Vice President of Commerce Enablement and Global Innovation
Consumers in the UK are opening their mobile phones to payment functions that allow for increased spending, security and accounting, according to Nathan Gill, vice president of commerce enablement and global innovation at payment solutions provider Verifone. eMarketer’s Sean Creamer spoke to Gill about mobile payments adoption in the UK and the promise they hold to allow consumers and brands to have more comprehensive interactions.
eMarketer: How large is the mobile payments market in the UK?
Nathan Gill: The size of the mobile payments market globally is anywhere from tens of billions, to hundreds of billions. Specifically in the UK though, what we have seen is that mobile payment has been adopted at a higher rate than a lot of other markets because contactless [bank and credit cards] ha[ve] been successful in this market.
The UK was one of the earliest drivers of really widespread adoption of contactless, which utilizes near field communication (NFC) technology. And because that same NFC technology for contactless [cards] is also for mobile payments, we’ve seen much higher adoption rates in the UK than we do in other markets.
eMarketer: What would you say are the biggest differences between the contactless payment market and the mobile payment market in the UK?
Gill: If you look at mobile payments, the primary vehicle for enabling a mobile payment is NFC, but increasingly we’re starting to see new forms of mobile payments that want to take advantage of perhaps other technologies that may be less restrictive than NFC.
“In general the advantage of mobile over contactless, for example, is the fact that you’ve got an additional layer of security.”
While the majority of our transactions utilize NFC, we’re also starting to put [into use] some interesting acceptance models that use low-energy Bluetooth (BLE) and also QR codes to complete the transaction, which allow for a more flexible acceptance model across lots of different devices and are less restrictive than NFC.
And so we’re starting to do some work with companies that are utilizing our BLE and QR code solutions. But I think in general the advantage of mobile over contactless [cards], for example, is the fact that you’ve got an additional layer of security.
eMarketer: How have the security functions of mobile payments provided additional benefits for UK consumers?
Gill: Whether it’s with a PIN number or in most cases, the phone’s biometric authentication, it removes the cap that you see on contactless [card] transactions, which is currently £30 in the UK.
Mobile payments allow you to have a secure contactless experience on your mobile device without that cap. So if you look at the average mobile transaction, the value would tend to be higher than the contactless [card] transaction, which are used mostly for small, recurring stop-in type of purchases.
eMarketer: Considering the ease of use that comes with contactless card payments, what other benefits do mobile payments provide to consumers?
“If you look at the average mobile transaction, the value would tend to be higher than the contactless [card] transaction, which are used mostly for small, recurring stop-in type of purchases.”
Gill: When you’re using your contactless card, it’s a very quick and easy way to pay for something. However, what you lose with that—and gain with a mobile transaction—is confirmation and reporting of the transaction that just occurred.
[Mobile payment] adds an additional level of security for the consumer, being able to see exactly what they purchased and the amount they purchased, and having a record of that.
That creates better security insurance on behalf of the consumer. It also allows for what we believe will be the next big evolution in mobile payments, which is much tighter integration with loyalty and rewards [programs], and having the ability to manage these things through a single application. It becomes much more than a transaction—it becomes a comprehensive interaction with a brand.