Small business and contactless payments

{Android, Apple, Samsung} Pay AFAICT all implement NFC contactless payments (aka Paywave) in a similar way, so that people can pay from their mobile device, instead of their plastic card.

For the public and well myself, this offers me convenience as I don't need to physically carry my brittle plastic Visa card around with me. One less thing to worry about. Furthermore, I'm going to assume that since it's paying through my mobile, the mobile can keep records of purchases, which is really difficult to do with my bank's online banking application.

For {Google, Apple, Samsung} this is awesome since they inject themselves in this lucrative payment process. The reason AFAIK why they have taken so long to launch is that they have been busy negotiating with banks on their fees for the convenient value their mobile platforms provide. It's a fantastic money spinner for the platform owners, and all they have to do is collect the customers credit card information and relay it via NFC come payment! I'm willing to bet they won't let any App developer get a piece of this pie by blocking access to the NFC.

Apple pay wallet in Singapore


Is it any more secure?

Tbh, I thought contactless payments were based on something you have and it would appear that this is not the case. {Android, Apple, Samsung} Pay just need to know your credit card details and away they go.

UPDATE: I'm told there is some token exchange with Visa or the bank but I can't find clear description of this. The token itself is stored on the "secure keychain" (aka "trusted store") of the mobile device, and can only be unlocked with your fingerprint.

What about merchants themselves?

I feel small business are the ones that really suffer here. Even for those who rent an expensive compliant terminal, they often do not accept small ticket items under 20SGD (which btw violates their agreement with Visa). Why? Because the bank fees are just too high.

@kaihendry for large merchant debit is about 8p I think, for small merchants could be as much as 25p or so?

— Dave Birch ︎ (@dgwbirch) May 26, 2016

For big merchants like Starbucks, this is not an issue, but for small merchants who are selling an item for 5SGD... about 50c, i.e. their profit can be swallowed up by a contactless payment fee!!

What I'd like to see

Clearer competition

It doesn't help that no bank has clear pricing on their payment terminals and it's usually up for negotiation. But since the whole B2B sales process of onboarding can take weeks and is incredibly painful, by then as a small business you might be too exhausted to negotiate.

It also doesn't help that the way terminals are sold is extremely complex. There are setup fees, rental fees, minimum fees, percentage fees. It can be incredibly difficult to work out and it desperately needs simplifying.

Better security

Maybe there is security I'm unaware of in the {Android, Apple, Samsung} Wallet. My concern is that anyone can copy my card and start using it in their Wallet app. Please tell me it's not that easy!!

UPDATE: I'm told there is one card for one wallet, though I can't find clear description of the security of this.

Terminals that are mobile phones

A lot of terminals still do dial up verification which takes too long. I don't see why a 4G enabled iPhone or Android phone can't be used instead of a terminal to help the small business to take payment!

Help small businesses !

No Visa / Mastercard

AFAICT {Google, Apple, Samsung} ride ontop of Visa/Mastercard's network for integration. Why can't they skip them all together?

Costs ultimately for small businesses to take convenient payment are not decreasing AFAICT.


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