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Does the mobile payments revolution start here?

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Anyone who has used Apple Payor any other means of mobile payments in a store with any regularity as I do will know how quick and easy it is. You may also be aware, as I am, that each time I do it, many people – even the sales assistants (except in McDonalds) – still say “Ooo, how did you do that?”.

And that, in a nutshell, is the state of play with mobile payments in the UK: only I know about them. I jest of course, you guys all know about mobile payments, but many shoppers (and sales assistants) don’t. And no one seems to be doing much in any meaningful way to change that.

That is why the plan by Tesco to roll out its own mobile payment wallet, PayQwiq, is such an interesting story: it could be the fillip needed to make mobile payments mainstream.

Tesco has been quietly trialling PayQwiq for months with a tiny number of invite only shoppers (my invite clearly got lost in the mail) and is now going to start rolling it out across the country.

It works pretty much like Apple Pay or any of the other mobile payment wallets: you load your card details into a secure app on the device, which then uses the devices transmission and security features – and tokenisation – to let you pay at the checkout contactlessly or via the bar code scanner at the til. It also let’s you buy things online by scanning on-screen codes.

So far, so what? What makes it really stand out is that it has an upper limit on payments of £400 – game-changingly better than the £30 Apple and Android (and Payforit – the carrier billing option) limits currently in place.

The Payment Services Authority (PSA) set the limit on contactless transactions at £30 for security reasons, but increasingly – and silently – many major retailers have been upgrading their contactless terminals to use something called Consumer Device Cardholder Verification Method (CDCVM). This security technology distinguishes Apple Pay from standard contactless cards, and dispenses with the £30 limit.

According to HSBC, talking to 9to5mac: “many major retailers” now use it although there is no list. My guess is that Tesco is now on it and will be using CDCVM to allow these widespread higher value contactless mobile payments to progress.

But I digress: why this is really interesting (as if contactless payment standards wasn’t!) is that if Tesco can get a fraction of the 600,000 Club Card app users to use PayQwiq, then a minor mobile revolution will be set in motion.

Imagine all those people who might start using it in Tesco’s every week (including me) to pay for their groceries? Numerically, this would be a significant boost to the percentage of the populace who use mobile payments – which no doubt will make for a great story in M-Retailing in itself – but it might just show how simple, easier and more secure paying this way actually is.

The downside, however, is that I don’t want tons of blooming apps on my phone to pay in different stores. Tesco is tying the Club Card into the payment app, which is great, but if Sainsbury’s follows suit (as it is likely to do – its been working on an integrated payment and shopping app for more than a year) – and other retailers follow suit we are back to square one.

It is the same issue we see with loyalty cards. Many retailers are yet to integrate them with mobile, but eventually they will. Then what? Back to having a virtual wallet full of loyalty cards too.

What is really needed to ignite this market is for the phone and my unique ID to become at one with all my payment tools and loyalty cards. It is, after all, a smartphone – it needs to start acting smart and doing it for me. I don’t care which app I used to pay with so long as I pay with the card I want and accrue/spend the right loyalty points as I do it. The phone needs to do the thinking for me.

This is some way off (although with a new iPhone out in a month or so, I live in hope it may be sooner than I think) and the Tesco PayQwiq move is a bold and helpful one, it is still part of baby steps in terms of unifying the mobile experience and taking things to the next level.

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