FEIG ELECTRONIC

FEIG ELECTRONIC: Will the Mobile Phone Become the Medium of Choice for Mobile Payment?

Articles | By FEIG ELECTRONIC | 03 April 2014
Short queues at the entrance to the football stadium and at the catering stands are important criteria when visiting the stadium. This is one of the results of an online survey, conducted by Earsandeyes among 500 German first league team fans.Among the additionally interviewed 557 fans from Mainz, Wolfsburg, and Ingolstadt who use the contactless system of Geldkarte and Girogo at their home stadium, 71 percent find that payment is faster, even 76 percent say it was more convenient, and 73 percent emphasize that the chip was very practical at the stadium. Short queues at the entrance to the football stadium and at the catering stands are important criteria when visiting the stadium. This is one of the results of an online survey, conducted by Earsandeyes among 500 German first league team fans.Among the additionally interviewed 557 fans from Mainz, Wolfsburg, and Ingolstadt who use the contactless system of Geldkarte and Girogo at their home stadium, 71 percent find that payment is faster, even 76 percent say it was more convenient, and 73 percent emphasize that the chip was very practical at the stadium. Photo: FEIG ELECTRONIC

Micro Payment and Data Security

It is the customer's decision

Card-based NFC payment systems are further expanded. Currently, mobile payment is not yet a secure alternative

Girogo, the NFC payment system of the Deutsche Kreditwirtschaft, was brought underway in 2012. Meanwhile, the goal is in sight. In technical terms, a complete change of card reader generations is taking place, and all new readers are capable of reading contactless cards within the next five years, as Frithjof Walk, Feig Electronic, is convinced. With an increasing number of use cases, the user will benefit more and more from the advantages of contactless payment.

Girogo had a promising start. Now it seems as if there was less momentum behind the initiative. How do you, as providers of contactless readers, feel about Girogo starting up slower than expected?

Girogo, as the successor of the Geldkarte, started out very strong in the pilot phase. “The Deutsche Kreditwirtschaft“ as initiator, was a major driver at the beginning of Girogo. Of course, we, as one of the companies that want to supply hardware for this project, are a little disappointed that halfway down the road the project took a step back as obviously its momentum was reduced. The reasons why, I cannot assess. Like in all large-scale projects, there are diverging interests. In fact, we are not happy that things are proceeding slower than we hoped they would. Yet we are making progress.

The U.S. and some European countries are more advanced in the field of contactless and NFC payment. Too hesitant, too sceptical – is that also due to the German mentality that innovations spread less quickly?

In the U.S., credit cards are in general used more often and more naturally. In Germany, the situation is different. Cash is still dominating here. When a new payment system is established, it has to be secure in the first place, because ignoring well-known risks would be simply negligent. We see that the issue of data security is gaining more and more public interest. With regard to the latest incident of millions of stolen data records in the U.S. it seems impossible to me at the moment that there will be a big discussion in the near future. Sooner or later it is up to the user. In this concern, every user has to decide on their own, how important they consider security.

What will be the right way of establishing new payment systems?

Frithjof WalkFrithjof Walk“Who dares, wins“ would be a good motto. It differs to a certain degree from the German and European approach. Not to start at all is not the answer, either. Theory does not provide any evidence. From my point of view, the middle course would be fine: I have to try out an innovation in order to obtain any results. I cannot correct any decision I did not even make. New systems need to be tested properly and intensely for stable evaluation and low risk. That is what we do in Germany. The consumer‘s tolerance level is very low when suddenly 20 Euros of credit disappear. I think this is not just a question of mentality.

What is your perspective regarding the timeline: How can market penetration be accelerated?

It has already been accelerated. We can assume that all payment terminals entering the market within the next five years will be equipped for contactless technologies – all of them, without any exception. The technical revolution, a complete change of generations, is already happening and progressing quickly. For us in Germany, only a small detail changes: The medium becomes a different one. The communicative infrastructure is in place, what‘s missing is the infrastructure at the checkout.

Still I am sure: The technology and the cards will be on the market relatively quickly. That still does not mean cashless or contactless payment will necessarily be used more often.

Your evaluation of mobile payment: Will the mobile phone assert itself?

In a certain way, every kind of payment is mobile – the card and even cash. However, I am skeptical as to whether or not the combination with the smartphone is the right way. At the moment, I do not think that the majority of users want to make payments with their mobile phones. The option may seem attractive but the smartphone is not the most secure device. There are just too many big security gaps in the systems. Just like prominent incidents just proved. The card is the significantly more secure medium. That is why in the short term I do not consider mobile payment as an option. How payment with the mobile phone will develop in the long term, however, and whether this is the right way which the users will follow, is hard to forecast right now.

Last modified on Monday, 02 March 2015 10:23
RFID & Wireless IoT tomorrow 2019
RFID and Wireless IoT tomorrow 2019Europe's largest congress for RFID & Wireless IoT
October 29. - 30. 2019
Darmstadtium, Darmstadt near Frankfurt, Europe
Conference | Exhibition | Live demos
We look forward to meet you!