Page 122 - Trends in Telecommunication Reform 2016

Figure 4.4: Screen capture of instructions for adding payment information to CurrentC account

Source: CincoTec, http:// www. cincotec. com/ blog/ apple- pay- vs- currentc

cent of each transaction -- displeasing retailers. interop strategies depending on firm-specific
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For that reason, the CurrentC mobile platform, factors, such as current market position,
which is run by major U.S. retailers, is trying to technological capabilities, and IP portfolio, among
circumvent the existing institutional payment others. Perversely, network effects might be
structure. By withdrawing funds directly from a disincentive for companies to use or market
end-user checking accounts instead of using credit interoperable systems or devices. Apple, for
cards, CurrentC aims to take advantage of the example, seeks to use its mobile payment platform
different institutional structure involving bank as a competitive differentiator. Thus, it has chosen
withdrawals, and thereby avoid the fees associated not to interoperate with other mobile devices,
with credit card processing. limiting the platform to its newest iPhones.

As the example of mobile payment systems From a legal perspective, the mobile payments
demonstrates, all layers of interop are important. market shows the influence of general laws
That is why no short definition of interop fully such as competition law, consumer protection
captures its scale and complexity. The example law, contract law, and tort law, as well as self-
also highlights how technology, market, and law regulation. In particular, the self-regulation of the
can either support or inhibit interoperability in a payment industry shows a bi-directional influence
multitude of ways. that simultaneously supports greater levels of
interoperability and less. In the United States, new
From a technical perspective, the mobile payments rules set by the industry will hold retailers liable for
example shows that there is no single technical fraud unless they switched to new, interoperable
architecture for interoperability. Some market payment terminals by October 2015.
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actors use NFC, others use optical bar codes, and
still others use hybrid technologies. A company’s This self-regulation is increasing interoperability
choice of technological platform can have a big in several ways. First, the new payment terminals
impact on its ultimate interoperability; the more will support NFC payments, dramatically increasing
widespread and available the technology is, the interoperability between retailers and services
greater the opportunities for interoperability. like Apple Pay and Google Wallet. Second, self-
regulation increases institutional interop by
From a market perspective, the mobile payments bringing the United States into line with European
example also shows the influence of network standards for more secure credit card processing.
effects on actor behavior. Companies often set However, industry self-regulation arguably has also

104 Trends in Telecommunication Reform 2016