Google’s Schmidt Predicts Contactless Terminal Rollout

Google’s executive chairman Eric Schmidt reportedly predicted Wednesday that one third of U.S. point-of-sale terminals would accept contactless payment within a year, a penetration rate that he said would be “sufficient” for widespread adoption of NFC-based mobile commerce.

But Schmidt, who was speaking at the Cannes Lions International Advertising Festival in France on Wednesday, added that the projection was only an “educated guess,” according to an article in the Financial Times.

“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 reportedly 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.”

A Tall Order
But upgrading a third of the terminals in the United States within a year would be a tall order, given that, at present, only about 2% of the roughly 7 million card-accepting merchant locations in the United States have been equipped with contactless POS terminals since the U.S. contactless-payment rollout began seven years ago. And many merchant locations have multiple POS terminals.

Google needs a wide rollout of contactless terminals that accept payment along with coupons and other offers for its Google Wallet, unveiled last month, to be successful. Schmidt Wednesday reportedly called mobile advertising and payments a budding $1 trillion industry. 

But while Google is believed to be subsidizing at least part of the cost for terminals for the 16 major retail chains it announced will participate in the wallet, Schmidt Wednesday reiterated earlier comments that Google would not be funding the terminals.

“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 in the article. “Nobody knows how quickly this will occur, but it’s in their interests to convert as fast as they humanly can.”

Payment card networks and banks have not said they would subsidize terminals going forward, although MasterCard Worldwide and other card networks paid for many of the contactless terminals rolled out in the past to support the contactless card rollout.

Schmidt’s statement that one-third penetration of terminals would be sufficient to support the widespread adoption of NFC-based mobile commerce is believed to be the first time a Google executive has made such an estimate.

HEADLINE NEWS

Apple Pay Launches in Spain with Support from Santander, Mastercard and American Express

NFC Times Exclusive Insight – Apple has continued to expand its NFC payments service, today launching Apple Pay in Spain, with participation from one of the country’s biggest banks, Banco Santander, and two payments networks, Mastercard and American Express.

Australian Antitrust Regulators Reject Big Banks’ Request for Collective Negotiations With Apple

NFC Times Exclusive Insight – In a draft decision, the Australian Competition and Consumer Commission has denied a request from four major banks for permission to negotiate collectively with Apple and boycott participation in Apple Pay during the discussions, with regulators expressing concern that such a position “could reduce or distort competition in a number of markets.”

ABN AMRO Launches HCE Wallet Commercially Following Pilot; Manager: Testing Vital to Ensure NFC Phones Work with POS Terminals

NFC Times Exclusive - AMSTERDAM, the Netherlands: ABN AMRO is the third and last of the Netherlands’ big three banks to launch its own mobile wallet, launching service today for its Maestro debit cardholders, the bank confirmed to NFC Times.

Exclusive: Two More Polish Banks Prepare to Launch HCE Payments

Nov 24 2016

NFC Times Exclusive – Two more Polish banks plan to launch mobile payments using host card emulation technology, NFC Times has learned, adding to a growing list of mobile payments services in Poland, which saw the launch of its first “Pays” service last week with the introduction of Android Pay.

Android Pay Launches in Contactless Hot Spot Poland, but Cards from Only One Major Bank Available to Start

NFC Times Exclusive Insight – Google has expanded its mobile payments service into a sixth market, Poland, targeting the country’s high penetration of contactless point-of-sale terminals. In-app payments will follow, according to the search giant.

Long-Struggling OTI Makes Progress Toward Achieving Profitability; Still Refuses to Give Guidance

NFC Times Exclusive Insight – After years of effort, Israel-based contactless reader and NFC vendor On Track Innovations achieved a rare quarterly operating profit from continuing operations, thanks to cost cutting and a high gross margin, helped by a onetime licensing fee. But it still showed a net loss and the cost reductions may have bottomed out.

Citigroup Announces Citi Pay HCE App as Expected; Launch in U.S. Delayed until Early Next Year

NFC Times Exclusive Insight – As NFC Times reported a month ago, U.S.-based Citigroup is the latest bank with plans to launch an HCE-enabled mobile wallet for Android phones, “Citi Pay,” which will launch in Asia-Pacific first then in the U.S., using Masterpass technology.

Intesa Sanpaolo Expands HCE Mobile Payments Services to Five Countries

NFC Times Exclusive Insight – Intesa Sanpaolo, Italy's largest retail bank, launched its HCE-enabled mobile wallet service in a fifth market, Serbia, in October through its local subsidiary Banca Intesa Beograd and claimed a country first by deploying an HCE-based payments service branded as Wave2Pay.

Samsung Pay Launches Quietly in Canada with ‘Early-Access’ Service from One Major Bank, CIBC

NFC Times Exclusive Insight – One of Canada’s big five banks, CIBC, launched Samsung Pay this week, making its Visa-branded credit cards available as part of an “early-access” launch that Samsung itself hasn’t yet announced.

Samsung Discloses Plans for Samsung Pay Launch in Taiwan; Apple Pay Launch Expected on Island Nation Soon

Nov 9 2016

NFC Times Exclusive Insight – Samsung today disclosed plans in a local forum to launch Samsung Pay in Taiwan next year with several banks and a closed-loop payments service, iPASS, which could be used for transit fare collection. The launch is expected around the first quarter.

Samsung Seeks Global Reach for NFC Transit Ticketing But Must Overcome Tech Challenges, Lack of Standards

NFC Times Exclusive – Samsung has been considering introducing NFC transit ticketing in every market where it has launched Samsung Pay, including the U.S., an

Square Plans to Make Square Cash Available in Apple Pay Wallet to Enable Customers to Tap to Pay in Stores

NFC Times Exclusive – Payments company Square is preparing to make its Square Cash service available as a prepaid payment application for Apple Pay in the U.S., which would enable Square Cash money-transfer users to tap for purchases in stores, NFC Times has learned.