Is the future of credit card security no card at all?

Smartphones may well take over as our payment platform of choice, but could a proliferation of payment apps kill the golden goose?
Written by Tim Lohman, Contributor

With millions spent by financial institutions each year on finding new ways to secure EFTPOS and credit cards, could the solution to better banking security be to simply do away with plastic altogether?

That's one potential future, according to Craig S Wright, vice president Australia - Asia Pacific at the Global Institute for Cyber Security & Research.

"My opinion on card device security is that we will move away from cards," Dr Wright said during a panel discussion on the CeBit Future of Payments conference in Sydney.

"We have devices — smart watches, Nike wristbands — all sorts of fun and funky things which can act as near field devices," he said.   

By way of example, he said a recent experiment involving the rewiring of a smartglove had enabled himself and a team of researchers to pay for groceries at a local Woolworths with a Jedi-like swipe of the hand.

"At the end of the day we all have [mobile phones]… and they are getting cheaper every single year. And we will find people not leaving home without them, but they will leave home without their wallet.

"What is the future of cards? Not cards. Anything else that we can think of that is strange, weird and wonderful and that will give us access, and pay and be trusted."

Andrew Weaver, associate at Payments Consulting Network argued that plastic cards would remain for some time yet, and continue to need new and updated security.

"From a future-looking perspective that is absolutely where we are going, but I can also look back 15 years to when we [were talking about] being a cashless society by now," he said.

"The future view, absolutely, I agree that is where it is going, but it will actually take a while to get there. The [United] States is an interesting example. They are talking about deploying EMV [Europay, Mastercard and Visa] chips – contactless or not – on physical pieces of plastic because it will take the market so long to move to the point where everyone is using their mobile [for payments]."

Andrew Rothwell, chief technology officer at Tyro Payments said possibly the greatest inhibitor to the mass transition from credit card technology to mobile phone-based payment technology was the proliferation of disparate, niche payment applications.

"How many payment mobile applications exist in the world today?  Dozens. And how many consumer experiences are they trying to encode onto a mobile phone? Dozens," he said.

"We have consumer experiences in hospitality, medical, automotive… everyone is trying to focus on a customer engagement experience to provide the best app. And then they back-end that with a payment as well.

"Pulling out a mobile phone with 55 different apps from Dunkin' Donuts, from Coke, from Macca's, from wherever… forget it."

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