help much. The new systems eliminate the information on individuals that must be transferred between individuals and retailers, a vastly better defense.
But retailers are very reluctant to take it up. One problem, of course, is the system works only with relatively new phones and it will take some years to completely reduce credit cards. A tougher factor, at least in the U.S., is a fight against the entire phone approach being pushed by retailers led by Merchant Customer Exchange, whose CurrentC depends on QR info on phones. So far, CurrentC isn’t available in the real world but merchants who have signed up for it continue to block Apple and Google.
The result is pretty strange. Consider an exercise by Target at its Metreon store in downtown San Francisco. The new Open House downstairs is a translucent home downstairs with a living room, bedroom, nursery, kitchen, garage, and a lawn, featuring a wide variety products. It makes extensive use of the Internet of Things devices — burglar alarms, fire warning systems, Sonos music players, fitness trackers, even Philips Hue LED lamps.
What’s missing from this system of 30 or so products? Any way of using new ways to pay for the products. Having all this stuff linked together is cool, but when doing business with Target, you have to pay for things the old-fashioned way. And this from a chain that has had extensive theft of customer information. Which is more important? Fancy displays or some real action to make retailing more secure?
Eventually, I think pressure from banks and credit card companies will force a move from credit card accounts to systems built on real service. Perhaps the extensive theft of retailers’ information will drive customers crazy (though the companies generally take the pressure off customers). Maybe the finance industry will squeeze the retailers hard enough. Maybe more massive threats like the OPM information may make the government start imposing proper security on public relationships. Or perhaps as more and more customers start demanding the use of phones and watches in place of credit.
Personally, I would love to get that wad of credit cards out of my wallet with replaced by my iPhone or, even better, an Apple Watch. I want a system where a card is no longer needed to swipe information.
In reality, it will take years until credit cards are fully, or even mostly, replaced. But the faster and harder it is pushed, the better off we, the retailers, and the finance industry will be.