Mobile payment technologies have been around for quite some time and yet it has never really burst into common place use…until now.
In 2012, I suspect that mobile payments will be more commonly used in theU.S. as many of the major technology players are putting on their gloves and getting ready to duke it out to be a leader in this market. It will be fascinating to see who comes out on top.
TheBattle: Google vs. Apple vs. PayPal
One of the major contenders is Google. The Google Wallet uses Near Field Communication (NFC) with special NFC capable point-of-sales (POS) device and phones. NFC allows for data exchange and wireless connections which are in close proximity to each other. The NFC forum that consists of 130 countries and many large organizations control the specifications, which is also an ISO standard ISO/IEC 18092. Currently only the Nexus S 4G supports Google Wallet, but next year should welcome a host of new Google Wallet-enabled devices.
The sheer size and weight of Google may enable the collaboration of card issuers, mobile device manufacturers and merchants.New Yorkyellow cabs already accept Google Wallet, enabling riders to pay fares with any enabled technology. OfficeMax also upgraded over 100 of its stores to support Google Wallet and SingleTap, which provides payment and automatic location of coupons.
Apple is the other contender in the market. The iPhone 4S does not support NFC and there has been no word from Apple on what future models may support. However, Apple has already dipped its toe into mobile payments. As part of its upgrade to the Apple Store app, the company introduced a new service called EasyPay. This service lets a user look up information about a product based on the barcode and then charge the product to his or her iTunes account. At the moment, EasyPay is extremely restricted; it only works in theU.S.and only in Apple stores and does not include the purchase of big ticket items. However fascinating because it makes iTunes a payment vehicle and really displays how consumers expect mobile payments to function.
PayPal Mobile announced a 511% increase in global payment volume compared to Thanksgiving 2010. Consumers have wholeheartedly embraced mobile shopping this year with iPhones generating the majority of the traffic and Androids not being far behind. PayPal is working hard to maintain its position as a payment processor and to being a big player in the mobile arena.
PayPal has an in-store mobile payment system that does not require NFC technology. The system allows shoppers to scan bar codes and to authorize payment through their PayPal mobile accounts. The benefit, of course, is vendors do not have to replace their POS and consumers do not need to replace their phones.
But it is not just the big players that are hedging bets on the adoption of mobile payments. There are also third-party vendors specializing in payment who are in this space. Square’s card case promises to let customers pay by having their smartphone in their pocket. It functions using GPS-style technology and appeals in part to the market move towards instant deals. The service provides merchants with a wealth of information on the consumer and encourages transparent spending for consumers.
Creating a tie-in between payment choices, location-based service, deal-of-the-day vendors and adding enhancements to loyalty programs and coupons is really what mobile payments are about. It is stretching the phone past just being a payment choice, it is about making the consumer experience different. Companies that invest in these technologies have a far better chance of surviving the challenging economic times ahead by wooing the consumer in every way possible.
By Sushila Nair, Security Specialist, BT Global Services