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Mobile payment terminals face slow but steady climb

02 Dec 2013

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Several companies showcased their new mobile point-of-sale products at this year's CARTES Secure Connexions event in France, reflecting a growing segment of mobile payment terminals. Mobile phone applications that support near field communication technology gained special attention at the exhibit, exposing participants to various prototypes and recently launched electronic payment solutions.

All established POS vendors had a mobile merchant version on display, often a mock-up device still under development or ready for commercialisation sometime next year. But what's so special about MPOS (mobile point-of-sale) when NFC-based mobile phone applications have already been demonstrated for direct smartphone-to-smartphone secure payment transactions?

Well, the argument here is that there are many more banking card holders than NFC-enabled smartphone owners, especially in emerging countries where smartphones are still a luxury item. Even in Europe, if using NFC may well catch up for certain applications like transport, the use of smartphones in place of contactless smart cards is not widespread. Then only a fraction of NFC-enabled smartphone owners are fully aware of their phone's new capability, and they would still have to queue for the cashier to swipe their phone onto a contactless pad.

What's more, in Europe at least, NFC-based transactions would be limited to fairly small amounts. Unrestricted credit card transactions for chip cards are only authorised through PIN entry devices (PED) that comply with the current Payment Card Industry's (PCI) Data Security Standard (DSS). The PCI PED standard imposes particular security requirements for the keyboard, the chips and architecture being used and the display of the PED, which justifies the emergence of PED-enabled MPOS solutions.

Until everyone on earth becomes well acquainted with their smartphones, and before smart cards disappear themselves, there will be a growing market for secure card readers that can accept any type of banking cards (magnetic stripe or chip-and-pin) and connect directly to a merchant's smartphone, forming a completely mobile point-of-sale system, without requiring a costly cashier infrastructure.

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