WHO ARE THE BIGWINNERS AND LOSERSWITH MOBILE PAYMENTS? So... if everyone is going to switch to mobile payments and move away from cash and traditional credit cards, are the credit-card companies done for? The reality is the opposite... The major credit- card companies are the only guaranteed winners in mobile payments... You see, regardless of whether you’re using an Apple iPhone or an Android phone... regardless of which bank you use... Nearly all mobile payments are ultimately processed by the major credit-card company networks – particularly Visa and MasterCard. Instead of losing “market share” as people move away from cash and traditional credit cards, the major credit-card companies will do the opposite... They will gain market share, as more payments will pass through their networks. What about PayPal? It was one of the innovators in new payment methods decades ago. And I don’t know about you, but I use PayPal all the time... PayPal is just so much more convenient than paying with a credit card in many cases. You can often buy instantly (like on eBay) or with just a click or two. Meanwhile, buying concert tickets with a credit card often takes five minutes, and you have to type all your personal information into yet another website. I would prefer not to do that.
The major credit-card companies are the only guaranteed winners in mobile payments.
It’s quite unexciting. There’s no digging in your purse, no fumbling for cash and credit cards, no card swiping, no signing, and no fumbling to put everything away. Instead... nothing happens. You hold your phone... and then... you’re done. But what’s going on behind the scenes? This is where it gets good... You see, the magnetic strip on your credit card carries your name, account number, and expiration date. When you swipe it at a store or restaurant, you relinquish that information over to the merchant. And that’s the problem... Now your data are out there, and hackers can get to them. However, when you pay with your phone, nobody can see your name or your credit-card number... because they weren’t ever shown. That’s what makes this safer than pulling out your credit card... With “tokenization,” your name and your credit-card number never appear – therefore, this way they can’t be stolen. I hope you’re coming around. I hope you realize that this change is coming. Because the next thing we need to do is find the top ways to profit. Not surprisingly, the biggest winners will continue to win...
62 | September 2017
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