Wednesday 26 October 2016 | RSS



    Schmidt: One-third of merchants could get NFC POS terminals ‘in the next year’

    Eric Schmidt, Google’s executive chairman, believes that a third of POS terminals in retail stores and restaurants will be upgraded to allow NFC payments within the next year, the Financial Times reports — and credit card companies will foot the bill.

    Google's Eric Schmidt

    SCHMIDT: 'It's in their interests to convert as fast as they humanly can'

    “Such a development will prepare the ground for what he believes will be a ‘trillion dollar’ industry of mobile advertising and payments,” the financial newspaper continues:

    Speaking at the Cannes Lions advertising festival on Wednesday, Mr Schmidt said Google was working to encourage payment processors to upgrade a third of their terminals, which will be sufficient for wide adoption of the technology.

    “That money is going to be spent not by Google and not by the phone guys but by the credit card companies, because the fraud rates are so much lower,” he said. “Nobody knows how quickly this will occur but it’s in their interests to convert as fast as they humanly can.”

    Because of the number of different players involved in deploying such a system, Mr Schmidt said it was impossible to make a firm forecast of the timescale.

    “I judge that based on how long I think it takes, because the terminals are available now, the software is available now or this summer,” he said. “How long does it take an infrastructure player to upgrade a significant percentage of their infrastructure — it’s on the order of a year, it’s not a week, it’s not a month but it’s also not five years… It’s an educated guess.”

    • What ****… Can anyone tell me why 1/3 of merchants (or enough merchants to account for 1/3 of total terminals) would convert. Moreover, what is the incentive for banks (i.e. credit card companies) to pay for all this?

      It’s been what five or six years since RFID chips were embedded into credit cards. And at the Google Wallet announcement, MasterCard announced that 300,000 terminals could accept RFID based cards. That’s 300K out of 30 Million or so (about 1%).

    • Lexcyn

      I would say around 75% of current POS systems in our city can accept PayPass or NFC payments. One of the largest coffee shops in Canada already accepts PayPass at ALL locations – I can see this becoming hugely popular up here. I cannot wait for it to be released in Canada.

    • Shimi

      just a quote:
      In 1998, the Tower Group conducted a detailed study of the cost of converting to EMV contact cards. The total costs—most of which would have to occur at and with the POS systems—were calculated to be $12.8 billion. That year, total bankcard fraud, as affecting the banks, was estimated to be less than $1 billion—about a nickel per $100. So it was difficult to make a business case on those

      • Shimi – The cost you quoted does not surprise me in the least. It’s the rationale behind these conversions taking 5 to 7 years (to allow the terminals to be replaced as part of their “normal” cycle).

        Do you have the full citation for this study? Thanks in advance

        • Shimi

          you got it. lots of interesting stuff here.

          • Shimi

            and if you want to discuss this stuff you can contact me:
            we are a startup company that just recently solve the POS-mobile phone integration issue!

    More headlines...