Payments By Touch Reaching Out For You

from the touchy-feely dept

The promises of contactless payments consistently seem to fall a bit short. The hardware costs for merchants sound hard to justify, and the benefits to the consumer are usually minimal -- since credit cards aren't exactly a painful process to begin with. However, wireless technologies are cool, so NTT DoCoMo has demonstrated a prototype phone that uses human conductivity to transmit data for services such as payment-by-touch -- so that you can keep the phone in your pocket and simply touch other devices to transmit your personal information. But if the irrational fears of cell phone radiation weren't enough for you, then imagine the possibilities of using skin conductivity. How will users fill up at the gas station? And consider how many more stories about high-tech pickpockets there will be... when thieves just have to touch you briefly in order to get your payment information. NTT DoCoMo admits that it'll be several years before this payment-by-touch system will be "ready, reliable and safe" for Japan -- but phone makers may also want to anticipate the FUD and weigh it against the existing payment methods before releasing a new plot device for Michael Crichton.

Filed Under: contactless, payments, touch
Companies: docomo, ntt

High Interchange Fees Help Keep Cash Alive

from the ka-ching dept

In addition to the added convenience, electronic payment methods promise to reduce costs by saving merchants money spent on handling cash. Well, that's how it's supposed to work in theory. In practice, many merchants don't see much benefit from electronic payments due to onerous interchange fees. While the major payment processors take a cut of every transaction, merchants typically pay a flat fee for all of their cash management needs, which makes cash sales appealing. The current system works well for companies like Visa, Mastercard and American Express, which enjoy a lucrative oligopoly. But for smaller startups developing payment solutions, the economics aren't favorable. Already the EU is looking to crack down on high interchange fees, and although EU regulators are typically much more proactive about such issues than their counterparts in the US, Congress is starting to explore the issue. Either way, if fees remain high in the US, innovation in this area is likely to remain slow.

Filed Under: payments