Mention a paper check to a Millennial, and you are likely to get blank stares. Before we address the benefits and pitfalls of mobile payments, first we must acknowledge that the idea of writing anything on a slip of paper for a payment is as anathema to them as a rotary phone.
ow, the ubiquitous debit card may also be on the way out as mobile payments via older NFC such as Apple Pay and the new Google Pay, which combines Android Pay and Google Wallet (although the P2P transactions mysteriously are missing) and newer magnetic secure transmission (MST) like Samsung Pay service that uses both NFC / MST and works everywhere to transmit payment information
The more common NFC is the same technology found in Apple Pay and Android Pay, where payment information is securely transmitted between an NFC chip (found in the smartphone) and an NFC reader (usually installed near the point of sale machine) becomes more and more commonplace for transactions. But Samsung Pay with both NFC and MST has several advantages over the other two competing technologies.
In a similar trend, shopping for groceries or in drugstores have changed as well. Most places require you to have a “shopper's card” of sorts to receive the sale prices and values on posted items in the store. This also has changed the face of shopping, mostly in the favor of the retailer than the shopper, but in truth both can benefit from this.
This article will look at each of these mobile payment systems along with the benefits and pitfalls of mobile payments.
Imagine leaving the house without your cell phone. It is no doubt you have instinctively just reached to check for it. Forgetting a cell phone today is almost taboo, and for the shopper, this is a true advantage. To pay for almost anything from a movie ticket to gas, wave the phone near the NFC symbol on the transaction terminal; the purchase is made quickly and easily.
An added advantage is a paperless form of transaction. More and more people are paying bills on line and eschewing the postal service for monthly bills. Some choose to directly draft everything from mortgages and car payments to child support and utility payments. Receipts and bank information is posted immediately, while technologically-savvy check their banking on line or via an app.
Those who cards are afraid of theft will find much of the NFC and MST technologies are highly secure and are easily turned on and off as necessary. Those who fear their information may be compromised will find stopping payments or canceling the card as difficult as a swift tap on an app. All that is needed is a LTE, data or wireless connection to make it happen.
Another huge advantage is you can add all the major credit cards as of fall 2016, many bank credit and debit cards, gift cards, and member cards as well. With my Samsung Galaxy S8/9 Edge, I added BJs warehouse, Big Lots, CVS Pharmacy, Best Buy, Lowe’s. Walgreens, and Office Max – just to name a few. I simply put my phone over the credit card terminal and no longer have to pull out or even carry these cards in my wallet. And yes, thank goodness my wallet is now thinner and not causing a curve in my spine.
Around the turn of the millennium, stores, particularly grocery chains, shifted from strict advertising sales to a card-based savings system. Signing up for the card was free and necessary to receive the sales benefits. It was slow to receive acceptance, but once the movement caught on, it was quickly accepted as the norm. More and more industries followed suit, and now most all chain store businesses have a card program.
The card savings system seems to be troublesome to some, as it may lead to more collected information than some may like. The fear of 'Big Brother' has many nervous, although giving personal information is not necessary and there are ways around the majority of the requirements to receive the card and/or benefits.
The other benefits and pitfalls of mobile payments deals with these cards often offer special deals and loyalty points for customers who shop regularly. Benefits such as cash savings, points shaved from gasoline costs and free items are only a part of the many choices available. The data the chains receive from the shoppers actually benefits the shopper as chains are more likely to have certain items on sale more frequently, including meats and high cost dairy, i.e. milk. Millennials and Generations X and Y are certainly comfortable with NFC and modern technologies, but as the Baby Boomer Generation grows older and more and more removed from modern technological advances, convincing these generations to trust NFC is difficult. The fear of card readers or identity thieves taking personal information by simply walking near someone is virtually impossible. Convincing them, however, of this fact may prove to be a serious uphill fight.
The card program too has its flaws. Many are reluctant to sign up but often feel forced. This can create resentment of the business, even in the face of good benefits and values. More still do not like the idea of filling a wallet with additional cards, particularly for cards used rarely.
Note, however, the disadvantages of both are minor and can easily be overcome through simple education. For businesses to move to paperless, checks and account balance information, and card loyalty programs, each must aggressively market to those groups who are most reluctant to make these changes. Commercials and videos explaining the benefits while simultaneously downplaying the potential downfalls is vital to success. Fear of identity theft may be slightly more difficult to win people over but promises of insurance and security are often enough to assuage fears. Your thoughts on this issue are appreciated – what is your opinion on the benefits and pitfalls of mobile payments?
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A report on zero rating by the Federal Communications Commission just a week and a half before the inauguration of Donald Trump said that zero rating for ISPs and mobile network operators violates net neutrality rules. “Zero-rated” applications do not count toward data caps or usage allowance imposed by internet service providers. Forbes staff writer Parmy Olson called the report “too little too late”.
Zero rating has come under fire from many quarters. “While network capacity could become a problem if zero-rated offerings truly take off,” writes Colin Gibbs in a review of 2016 for Fierce Wireless, “the biggest challenge to the model has been claims that it’s a threat to net neutrality rules.” Last year, Verizon began offering zero rated video streaming though NFL Mobile app.
Keeping the Net Neutral
The idea of net neutrality is that everything on the internet should be treated openly and fairly. Net neutrality prohibits blocking of sites by ISPs. It prohibits throttling: ISPs should not slow down or speed up content for different services. It calls for increased transparency and prohibits paid prioritization of traffic. Before the recent FCC report, sponsored data plans – plans with zero rating – were to be judged by the agency on a case-by-case basis.
Facebook offers free internet access to underdeveloped countries with curated content. According to Internet.org, “Free Basics by Facebook provides people with access to basic websites for free – like news, job postings, health and education information, and communication tools like Facebook.” The motto of the service is “Connecting the World”.
A number of mobile network providers have taken up the practice. The first to try zero rating was T-Online with their Music Freedom offering in 2014. They followed that up with a video service called Binge On. Verizon came up with their own mobile video service called Go90. Perhaps the most aggressive has been AT&T’s partnership with DirecTV. Virgin Mobile 4G Plans Now Allow Free Zero Rated Data Use on Twitter.
Presenting the case against zero rating for ISPs and mobile network operators services, the young Mike Egan stated articulately in a YouTube video: “Zero rating isn’t about giving online services or online creators a chance. It’s about mobile carriers finding a loophole so that they can keep you even more locked into what easily becomes their new media ecosystem.”
He says that “certain services are privileged over others” and that it is one of the best ways to “kill a free and open internet”. Egan and others like him are upset, and he talks in terms of “the oppressor” versus “the oppressed”. The Federalist Society takes a different view. In their YouTube video about zero rating, they compare it to getting free samples of ice cream. “This is a way to increase the adoption of the internet,” the spokeswoman says. “All that zero rating is doing is helping to increase the competition and expanding the user choice.”
The Less Regulated Road Ahead
The “too little too late” remark of the Forbes staffer is all about the new political realities in America. Despite the recent pronouncement again zero rating by the FCC, chances are the practice will continue unabated. President Trump has vowed to cut government regulations by 75%, and the new FCC chairman Ajit Pai will likely tamp down any opposition to zero rating for ISPs and mobile network operators.
A blog post from CCS Insight says, “Mr. Pai had opposed government intervention in the telecommunications market and has been an open critic of an FCC report disapproving of zero-rating data, also known as toll-free data….” The blogger goes on to say that there will certainly be a rise in the number of toll-free data offers.
Many are concerned about the potential loss of internet freedom with zero rating. As Egan put it, “It’s a war for the future of our media landscape.” How that war plays out when deregulation sets in remains to be seen. Neutrality is a hard thing to maintain. What are your ideas on zero rating? Does your network provider bundle any of these services? How do you think it will affect the future of the internet? Please add your comments below.
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Network function virtualization, as Dylan would say, the times they are a changin’. Network Function Virtualization has come to the mobile operator, and according to strategic business advisor Northstream.
It will be part of a “natural evolution of existing infrastructures” bringing greater efficiency and lower costs. But the key will be the creation of new services. “NFV in 2017 will be driven by services such as VoLTE, Carrier Cloud, Wi-Fi calling, service chaining, resource sharing and network slicing.”
Network Function Virtualization, aka NFV, was introduced to the world through a white paper that was delivered at the 2012 SDN and OpenFlow World Congress. Authors from thirteen different telecom providers contributed to the work. The paper highlighted several benefits of NFV, including reduced equipment costs, lower power consumption, faster time to market, scalability of services, and vendor interoperability.
The traditional approach to networking involved the dispatch of personnel, either to the data center or to the customer premises, to install the physical devices and cabling required to make the network services function. This sometimes involved a number of “truck rolls” until the network appliance was fully operational. But an implementation that might have taken weeks or even months through the traditional method might only take a few minutes with Network Function Virtualization.
Common appliances that can be replaced by virtualized network functions (VNFs) in the NFV architecture include routers, firewalls, switches, load balancers, and media servers. Instead of physical installs, Network Function Virtualization software can be used to simply “spin out” new services as needed. As traffic volume increases, the system may automatically create VNFs to meet the demand.
When things slow down, the infrastructure will automatically be reduced. Malfunctioning virtual devices will be detected and traffic will be rerouted through a new VNF created just for that purpose.
Replacing infrastructure is fine, but the real potential is in the expanding service portfolio of the NFV architecture. “By enabling service chaining and resource sharing,” says Northstream, “NFV allows operators to deliver network services to customers and enterprises through software instead of dedicated hardware devices. This represents a major step towards meeting the new demands of industry verticals that are just around the corner.”
While the hardware part has become simpler – many implementations are using off-the-shelf blade servers – there are still plenty of obstacles to overcome. RCR Wireless News explores the key challenges facing ongoing SDN, NFV and cloud deployment models in an interview with Frank Yue, director of application delivery solutions at Radware.
Yue believes that the biggest issue telecom companies need to deal with is orchestration, the automatic deployment of resources in the cloud. Trying to bring things together is “still very targeted and piecemeal”. Providers seem to be in a rush to bring services to market. “Really to get orchestration and everything right,” says Yue, “you need to have all these tiny projects come together in one big cohesive unit, and I don’t think we’re there yet.” Real time and automation are the key words, according to RCR Wireless editor Dan Meyer. For Frank Yue, the keys are agility and elasticity, terms associated with cloud computing.
Another major challenge is security. How do you maintain the privacy and integrity of your data across the cloud infrastructure? Industry standards have a bearing on security. Yue calls the situation a “big administrative mess”. Without proper standardization, particularly in multi-tenant environments, the potential for security breaches remains.
One standards body, the European Telecommunications Standards Institute (ETSI), announced NVF Release 2 on September 27, 2016. The statement includes remarks from Telefonica’s Diego Lopez, the newly appointed Chairman of ETSI NFV ISG: “This represents another major step towards our objective of defining a comprehensive set of specifications that will facilitate the deployment of Network Function Virtualization throughout the telecommunication industry, with significant benefits being subsequently derived in many interrelated sectors.” Lopez says that the ETSI NFV Architectural Framework will form the basis for the security, reliability, and integration of NFV going forward.
How quickly will NFV revolutionize the networks of the world? That remains to be seen. It’s being looked at as a potential framework for 5G mobile deployments. Will service chaining fueled by NFV resources make large-scale network installations a simple point-and-click operation? How will Network Function Virtualization be used in the development of self-healing networks? What other innovations await us in the field of network virtualization? Get ready, because the virtualized future everyone dreamed about is well-nigh upon us.
Does your company plan to deploy NFV any time soon? What do you think about this new technology? How do you think it will affect telecom companies and their customers in the next few years? Please share your comments on Network Function Virtualization below.
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