Square and NFC measure up against each other
“I’ve never met a single merchant in the U.S. who says I want this NFC thing.”
That’s Square’s COO, Keith Rabois, speaking to Giga OM. To be fair, he has a vested interest as Square’s payment system is built around a traditional magstripe card reader (a technology that will have some troubles leaving the continental US when going it encounters Chip and Pin), and right now, I tend to agree with him.
But at the same time the idea of a debit card was something merchants didn’t want. Or credit cards. Payment methods come into vogue and out of fashion on a regular basis, just look at the emotional ties that see the British Banks continue to issue cheques and guarantee cards to some of their clients when they really want to get rid of the whole system and move to a 100% electronic solution.
New ideas are coming along all the time, and there is a certain evolutionary aspect to all of this. The new money transaction methods that survive will be the ones that are strong, be it strong from the idea and implementation, strong thanks to the back-end employed, or strong because of the business relationships they be building on.
The entrance of Google into the payment race, with their NFC Google Wallet available to the public, is sure to draw the attention of the press. Square no longer have Silicon Valley bloggers to themselves, so they’re naturally going to come out fighting. But Rabois speech is a strong one, even for that scenario. There’s no doubt that Google have deep pocket, and it’s likely that Wallet’s attractiveness to them is in the coupon and discount space (leveraging advertising, like all their products), than in a profitable payment system, so it’s not a level playing field with similar goals.
In the same breath, Square always likes to minimise their investment from Visa.
But all is fair in the valley, and in business. What is certain is that the victor is likely to be the customer. As the payment systems force themselves to be better, faster, and more secure than the others, the benefits to the payee and receivers is only going to improve.
So bring on the battle!