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    NACS Speaks Out on Mobile Payments

    Gov't affairs chief says platforms tied to credit cards keep merchant fees high.

    ALEXANDRIA, Va. — Mobile payment is starting to get high-profile attention now that Apple has entered the mix with Apple Pay. However, one industry insider says real change is still needed.

    In an opinion piece in Tuesday's edition of The Wall Street Journal, NACS' Senior Vice President of Government Affairs Lyle Beckwith detailed his thoughts on mobile payments in general, and Apple Pay in particular.

    "No company can compete with Apple when it comes to releasing new products, and last month the tech giant brought some attention and excitement to how we pay for things with the introduction of Apple Pay. That’s a good thing, as the payments system is an often-overlooked but crucial part of the economy and how it functions," Beckwith wrote.

    However, he said Apple fell short of revolutionary change because it built its product on the flawed credit-card payment system.

    "Apple Pay works by linking existing credit- or debit-card accounts to mobile phones. Those accounts use an antiquated system dominated by two giants — Visa and MasterCard — that set swipe fees that merchants must pay every time a customer pays with a card," Beckwith explained.

    According to his op-ed piece, credit and debit cards are undercutting the purpose of payments by making them expensive. Price-fixed fees make paying with cash cheaper, he pointed out, when electronic payments should be the cheaper option.

    "There is room for mobile payments to be the cheapest, most secure and most innovative payment technology on the market," Beckwith wrote. "This will require real change. A mobile-payments system could link directly to an individual’s checking account, or transactions could be completed over the Internet, for example. A payments system could even connect directly to a mobile-phone bill. But mobile-payments providers need to be willing to jettison the baggage of price-fixed payment cards. That would be a real revolution in the payments system."

    To read Beckwith's full op-ed piece, "The Worm in the Apple", click here.

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