Vantiv’s Top Brass On Apple Pay and Mobile Payments

The Business Insider Tech section ran this interview with Charles Drucker, Vantiv’s CEO, Daniela Mielke, chief strategy and product officer, and Matt Taylor, group president of integrated payments and emerging channels. The first question solicited Vantiv’s perspective on the entrance of huge tech companies such as Apple, Google and Samsung, entering the mobile payments market and where we are with respect to mobile payments and when might we see them take off. The message Mr. Drucker delivered was upbeat:

“First of all, we like mobile payments because mobile payments accelerate the move from cash and check to electronic payments — so it’s very positive. Usage of mobile payments and the various wallets will continue to accelerate as consumers get used to using them for different transactions and as merchants get the different devices so that they are accepted in more places. So over the near horizon you’ll see it accelerating.”

While Ms. Mielke identified specific challenges:

“Two things have to happen: One is that the infrastructure has to be ready, and the other is that the consumer has to start using it. We are already reaching an inflection point when it comes to the infrastructure. In the US, by the end of the year, about 50% of all terminals will be able to accept NFC; Android Pay will be on a billion handsets; and Samsung Pay will be everywhere. So infrastructure-wise, we’re getting to a point where it could take off.
Where I would be a little more skeptical is the consumer. I think we have seen how new types of payments often take some time to take off — it just takes a long time for consumers to change their habits. I would think it’s here to stay, but it will take years and years for it to become really mainstream. Now it’s still the early adopters.”

The conversation then moved to consumer’s security concerns related to mobile payments and Ms. Mielke discussed a few key issued:

“And, in general, consumers perceive mobile transactions as more risky, although they are not, but that is a general perception. I don’t think that it’s going to be the merchants or the banks that change it — it is going to be the big brands. A big brand has a lot of trust and people just think “if Apple is doing it, it is secure.”
There was a lot of fraud with Apple Pay initially, but people understood it was actually an issue with the banks, it wasn’t actually Apple. I think over time that fraud will go away.”

Overview by Tim Sloane, VP, Payments Innovation Advisory Service at Mercator Advisory Group

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