Visa's Mobile-Payment Moves: Still Solving The Wrong Problems

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The big announcement Visa (NYSE:V) made at the Mobile World Congress on Monday (Feb. 25) was a deal to put its mobile-payments app on Samsung's NFC-equipped smartphones, and for banks to easily install payment-card numbers in the phones' NFC Secure Element. Analysts made the usual noises about how these moves will give NFC a much-needed boost. Are these people delusional? We hope not, but it remains true that there's only one show-stopping problem facing pay-by-tap: Customers just don't want it. Solve that one, and the other problems are trivial. Fail to solve it, and nothing else matters.

Actually, Visa probably isn't delusional, just desperately optimistic, like it is when it reports contactless payments of all types (including NFC) have quadrupled in the past year, to 13 million per month. The missing context: VisaNet handles 130 million transactions per day. That means contactless is roughly one-third of 1 percent of the total. Visa knows that's pathetic. It just doesn't know how to convince chains to train cashiers to encourage customers to use contactless and mobile payments. Maybe Walmart (NYSE:WMT) will actually do that when its MCX finally arrives. After all, in retail, nothing cuts through the fog of optimism—or delusion—quite like hatred of interchange.