Contactless Payments: The Next Wave
Dove Consulting is now a division
of Hitachi Consulting
Recalibrating Expectations: Stop Trying to Get More
Revenue from ATMs
ATM & Debit Forum
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The payments industry is continually evolving. From barter to coin. From coin to paper. From paper to electronic. From electronic to wireless? One of the industry’s hottest topics is ‘contactless’ payments—which looks poised to gain traction with issuers, merchants, and consumers alike. In this issue of On Payments, we explore the benefits and challenges of current contactless card solutions, and the implications for the future.
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Contactless Payments:
The Next Wave
As if trying to maintain a link to the past—maybe because we all have this legacy notion that payments actually have to pass hands, and therefore touch—RFID-enabled payments have taken on the odd moniker of ‘contactless’. RFID technology certainly provides the ability to pay ‘without contact’, but it is far from ‘contactless’; rather, it has the ability to dramatically increase consumer convenience, and in doing so provide a mechanism for putting consumers more ‘in touch’ than ever before.
If we as a payments industry believe that compelling value can be created with RFID-enabled payments, and that companies can capture advantage based on that value, our first order of business should be to drop the notion of ‘contactless’ and create brands that communicate what the payment mechanism does, rather than what it doesn't do. It’s akin to continuing to call cars ‘horse-less carriages'. Surely we can do better than this.
* * *
RFID. Contactless. Wireless. However, you refer to it, it’s a hot topic in the U.S.—but it’s not new. Mobile phones have been used to make payments in Japan for years. In the U.S., Mobil (now ExxonMobil) launched ‘key fob’ payment devices in 1997. Cool as they are, however, they have not become a mass market phenomenon. Yet.
The recent launch of the Chase 'Blink' card and announcements by Citibank and KeyBank, however, may give the industry a scale platform for broad-based adoption of RFID.
The roll-out of an RFID payment mechanism by major U.S. issuers is significant because of its potential to further migrate consumers away from paper at the point-of-sale. Over the past five years, checks presented at the point-of-sale have declined at an average annual rate of 4.3%. RFID payments presents the opportunity to accelerate this decline, and (if the economics play out), displace cash beyond what debit has done to date.
We are a species of habit, and the use of cash remains (and probably will remain for some time) one of our most treasured habits. Why? It feels good to hold a crisp bill (the larger the better) and it is relatively fast as a payment device—an attribute prized by consumers and merchants alike. RFID payments will probably never give us the same tactile pleasure as cash, but speed will be unmatched: no PIN (usually), no paper, and best of all, no waiting for a clerk who really doesn’t want to be doing what they’re doing.
To read the full article, please click here.
Dove Consulting is now a division of Hitachi Consulting
We are pleased to announce that on August 1, 2005 Dove Consulting was acquired by Hitachi Consulting, the business and IT consulting division of Hitachi, Ltd. Dove will become the Strategy and Organization Effectiveness practice of Hitachi Consulting and operate as a division of the larger professional services firm.
"Joining Hitachi Consulting gives us the opportunity to grow our core strategy and organization effectiveness capabilities as part of a larger organization, while enabling us to support our clients’ systems and IT development processes in a way we have not been able to in the past," said David Dove, now a Managing Vice President of Hitachi Consulting. "We are excited about the opportunities that Hitachi Consulting will provide; we are even more excited about the opportunities our combined capabilities can provide for our clients—expertise, collaboration, and results, from strategy to solution."
To read the press release, please click here.
Recalibrating Expectations: Stop Trying to Get More Revenue from ATMs
A common refrain in today’s environment is, “How can banks increase their ATM revenue?” Unfortunately, today’s reality is that there is no single, definitive solution for driving sustainable ATM revenue growth.
But is that the purpose of ATMs, to generate ATM revenue? Prior to the boom years of the late ‘90s, banks viewed ATMs as a means of reducing teller costs and enhancing customer service; it wasn’t until the national adoption of surcharging that banks began to expect ATMs to generate revenue. It is time for banks to recalibrate their expectations. Rather than looking for ways to increase fee income from ATMs, banks should be looking at how ATMs can strengthen customer relationships—and, by extension, overall revenues.
To read a fuller perspective on the question of ATM revenue growth and the role of ATMs, click here (Article appeared in the July 2005 issue of Digital Transactions magazine).
ATM & Debit Forum
As in previous years, we will be chairing the upcoming ATM & Debit Forum. Mark your calendars for September 25-27 in Bal Harbor, FL – this year’s event looks to be one of the best gatherings yet!
The ATM & Debit Forum is the only event that brings together leading executives and experts from across the ATM, debit and EFT network industries to share their insights and best practices. The conference's keynote speakers will be Jack Antonini, President & CEO of Cardtronics, Philip Heasley, President & CEO of Transaction Systems Architects, Inc. (TSA), and Wayne Malone, Senior Vice President of Transaction Innovation at Citibank. Other speakers include American Express, Banco Popular, Bank of America, Coinstar, CO-OP Network, Diebold, Elan/Genpass, First Data, JPMorgan Chase, MasterCard, NCR, NYCE, PayPal, Peppercoin, PULSE, STAR, Triton, TSYS, Visa, Wells Fargo, and Wincor Nixdorf.
To view the conference agenda and to register, click here. To download the conference brochure, click here.
Dove clients and recipients of On Payments are eligible for discounted registration. To learn more, please click here.