Mobile payments are the new trend among major technology giants like Apple, Samsung and Google – all developing their ways of making payments easier and convenient for the end user. The recent launch of Android Pay, along with new security enhancements with the new Android version named Marshmallow has caused quite a stir among enthusiasts, and Samsung Pay is also garnering a considerable amount of attention. These developments are often looked at with interest because of the surrounding hype, and the excitement of putting into use a new technology, and how this technology can improve becomes a favorite topic of discussion among the enthusiasts. But they are a very minute percentage of the general mass. Although the technology is brand new and looks cool, questions arise whether it is financially feasible in the long run, and even if it is, whether these bleeding edge companies are ready to wait for the technology to mature as mainstream.
The prime cause for concern is the new transaction laws in Europe. Launching these services in Europe will be a tough call due to the massive inconsistency in interchange fees between the two countries. The new laws, in effect from December, are set to reduce interchange fee to 0.3% for credit and 0.2% for debit transactions. The new rate converts to a 300-500% less revenue for banks, and ultimately for companies like Apple and Samsung. With commercial opportunities reduced, it will take more time, patience and effort for the new technology to take off than in other parts of the world. Technology giants like Apple are known for their innovations and bleeding edge technology, but their rarely known to wait long for a technology to mature and be mainstream. They are also beginners to the finance sector, and will be hitting a lot of bumps ahead on the road.
Another factor inhibiting the acceptance of this new mode of payment is the fear in users regarding new technology, especially because it involves money. The risk elements they perceive, prevent them from using new technologies on a daily basis as a spending system, wary of fraud and other risks, as they are not aware of the safety measures in place. Contactless payment technology as we know it was developed in 1996, and it has taken almost twenty years for the technology to be widely accepted.