A key factor why all these project failed wasn't the technology. As you rightly point out, the technology was already available back then. It was mainly the vast differences in business models in the two industries: telcos and banking. The telcos were spoiled back then and expected any service to deliver a margin of at least 30%. Banks operated on a very different operating margin for the transactions. They never got that reconciled.
I remember back when Apple introduced Apple Pay many people were stunned by how little they charged. But in the end, that was their key insight to make this work. Quite impressive from a company with very high margins on their core products.
Sorry for the passion but i was involved in the mobile payment scene at the time. It was not the banks halting the development of mobile payment. It was: 1- Apple 2- MNOs (Mobile Network Operators) 3- Samsung
Apple closed off the iphone NFC api which dried up VC funding in the mobile payment scene. This is one of the reason we have QR Codes everywhere today, and not NFC tags.
To securely process mobile payment, you needed to have a secure enclave (SE) on the phone which would keep encryption keys safely. At the time, the MNOs wanted that secure enclave to be the SIM card, so they could control that space. Google retaliated by cutting some circuitry between the SIM Card and the phone: the SWI lines. Banks were charging north of a million $ to embed applications in the SIM Cards, and were charging you the same for any update. Apple at the time started charging 4 million $ as a deposit to acquire a special nfc permission (walmart and starbucks had one) to emulate a credit card.
Samsung was the worst. They were already embedding a Secure element in their phones without giving access to it. They started 2 or 3 years ago giving access to 3rd partys.
Yep, this was my experience as well, working in the NFC space at the time. Apple also basically forced the whole IoT space to start focusing on QR codes instead of NFC tags, because they were lagging technologically with the iPhone.
Some links: - https://developer.android.com/guide/topics/connectivity/nfc/... - https://xamoom.com/new-nfc-capabilities-for-all-iphones/
Apple is a company with a clear focus. They didn’t even support MMS in the first iPhone. Rightly so.
Pretty impressive backwards compatibility, although I think the original copy-to-paper mechanism is finally being phased out, since some new credit cards no longer have raised digits. (My new Visa from Chase has the digits on the back, and they're only slightly embossed and not in the same place. Probably wouldn't work with the old swipers.)
I wonder how long until magstripe is phased out?
I've seen this still happen occasionally in taxis - or rather I saw it happen within the past decade. When I last lived in the states I'd bump into it especially with rural taxis - I assume it's dying quickly though because it's incredibly inconvenient when compared to paying via an app or tapping.
The lack of raised digits is actually a serious issue for legibility, I've had the digits fully rub off on some flat-printed cards - this may have been a low quality printing issue but either way I wouldn't applaud it being adopted since the raised numbers make it easier to read by eye.
(Edit, just to clarify - I get out of the Taxi on the other end guilt free because the driver lied to me about payment options. I don't like skipping out on service payments - I think people should be paid fairly for the work they're doing (even if I could get away with not paying)... but if you're lying to me you're doing me a disservice)
We didn't have cash, so we just left. The woman was furious. We hadn't received our food yet, but it was already being cooked. She screamed at us to go to an ATM a few blocks away, get cash, and come back. We just found another restaurant. If the card hadn't worked I would've felt bad and probably done that, but she wouldn't even try it. Don't advertise that you take credit cards and get mad when customers try to use them.
Just because the terminal has a magstripe reader on doesn't mean her merchant account provider accepts it. Plenty don't, or some transfer the liability to the store in that case.
> If the card hadn't worked I would've felt bad and probably done that, but she wouldn't even try it. Don't advertise that you take credit cards and get mad when customers try to use them.
In 2014 a card that doesn't have a chip might as well be broken. I don't think you can put this one on her.
2014. I don't remember with 100% confidence, but I'm pretty sure none of my (many) credit cards had a chip back in 2014.
Stores here didn't even start installing chip reader card stations until ~2018 or so.
Chips were basically non-existent on US cards in 2014.
I'm not Norwegian but it'd be pretty similar up here in Canada at this point - if your POS terminal gets damaged and your mag stripe reader breaks there isn't really a big reason to immediately shutter your store and replace it.
It was super depressing at the time to hear the Libertarian crowd come out in staunch defense of this program.
1. https://www.independent.co.uk/news/world/uber-uses-secret-pr...
Look up the definition of "regulatory capture," and you'll see a photo of a taxicab, or at least you should. When the law does not respect the people, the people will not respect the law... nor should they.
On the back though it has a lot of details about the account, who I am, validity and so on, so all the same data is on the card, just not on the front and not embossed.
Current era bank cards aren't bright enough to change their numbers though, many of them are scarcely "smarter" than they were when they were completely passive, just barely enough going on to make it trickier to counterfeit them, not really any attempt to actually make that truly impossible for the majority of banks and customers. From the bank's point of view if they spend $5 per card to avoid $3 per card of fraud, they wasted $2 per card, and if half that fraud lands on the customer (because Mrs Smith didn't notice or the bank successfully prevented her claiming her money back and blamed her for the loss instead) they wasted $3.50.
The Apple card doesn't display the number anywhere on the card at all.
I disagree with this. The new-style card numbers are printed in a much more legible typeface, with more contrast than the old raised numbers. Much easier to read IMO, although the blind may disagree! I've had no issues with the ink wearing off on any of my cards.
In the Authorisation step, the merchant on behalf of the network can decide whether you, the supposed card holder, are authorised to make this payment. For example if you have Chip-and-PIN this is the step where a PIN failure means they won't give you the bottle of whiskey you just pointed at through the glass.
To be effective Authorisation must happen up front. With Chip cards, (and also contactless payment) this can happen even offline, because the Chip can carry policy decisions like "Offline payment of up to $10 each time, $100 total before I talk to the network is OK, after that No more until I see a network" inside it.
Impression machines were the very most rudimentary type of "Authorisation", the impression recorded is some evidence they actually saw your card. Or a card embossed with the same numbers, at some point. Modern networks don't want the useless paper trail which results, but some impression machines are still out there and hey, it felt like a "real" card payment. The fact they're essentially useless doesn't matter because...
The Settlement step is separate, and often happens hours, or even days later. In this step the Merchant says, hey Payment Network, I'm Some Big Merchant and I want $123 from your customer #9876.
You might think, aha, and now they provide details from that authorisation right? Right? Nope. It's totally unauthenticated, subject to all manner of glitches and mistakes, and it is based entirely on trust. The big merchants are rich, so, if they sometimes lie and steal that's OK. Whereas if you, Mr Wage Earner, don't pay for that can of Pepsi, you're a criminal and you're going to jail.
If some merchant in say, Spain decides you just spend €546 on a TV with your card, even though you've never visited Europe, that just works. Left to itself, €546 plus conversion costs goes on your card account. To reverse that you'd have to notice the €546 charge, call your bank and complain about this clearly fraudulent card transaction. They're not always going to magically detect it, they should have some anti-fraud pattern matching e.g. if that store suddenly claims everybody living in your town in Ohio bought a TV from them, that's suspicious, it probably doesn't go through, and hey if you never visited Europe maybe that's enough to block it, but not necessarily. The responsibility sadly always stays with you to report any bogus transactions that get through even though the Card Networks made barely any effort to prevent fraud. So, read your card statements.
5 payment modalities with a thin piece of plastic.
Master card said they will start phasing out mag strip in 2024.
Soon enough tap/dip will be the only way.
Cards still have magstrips on them but I can't remember the last time one got used. Maybe a gas station.
Australia has just 6 banks. And they have a history of collaborating on things like this - since a fluid economy raises all boats, and fraud hurts them all. All Australian cards and point of sale systems support chips and taps. And have for nearly a decade.
Was? Most of the ones I use are still magstripe-based ("remove your card quickly"). Only occasionally it says "leave card inserted" which is where (I assume) it's talking to the chip.
But the chips are relatively flaky and often don't work. At least here (California) after three failed chip communication attempts, the terminal allows a magstripe swipe instead as a backup. Happens quite often.
I actually had to do this in 2013! Working as a waiter at Chili's, whenever the power went out (happened once or twice the year I worked there) we'd dig out a quite heavy apparatus and make carbon copies of the credit cards. Every time I used it, my customers commented they'd never seen such a thing before (I suppose the clientele was either too young or had bad memories).
Earlier last year, I was at Shake Shack when their online payment system went down. They decided to just stop charging people (even if they had cash!) and gave out free meals. I much prefer that system.
I've noticed all the UK-issued cards I've received in the last year or two no longer have the raised numbers. Just the same details printed in ink on the card. Quite an improvement as the card details are easier to read now!
Still seem to have the traditional (but almost never used) magnetic stripe, however.
I'd say maybe it raises fraud alerts faster, but I had a friend who did this for every credit payment for like two months before she finally had them replace her broken card. (No idea why, since it was free.)
Yeah, this used to be the case (years ago) in the UK too. But now days, most card readers no longer have magstripe readers on them. The chip is the backup now in case contactless fails!
Wait what?
I think in many parts of the world that isn't possible anymore for a long long time. Like all of EU.
It will be many years before US merchants truly phase out accepting magnetic strips.
And when the pressure-stamp machine broke, the merchant would use a pen, and write the card number by hand. No problem.
Each year there seems to be fewer reasons to carry a wallet around. Cash? Killed by covid. Card? Apple Pay. Drivers licence? There’s an app for that. It won’t be long before wallets are entirely useless.
You'll want a Faraday cage for any contactless cards.
It’s been like this for several years now - and tap to pay has basically been the default (for purchases under $100) for even longer.
I went to England in 2019, at which point cards in the US had been updated to use magnetic stripes, and everyone was using tap-to-pay. It turns out my credit card had tap-to-pay support as well but it wasn't widely used in the US (or at least in my sphere). Now it finally seems common-enough here.
I'm planning another trip to Europe in the next year... Really eager to see what payments look like nowadays.
Of course huge amounts of stores offer contactless paying, but generally Cash is still dominant around here. Change is slow, and currently, Cash is still king, especially with small or street merchants.
For many small businesses non-tax registered money is the lub which makes them run well.
Jokes aside the price of getting a card terminal where for many businesses completely unattractive for a long time and often still are if put in context to the number of people which will use it.
I know one local takeaway which stopped accepting card payment after their terminal broke recently, as it wasn't worth it to buy a new one. Instead they now allow sending money by PayPal, but non-advertised and mainly for a single specific big recurring customer and sometimes if someone doesn't has cash with them.
Smaller stores or restaurants, forget it. Bring cash.
One thing that is annoying for foreigners with credit cards is that they are barely accepted here. We work mostly with Maestro and almost all Dutch e-commerce sites work with Ideal which directly link to the banking apps of the local banks.
My wallet does not contain any cash anymore and just an ID and OV card.
https://www.linkedin.com/pulse/dutch-payment-landscape-one-m...
The problem is that they have a local exchange there, and do not have cross agreements with all of the payment vendors (not at the Visa level, but bellow that). It was annoying, and caused us a lot of hassle. I am not sure how we could have avoided it.
Normal Mastercard/visa credit don’t work here since shops have to pay way higher transaction fees while almost nobody uses them.
https://en.m.wikipedia.org/wiki/Maestro_(debit_card) https://en.m.wikipedia.org/wiki/V_PayPlease
It will be phased out though in 2023 to Mastercard debit and visa debit so likely in the future Netherlands payment system will be more aligned with what other countries use.
That sounds like an absolutely terrible idea. Why would we give these two rotten-to-the-core companies such power over our payment systems?
Maestro and V-PAY already _are_ owned by those two companies, and are debit cards. What changes with Mastercard/Visa debit?
:-)
I haven't touched cash ever since covid hit, and very rarely before it.
Fred Meyers here in WA still doesn't support contactless payments (QFC, owned by the same company, does, however), annoying since I still have to shop there often.
Yeah, that was my experience as well.
> Fred Meyers here in WA still doesn't support contactless payments (QFC, owned by the same company, does, however), annoying since I still have to shop there often.
I've largely had good experiences all over the midwest, but there are a few Stripe card readers that advertise "contactless" but don't actually work (probably misconfigured?). I've been traveling around AZ recently, and I've found a few POS terminals that don't support contactless at all, strangely. But overall they seem pretty widely available.
Some Freddy's do, at least intermittently. A few weeks ago, the one in Lake City had it enabled on their pads at the self checkout and I successfully used tap. But when I went back a week after that, tap was turned back off.
Kroger uses their smaller brands as testbeds for stuff and since QFC is somewhere in the bottom five for size-of-Kroger-operated-brands, I guess it makes sense.
It’s annoying I have to carry a credit card, driver license (WA doesn’t support digital licenses yet), and an Orca card (also, annoyingly not phone compatible yet) in the wallet MagSafe attachment for my phone.
From my personal experience, there were roughly about 80% of shops in NYC, up until the beginning of pandemic, that did not accept contactless or where it did not work. One particular supermarket next door had the proper POS for 3 years and it still wouldn't work even this May when I left.
The restaurants were even worse.
I always forget about contactless. I think all my cards can do it? Not knowing for sure is why I never try, and just stick the card in the slot, which always works.
I think I've paid with my phone one time ever. For some reason I can't bring myself to trust it to work 100% of the time so I can leave my cards at home, at which point I may as well just use a card since I have 'em anyway. I guess I could start carrying phone + cash as a backup and skip the cards, but that's even less convenient. I do activate the payment screen (iPhone) all the time by accident, though I couldn't tell you how.
(I'm not even that old...)
I always called this "chip". My UK friends called it "chip-and-pin" in 2012. But yeah, no idea what the technical or widely-accepted colloquial terms are.
> Not knowing for sure is why I never try, and just stick the card in the slot
Yeah, for some reason the UX for contactless is terrible. Sometimes something will show four evenly-spaced green lights (and sometimes they're blue--in any case, why does that mean "contactless"?) but often those lights don't appear until you attempt a tap-to-pay and then they might be delayed by several seconds. And even then, occasionally the hardware malfunctions and can't actually handle tap-to-pay. These hardware failures seemed to be way more common in the early days, but now almost everything does support tap-to-pay--you just often can't tell until you try which is just the dumbest thing ever.
> I think I've paid with my phone one time ever. For some reason I can't bring myself to trust it to work 100% of the time so I can leave my cards at home
I definitely do it as a last resort, but I've done it a few times (e.g., if I forget my wallet). Mostly on iOS I'm often trying to pay quickly and I try to activate the contactless payment but I'll end up turning my phone off or I'll try to bring up my card before my phone is close enough. The uncertainty always makes me feel way more anxious than it should and it's just less stress to use a card (cards also don't run out of batteries).
Having an Apple watch helps out a lot here. I can't do it on my phone either, but on my watch it is trivial.
Whenever "your transaction" begins at the register could be when you're eligible to present your payment to the terminal.
I generally pay with the apple watch if the store supports it (most seem to, nowadays). It is more convenient than reaching for the wallet since the thing is in my wrist anyway.
The tech was mostly there a while ago, but hardly universally supported. This is one tech area where the US has definitely been notably behind the curve.
Besides that, literally everywhere allows contactless payments. Even Visa/Master is changing their card designs to move vital information to the back of the card to prevent information theft via hidden cameras or a very keen eye.
In my experience on such rare few occasions I was able to tip with Venmo.
I'm sure whatever country you're from (or otherwise alluding to) is a fine place, no need for the transparent insecurity. :) Narrowly, I agree that secure (and fee-less) bank-to-bank transfers would be preferable to CC.
> They are required for the CC transaction, this adds an additional player that should not be necessary.
We're positing a situation where CC's aren't available, so it's not an additional player but rather a different player.
A misstatement by me, still they are extra to what should be a bank to bank matter.
Good thing is you can actually use Apple Pay, I use my Watch to pay for stuff all the time.
You have to have a foreign bank account that supports it, I use Wise since it allows Turkish customers.
Beware, since covid, use of cash has dramatically fallen, last month a restaurant struggled to give me 2€ change, they didn't have 2€ in cash ! Paying in cash with the right amount should never be a problem though.
Spend is kinda hilarious - in supermarket checkout "can I pay $150 in cash and remaining using card?" just so you don't have to deal with coins.
I can't wait to live in a 100% cashless society but I do think that the process should be refined (especially for phone payments).
Atm I tap and often have no idea if I'm really paying exactly what I should be. Credit card/debit numbers should only ever be temporary and for a given amount to a given merchant (like how my bank requires generating an OTP when adding a new payee). Confirmation that we are paying x merchant £y is definitely required.
Current system is really weak in that if someone has my credit/debit number they can arbitrarily charge me, in the UK if someone has my sort code + bank they can use that at a business to create a debit request and I get arbitrarily charged.
It's weird getting pitches from US FinTechs that are solving problems that literally only exist because of how painfully backward that US financial infrastructure is.
However, most merchants now have terminals that accept contactless mobile payments without a limit -- Tesco were one of the last to upgrade. So if you pay with your phone then you're back at risk of forgetting your pin.
I'd quite like it if there were some mechanism for setting device spend limits, as my smartwatch will do payments but with only a pattern for security it doesn't matter that I'd be happy only using it for sub-£5 payments: it'll quite happily authorise much more.
Unfortunately this is one of those cases where being among early adopters wasn't an advantage, in many areas of Italy cash is still the only viable payment method.
cough tax avoidance cough
Also friction plays a part, Italy is the second oldest country in the World on average.
My mom uses electronic payments, but I haven't been able to teach her how to pay online or "tap to pay" no matter how hard I tried.
I won't even start to talk about my dad, who doesn't even own a smartphone or a mobile phone before the smart ones existed.
They prefer to go to the ATM and pay cash, their lifestyle is very far from globalized even though they are strongly against tax evasion and always ask for their receipt.
Ironically I've know about Telepass because my parents have been using it for as long as I can remember.
My guess is that they trust Telepass because it's backed by a (former) public institution, Autostrade, but they don't trust mobile phone manufacturers or payment processor companies as much.
I'm not sure they are completely wrong.
I used this payment processor in utah in the early 2010s at Jamba Juices and a few other random places. It was pretty sweet but its name was Isis and that was right around the time Isis started becoming big and I believe they ended up dying off.
Avoiding the Isis name was even enough to change the story line for the animated show Archer.
I'm currently on a trip back to Australia and I forgot my wallet (!!), but it's fine because I just use Apple Pay everywhere. It's never once been a problem.
The only thing they have in common is the physical action of "boop boop" at a terminal or scanner.
It's still got the "contactless" part, though.
I'm pretty sure it was a tap to pay with the app. I can't remember if the other device was also iOS. It was definitely not the kludgy QR codes like it is now.
I thought it was so cool, but it never caught on. I read a while later that PayPal was licensing that tech and let the license expire.
I know of multiple pilot projects and startups which where basically killed (or majorly revamped) because just supporting Android wasn't viable and Apples not showing any intention to support NFC.
The fact that the NFC we have now is missing a major feature of original NFC isn't helping either (the ability to act as a NFC card if the device it's embedded in is powered of/out of battery).
I was ready for this in 2005.
https://money.howstuffworks.com/personal-finance/debt-manage...
If course as the article points out, it wasn’t even new technology back then:
“ Not Exactly New Tech Mobile introduced the Speedpass in 1997. Speedpass is a small device on a keychain (called a fob) that users wave in front of the Speedpass logo on gas pumps. The cost of the gas is automatically deducted from the user's Speedpass account”