One of the top trends of 2011 has been mobile or digital payment methods. Being able to pay with your smart phone from anywhere in the world, instantly, in any currency is now a reality and that is just the tip of the iceberg compared to what is possible with the new technology being developed in the world of digital payments.
PayPal has been around for what seems like ages and they do have a mobile application allowing you to move money or make payments to someone on the go, but things have progressed even past PayPal. Some of the mobile payment methods that were introduced this year include Square, which allows you to swipe a credit card with your smart phone, and Google Wallet which houses much of your credit card information to use on the go, but also incorporates the ability for NFC (Near Field Communication) payments.
Square is a start-up that provides the card reader to anyone that signs up, free. This gives anyone, anywhere the ability to scan a credit card with their card reader attached to their smart phone, and receive money. Think of street vendors limited to accepting cash, now they can accept credit cards and open up their business to new heights. There is a fee involved but paying a 3% fee on something is better than 0% on nothing.
Google Wallet and Near Field Communication is an interesting development. NFC enables devices to communicate when they are simply near each other, not even touching. Bringing that to mobile payments is both exciting and scary at the same time. How are these payments secured? Will I be paying for things as I walk through the mall without even knowing? NFC is not a Google product and many other companies have been and are starting to use this technology.
Then there’s Jumio and their Netswipe service that turns any regular old webcam into a credit card reader. This software doesn’t take a picture of your credit card nor does it store your information. It takes a brief 250 milliseconds to analyze and read your card, insures you are in fact holding a credit card, and process the transaction. You still have to input the CVV code from the back of your card but that is the only data you have to provide.
This software is built into web shops as well as mobile applications and has an API that you can build your own applications around.
Growing up in the digital age and working in the IT field, I understand some of the concerns of these type of payments as well as the power behind them. But I also know that some people still don’t even use their credit cards online in the traditional way, punching in the numbers by hand. These people prefer to send a check, money order or cash if it’s accepted, or opt to buy products in person at the local retailer.
While I see the positives and negatives of both sides, the trend is leaning toward more and more digital payment methods and the older methods are being completely phased out.
What do you think some of the long term benefits or negative consequences will be if mobile payments really catch on?
Image by Brooks Elliot br>