Data ownership vs. transaction fees
We’ve recently witnessed announcements by MCX, a US-based association of retailers led by Wal-Mart (cf. Smart Insights Weekly #13-05) and by Oney Banque Accord in France (cf. SIW #13-03), announcing they planned to develop their own payment systems. Both of them said they decided to do so to make sure they kept control of their customer-related data.
There might be other reasons: retailers are loosing patience after too many years of trumpeting announcements for NFC-based wallets that have not yet succeeded in converting into mass consumer adoption. Also, retailers do believe that by turning themselves into payment service providers, they will be able to perform payment functions for a lower cost than the usual transaction fees charged by financial institutions, and the payment community globally.
However, any payment system needs to be secure to protect the consumer, the merchant and all stakeholders; the reason PCI SSC is costly is because security is a complex issue. Developers of new payment systems, will soon be facing security issues, and will need to ensure their system is secure. They will have to support the cost of security, and at the end of the day, may come to better solutions than 2D-barcodes.
So, even if the merchants, who position themselves as new-style payment service providers, start with 2D barcodes, let’s bet they will come to secure transactions technologies sooner or later.