New payment terminals for EMV could speed up mobile payments adoption

by: Brian Day

Recent data breaches have pushed several large merchants toward EMV. As merchants reterminalize for EMV, many experts believe it creates a wider infrastructure to support mobile payments. That’s because most new terminals will be able to accept contactless payments, like those made via NFC-enabled mobile devices.

As a rule, mobile devices provide enhanced security capabilities for all kinds of transactions. They offer passcode protection and secure chip technology, as well as both device and cloud-based encryption and tokenization features. For its part, Apple Pay combines fingerprint authentication with tokenization to make payment transactions from Apple devices extra secure.

Yet, all mobile payments services, even Apple Pay, are predicted to struggle somewhat to achieve widespread acceptance. This is due in part to few retailers currently having the necessary hardware in place to process mobile payments at the point of sale (POS).

However, recent migration to EMV terminals by Target and other retailers could change that somewhat. Target’s decision to implement EMV sooner than planned may spur other merchants to do the same. Interestingly, however, Target is not planning to enable its POS terminals for NFC. This is likely due to predicted moves by the Merchant Customer Exchange (MCX), of which Target is a member. MCX is working on its own mobile payment solution that would use QR code scanning technology instead of NFC.

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