The world of payments is changing, but not without a fight. In the future you won’t pull out your Visa or MasterCard; instead, you’ll pull out your cellphone or a card you can swipe on a sensor. One company making that future a reality is mPayy.
So why can’t we pay our bills via our phones yet? Why does everything still involve our credit cards?
“It’s a business model issue,” says Conrad Sheehan, founder, president and CEO of mPayy, an alternative electronic payment system. “We see the mobile carrier as being an emergent dominant relationship you have in your life. But ‘business model’ is sometimes code for ‘who’s going to make money?’ In the world of payments, it’s a fixed pie. Something has to give. There’s a world of issuing banks, a world of acquiring banks, and then there’s Visa, MasterCard, Amex, Discover in the middle: the three-person party. How do you get a wireless carrier in there? Then, by extension, the OEM—the phone manufacturer? They’ve got to make money in order for this to work.”
Amid these major forces, mPayy’s strategy is to “come in at a right angle”: building software for a payment system focusing on purchases too small to pay with plastic, or utility bills, where you might have to pay extra to use a credit card.
In Sheehan’s view, the current design of credit cards is something we’d change completely, if we could have a do-over. “They were built for an offline, mechanical world. That’s why the numbers are raised: the financial data is sitting right on the card. You could be blind and still get it. This hasn’t changed one bit, in light of the ubiquitous world of the internet: it’s still the same exact product. If you were to do a new one, you would never put sensitive financial data in plain text on a card.”