The Future of The Mobile Wallet…

Credit cards have revolutionized the way we shop, and changed our world forever. Period. But credit cards were introduced over 50 years ago and continue to be the major way we make purchases wherever we go. I know we have all heard about the excitement around “mobile payment” and how it’s supposedly going to eliminate the credit card and make shopping so much easier for everyone. I don’t necessarily agree with this, though, because right now there are numerous mobile payment methods, and I don’t think any of them are easier than using my good old plastic cards.

First of all, we have a ton of companies who are trying to revolutionize this industry THEIR way. If you think about it, who has the authority, or who is best equipped to change the way we pay for our good and services? The banks, or credit card companies, who currently operate this industry? The phone makers, such as Apple, who make the devices that will replace credit cards? Payment service providers such as Google or PayPal, who will make software to process transactions? Or what about wireless carriers such as AT&T, who operate the networks that these transactions will go through?

Everyone is approaching this a different way, which will not make me clip my cards any time soon.

Everyone is excited about Google Wallet, which officially released yesterday as a public trial. Google Wallet uses near-field communication (NFC) to allow you to simply open the app on your phone, enter your pin and swipe your phone close to a payment terminal to make a transaction. The only problem is that right now it’s only available on the Nexus S on Sprint, using only Mastercards issued by Citi, and only a handful of retailers have the payment terminals to support it. Google will expand the program to more phones, carriers, and credit cards soon, but for now its audience is very limited.

AT&T, Verizon, and T-Mobile have joined forces to create their own mobile payment project, code named Isis. The big three have invested more than $100 million to compete with Google and others and plan to use their huge customer base to entice retailers to go their way.

Visa, which runs the largest credit card network, is not picking sides yet. Visa is talking to Google and others as well as supporting the Isis project. And to hedge their bets, they are also investing in their own mobile payment service, and they will use their strength as a credit card company to get retailers to update their credit card terminals worldwide if necessary.

PayPal is also at the forefront of mobile payment, with many different approaches. PayPal will soon allow you to use your phone to make transactions by bumping other phones (using NFC), entering your phone number into traditional credit card terminals instead of swiping a card, or scaning a barcode with your phone and paying for the item immediately, skipping the checkout process altogether. See the video below for examples of PayPal’s new technologies.

Interestingly, Apple has been pretty quite about mobile payment, but you can bet we will find out soon enough where they stand and what their plans are (the iPhone 4 is not NFC equipped).

The real problem is getting everyone on board and having ONE, standard way of making mobile payments. Then the mobile payment infrastructure (terminals for swiping, bumping or whatever) can be installed and then maybe we can think about throwing away our plastic.

Some companies are not concerned with replacing credit cards at all, though. You’ve probably heard of Square, a company started by Twitter co-founder Jack Dorsey. Square makes a small card reader that attaches to your iPhone or iPad, allowing you to swipe a credit card and quickly take a payment right from your i-device. Square has been VERY successful so far, marketing the device to business people who, for the longest time, could only take cash. It enables everyone from the hot dog stand owner to the limo driver to the mobile handy man to become an official business accepting credit cards. To date, square has shipped more than 500,000 credit card readers and is processing $4 million in mobile payments annually, according to You can get your free card reader here. Other companies do exactly the same thing as Square, including VeriFone’s PAYware Mobile, iPay, Innerfence and others, with limited success.

Basically, we have heard about mobile payment for years, but we are finally starting to see the industry get serious, and it will be interesting to see what companies and what methods of mobile payment come out on top, stay tuned.

Fell free to leave any questions or comments below!

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One thought on “The Future of The Mobile Wallet…

  1. One of our Farmer’s Market vendors uses Square. Cool thing is he can e-mail a receipt (but not itemized). Might as well stick with what’s already working instead of getting too many devices and systems going, but hey, where there’s a buck to be made, the money-lenders and associated companies will be there.
    Good info! First I’ve heard of all this. Thanks!

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