The door is open for increased adoption of digital wallets and other commerce service.
02 Feb 2014
Until recently, many in the credit card world said EMV (cards with a chip and that require a PIN) in the US wouldn’t happen in the next 5 years. Those minds are changing after the recent breeches which compromised the credit card data of over 100 million consumers.
A congressional hearing this week focused on the issue, and EMV was mentioned several times as a way to improve security.
The fact that it was multiple breeches and not just one neglectful company was an eye opener. Consumers no longer have confidence in magnetic stripe cards and are demanding to pay differently. The credit card industry has received the message and will obviously be pushing a card centric solution. Look for them to begin pushing EMV enabled credit cards in a big way.
Banks are reluctant to make any changes given the cost involved, but they will ultimately bend to consumer’s pressure and will adopt methodologies demanded by consumers.
This situation has also opened the door to digital wallets and other digital commerce innovations. Digital wallet solution providers (PayPal, ISIS, MCX, Google, Paydiant, etc.) have been waiting for consumers to be willing to change their behavior. The recent card breeches have opened that door.
Wallet providers need to polish their solutions, invest in marketing and connect with consumers. They should let them know that another card based solution is not the answer. Even bankers are admitting that chip-and-pin might not have prevented the latest breeches.
But if digital wallet providers and others don’t move quickly, the credit card industry will convince the consumer that EMV is the answer and the opportunity will be missed.
Non-payment based digital commerce solution providers (offers, loyalty, payments, pre-paid, virtual currency, etc.) also have an opportunity here. They should connect with digital wallet and payment solutions and look for partnerships where they can jointly connect with consumers and tout the virtues of digital commerce.
The entire industry needs to band together and take the message forward that plastic card based solutions are “old news.” Improved security can only be achieved by innovations provided by smart platforms like cloud based solutions.
Now is the time for the digital commerce industry to educate consumers on their options and to grab a larger share of the market. No more excuses.