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TUCSON, Ariz. -– After a one-year hiatus, the PCATS Annual Conference kicked off yesterday with a focus on mobile payments and security.
The conference last year combined with the NACStech show to form THE Tech EVENT, but in his opening remarks, Gray Taylor, executive director of the Petroleum Convenience Alliance for Technology Standards (PCATS) said that event was not as successful as it could have been because it focused on appealing to “way too many people.”
“It’s good to be back at Loews Ventana,” Taylor said. The 2014 PCATS Annual Conference will continue at the Loews Ventana Canyon Resort in Tucson through Thursday, May 1.
In an educational session entitled “Future of Payments,” Taylor told attendees that mobile payments are in for “a bumpy ride” in the near term because "something better will always come out."
“Mobile payments are like the iPod. Initially, when the [Apple device] came out, everyone thought it was great. But it took seven years to truly make it great," he explained. "Mobile payments will undergo a similar process.”
For mobile payments to take off, settlement of the transaction has to be significantly improved. "Half of mobile payment providers don’t know how to settle a transaction,” said Taylor.
During the same session, Terence Spies, chief technology officer at Voltage Security, said the answer to transaction settlement issues may come from an unexpected source: bitcoin. Despite some analyst predictions that the virtual currency will die off, Spies noted that bitcoin can settle a transaction in just eight minutes.
Taylor agreed that bitcoin could be the “backbone of mobile payment” transactions, but he said its adoption will be slow due to government involvement. “The currency steps on too many toes right now,” he added. “It also could upset company business models.”
Offering a different viewpoint on mobile payments, Vish Ganapathy, director and chief technologist at IBM Global Retail Industry, applauded the convenience store industry for its mobile payment prowess, citing Murphy USA Inc. as an example. He said the c-store industry is way ahead of all other sectors of retail regarding mobile payment adoption and security.
“Adoption in mobile payments is slow, especially in the U.S. The rest of retailers are really catching up to what the convenience store industry has already done,” said Ganapathy, who presented the conference's opening general session on "The Future of Retail Technology."
Safe & Secure?
Despite the strides made by the c-store industry in mobile payments, security is and will remain a huge roadblock to its success, according to Taylor. He pointed to the massive data breach at Target Corp. that has dominated headlines for the past several months and has lawmakers in Washington, D.C., taking notice.
Smartphones are still a long way from being considered safe from hackers. The PCATS executive director cited Consumer Reports data showing that very few U.S. consumers have smartphones that incorporate antivirus software, a phone finder, a PIN containing more than four digits, remote reset or encryption. In fact, he said 35 percent of smartphones have no security function at all.
“The research shows that 4.4 million phones were lost or stolen last year, a large increase compared to 2012,” said Taylor. “That’s not because Alzheimer’s suddenly kicked in for a lot of people. It’s because thieves are taking the phones and easily using them to their advantage.”
Authentication of the smartphone user is another problem that must be worked out before mobile payments can take off, he stated.