Todd Ablowitz, president of payment consulting firm Double Diamond Group, put it well when explaining the financial issues that are behind-and that might ultimately derail-this deal.
“It’s widely known that the limiting factor to NFC/contactless adoption has been that the very large players have not been able to agree on how the proceeds from this new payment type should be shared. Actually, they don’t even agree that it should be shared,” Ablowitz said. “Each of the major players is looking to make sure they can extract maximum value from this inevitable new paradigm.
The major card brands and banks say, ‘It’s our consumer. We have the trusted financial relationship and we shouldn’t have to share interchange.’ The carriers say, ‘No, it’s our customer. We are the ones who supply and support the phone, so we deserve a (big) piece of the pie.’
The retailers then turn around and say, ‘This is just payment. The whole reason our customer is paying for something is because they’re loyal to our store. We pay too much already for payments and this new technology should lower our costs substantially. And, by the way, we’re fresh off a victory in Congress, and we’re going to get this whole interchange thing fixed there.'”
CBS News, August 6, 2010
READ FULL ARTICLE