OTTAWA – Ruth Thorkelson, senior vice-president of public affairs at the Retail Council of Canada (RCC), described merchants’ mood towards mobile payments as “neutral to frosty” because they don’t yet see the value. Plus, merchants aren’t likely to adopt mobile payments the way they have for debit and credit card transactions because of security concerns.
“There is a reason why we are the second highest debit users in the world: it was a 100% rock solid guarantee by every player in that payment chain that your transaction was secure. There’s almost no risk for the consumer. That’s why we have debit. And I would say that’s why we don’t have mobile [payments],” she said, speaking at the 2010 Mobile Money Forum being held this week in Ottawa.
“Somehow that’s got to migrate to a place where you can get the security of chip and pin and the security of debit and pin on a mobile application because right now mobile is a less secure transaction. And that means there is a higher fee associated with it. There’s greater risk for the merchant,” stated Thorkelson.
Merchants are also concerned that a new mobile payments platform could increase their business costs. Just as credit and debit cards carry transaction fees, the introduction of chip and pin credit cards, and debit products from Visa and MasterCard into the Canadian markets brings additional costs for merchants.
The RCC wasn’t a complete downer during its 30-minute presentation, though. Thorkelson noted that the payments industry is at a critical juncture where rapid technological innovation could bring about a new paradigm for payments in Canada. But merchants want a seat at the table in determining how this new payments paradigm plays out.
“If there is a common, collaborative platform that addresses authentication standards, consumer safety or security of their financial information, and the sharing of information, we feel that there is an opportunity for merchants to buy into this,” she said. “What they really want is some sort of security that they can adopt a technology, feel secure that the customer’s financial information is safe and there is shared risk and interest in the system.”
Merchants don’t want to think about technology, Thorkelson added. “They don’t want to make a bet on technology: VHS or beta or DVD or BlueRay,” she said. “We’re trying to identify how we can bring comfort to our merchants to drive acceptance [for mobile payments]. Right now there is no comfort.”
Next week, Cartt.ca will provide additional coverage of the 2010 Mobile Money Forum, including Rogers Communications’ vision of the Mobile Wallet and PayPal Canada’s mantra that mobile is the “next web.”
