Changing behaviour, one tap at a time

I'm in London for InfoSecurity Europe this week. Since leaving the UK a decade ago, I've been back a couple of times a year, and seen technology change happening in a sort of strobe-light stop motion.

One everyday technology has undergone rapid change in that time, and is set for another: payments.

In the mid-2000s, chip and PIN cards were aggressively rolled out by UK banks and retailers, and within a just few short years, we had a new generation of cashiers who viewed South African issued magstripe cards with bemusement or suspicion.

Now, contactless payment is everywhere - small purchases are routinely made with a quick dab of a card on the reader, and the speed of transaction is so vastly improved that it's inevitable South Africa will adopt the technology quickly. There's also a lot less cash in evidence - small payments are more easily and quickly made with a tap of a card than juggling notes and change.

Until contactless comes to SA en masse (and well done to Standard Bank for leading this wave), there won't be the same friction at the till point as the chip and PIN roll-out - contactless payments are intended to remain for small amounts, so existing chip cards will remain. But, we're already a wave behind: the next wave is already building, and it's glaringly obvious - smartphone near-field communication payments.

Londoners walk around with phones in hand. Listening to music, making calls, checking maps... look down a high street and you'll see the majority of people using a smartphone in one way or another. For the rest, it's close at hand.

Watching these people in grocery stores, you see a checkout juggle of putting phone in pocket, taking out bank card, beeping card, putting card away and taking out phone again. I haven't seen any sign of anyone making payments with a smartphone-based NFC e-wallet yet, but the behavioural driver is abundantly clear.

Apple is well positioned to dominate this space - Apple Pay arrived late to the payment party, but no one noticed because the music hadn't started yet. And, as Apple manages so often, it's achieved the combination of political manoeuvring to build a fait accompli ecosystem in the back-end, and the slick user experience in the front-end.

That, plus a wearable to take the payment experience to the next level, means the company is particularly strongly positioned - indeed many observers believe the Apple Watch is little more than a Trojan horse for Apple Pay, and they might well be right.

But, everyone will be there. Most of the newer smartphone models of any OS support NFC, and as soon as all the banks have apps which use it, smartphone payments will become the norm.

It will go beyond payments, too, and this is where things get interesting. Like many travellers, I booked train tickets online before arrival, and right now, collecting tickets is a clever but cumbersome process of plugging a bank card into an automated ticket machine, then looking up the reference number (on my smartphone screen, of course), and typing it into a touch-screen on the kiosk.

Apple Pay arrived late to the payment party, but no one noticed because the music hadn't started yet.

Again, the pent-up demand for behavioural change is glaringly obvious: I have my phone in my hand. Instead of laboriously struggling with an inaccurate, smudged touch-screen while a queue of impatient commuters sigh and fidget behind me, a quick tap of my phone on a reader would vastly improve the experience for everyone concerned.

Train companies are just one example of the many, many other service industries that are ripe for this sort of innovation, and the tipping point is almost here. They won't roll-out NFC-enabled service kiosks and apps until there's a critical mass of users, but that critical mass only needs one killer app, and that's payments, driven by banks. A few months, would be my guess.

At that point, South African companies will need to engage in some serious introspection. It's one thing to be a technology generation behind in bank cards, but to be a full generation behind in consumer behaviour creates more serious economic friction.

It's great that we have the Gautrain at all, no question, but the user experience of paying and managing a prepaid account is comparatively awkward and inconvenient when compared to European transport. That's irritating, but isolated, for now. When it extends to the entire retail and service industry, we'll move from quaint to backwards awfully quickly.

I'm optimistic that won't happen, though. We already have contactless payment cards in play; we have banks that are hungry for innovation; and we have some interesting home-grown payment technologies like Thumbzup, which can hold their own against cutting-edge trends internationally.

In terms of infrastructure and technology, we're in gear. Now it's up to the service industries to step up and embrace innovation.