Everyone's against Plastic Credit Cards: the uphill battle to make payment methods smarter

The first contender: the NFC, or Near Field Communication. It was the new buzzword in the mobile space, with the promise of turning your mobile phone into a wallet. Google, Nokia, RIM, Vodafone, Orange, Visa, and MasterCard are some of the companies pushing for NFC support. 

But as expected, NFC is facing a lot of challenges to become a mainstay technology for brick and mortar payments. The infrastructure is not ready yet and the solutions require an entire new ecosystem and infrastructure investments such as merchants having POS terminals capable of communicating with consumers' NFC-enabled mobile devices (mobile, smart tags, Visa PayWave / MasterCard PayPass contactless smart cards, etc) to carry out purchase transactions.

Another big drawback is the iPhone's lack of support for NFC and that will continue to hurt the adoption of NFC for mobile payments, particularly in the US.

Moving on. The growing and increasingly crowded mobile payment ecosystem also has the cloud-based mobile payment solutions that require only downloadable applications for both consumers and retailers, and may make things much easier. Among them, PayPal’s in-store payment service, Dwolla, Square Card Case, to cite few. Together, they come with innovative business models, undercutting fees that merchants currently pay to accept the traditional networks' cards and offering a vast array of value added services. This way of payment has been gaining a lot of momentum lately, specially with PayPal's Home Depot Pilot. 

The list goes on and includes many other methods of payments available, such as QR code scanning, iOS and Android point-of-sale credit card dongles (Square, Intuit's GoPayment etc), SMS, carrier billing etc.

So, NFC is neither the only one more option for enabling payments at the physical point-of-sale nor the most cost-effective solution out there. So, why card issuers are pushing for this? Well, all are working very hard to capture market share and the last thing they want in this case, is to see retailers moving to software-only Dwolla or PayPal that renders them obsolete. 

Who will get traction?

It may be that the killer app or disruptive technology is still to come.