The war for your mobile payments has begun

We’re in the midst of a format war for your mobile payments – get ready to hear a lot more about this in the next year. Pretty sure I know what format will win, though.

I used Apple Pay for the first time this weekend, and it’s almost stupidly easy – no cards to swipe, no pins, no signatures, no confirmation button presses – just a payment conformation that shows up on my phone when I held my phone (with the screen still off) next to the NFC reader (with my thumb on the phone’s fingerprint reader, of course). It will even work without a cell/wifi connection. Expect very similar behavior for NFC-enabled Android phones using Google Wallet in the coming weeks (right now most Android phones require the additional step of unlocking your phone and using a specific app).

Compare that to the proposed CurrentC standard – you enter your checking account info into the app, then at the store you unlock your phone, open the app, use the app to scan a QR code at the store (or the cashier scans a QR code on your phone). If you’ve used QR reader software before, you probably know that reading the codes can sometimes take a while, depending on cameras and light levels. Plus all signs point to you needing an active cell or data connection for the system to work – that’s spotty, at best, inside a lot of stores).

The bigger problem with CurrentC, though – the system bypasses credit cards and goes directly to your checking account, which passes almost all the fraud liability to you (credit cards have a bunch of additional federal protections). CurrentC will NOT work with credit cards, as it was designed by retailers to circumvent the fees that Visa, Mastercard and others charge. It’s also missing some of the onboard heavy-duty security that Apple Pay and Google Wallet use.

Customers won’t care that the retailers are getting around credit card fees if the savings are never passed on to them. And credit cards, while a little clunky, aren’t anywhere near as annoying as the CurrentC system seems (plus we’re all used to them). Apple’s got this one figured out, making the system both super easy and super secure. I know where I’ll be spending my money.

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