The day when we no longer have to cart around our fat wallets, jammed with credit cards, coins and cash is fast approaching. Several smart mobile payment platforms have emerged over the past few years making it easy to pay our friends securely and in real time from our smartphones.
How to pay with your phone
Today, there are four primary models for mobile payments: Premium SMS based transactional payments, which is great for users without smartphones, Direct Mobile Billing, which accounts for 70% of all digital content purchased online in some parts of Asia, Mobile web payments (WAP), which includes online wallets such as Amazon Payments, Google Checkout or PayPal and finally Contactless NFC (Near Field Communication). The big banks and credit cards all have their own mobile apps, which allow you to check your balance and transfer funds. Other banks, for example, Visa and Bank of America have rolled out a mobile payment system based on Visa’s payWave technology and using a system calledIn2Pay, which started in New York last September.
Using mobile payments is a convenient win for consumers and makes the merchant look super tech savvy. It’s a trend that has caught on much more in most Asian countries but is slowly becoming mainstream in the United States and Europe. As we impatiently wait for the day when wallets will become obsolete, here are the big movers and shakers in the mobile payments scene in both the U.S. and Europe.
1. PayPal
PayPal, undoubtedly one of the most famous legacy companies in the e-commerce payments space, is upbeat about its future as it eyes the potential of becoming your “Wallet in the Cloud” for everyday, real-world purchases in bricks-and-mortar shops. The company is on track to handle $700 million in mobile payments this year, according toour report from LeWeb. PayPal Express Mobile is the company’s mobile checkout solution for merchants. It allows either in-App payment or mobile Internet payments, whatever the customers prefers. For more on PayPal, readour interviewwith PayPal Germany’s Head of Mobile who tells us why it’s like ‘working in a giant startup’.
2. Dwolla
Calling all Scaleup founders! Join the Soonicorn Summit on November 28 in Amsterdam.
Meet with the leaders of Picnic, Miro, Carbon Equity and more during this exclusive event dedicated to Scaleup Founders!
We first wrote aboutDowallain January ina posttitled, “Move over PayPal, online payments just got social with Dwolla.” Dwolla, a portmanteau of sorts, combining the words dollar and web developed a P2P payment system with an extremely low cost exchange. You can register on the site by logging in with your e-mail address or a Facebook or Twitter account. Once you’ve registered and confirmed your e-mail address, add your Facebook and Twitter accounts under the “Send Money” tab. Once your accounts are connected, sending money to friends is really, really easy. Just search for their name, for example, “Alex” and every Alex you know on Twitter or Facebook will appear. From there it is easy to send money on the site and it is transferred in a Twitter DM or in a Facebook wall post. The founders call it “passing the Dwolla.”
3. Venmo
Venmois a free, easy-to-use, SMS and Web-based payment network based on a concept of mutual trust. Once you establish a two-way “trust” or relationship with a member, you can pay or charge as you see fit. Charges can be easily reversed if there is a discrepancy. Venmo was founded in April 2009 by two former UPenn roommates, IqramMagdon-Ismail and Betaworks veteran Andrew Kortina as a way to settle IOU payments. When a transaction is made on Venmo, each party automatically receives a Venmo account which is where the user’s Venmo balance resides. Users can move the money to any other recipient on the system or transfer their money into a bank account, through Venmo’s established banking relationships. While transactions can occur over SMS, the actual payment processing happens online with the same security measures used by Best Buy and Amazon.com, over an SSL secured connection with encrypted data.
4. Square
Squareis a mobile payment service founded by Twitter’s co-founder Jack Dorsey. The service, which essentially turns every iPhone or Android smartphone into a credit card reader using a small white square, rolled out its iPhone and Android appslast springand is nowthe golden child of mobile payments.In May of this year, Jack Dorseyannounced his plansto replace cash registers with the new Square Register iPad app. Square Registerfeatures ‘Google Analytics’ style data for all purchases made through the register, allowing owners access to all of their sales statistics right from the register app or online interface. It will also allow purchases via the new Square Card Case as well as the Square Card Reader. Don’t missthis awesome storyon how two of TNW’s finest reporters used Square to survive at this year’s SXSW in Austin, Texas.
5. Mophie + Intuit’s GoPayment Credit Card
Mophie, known for its battery extending options,has partneredwith Intuit, a provider of business and financial management solutions for small and mid-sized businesses, on a mobile payment solution for iPhone owners. The system integrates Intuit’s GoPayment credit card processing app and quick-to-activate merchant account with the mophie marketplace credit card reader. Users can apply for the service from theGoPayment App, online or by calling Intuit right from their iPhone. iPhone owners will also need a clip-on Mophie marketplace card reader for the system to work.
6. TabbedOut
Using direct and social marketing, plus a guerilla approach to marketing itself,TabbedOuthas made a name for itself in the hospitality industry. In 90 cities in the US, across 20 states, you can go out with nothing more than your mobile device to make your payments. A credit card is attached to your TabbedOut account and if you’re at a TabbedOut business, all you have to do is log in and pay your tab directly through the app. See our full story on TabbedOutherefrom CTIA.
7. ZMAZZ
ZMAZZofficially unveiledits new mobile banking and payments platform at our conference this spring in Amsterdam. The app enables users to pay from any mobile phone in retail and at small medium enterprises ss well as on the web and to each other. The Netherlands based startup has already started to directly integrate its software into cash registers, payment service providers and with merchants. The result is a mobile payment platform that is completely independent from traditional banks, telephone companies and the payment card industry. ZMAZZ is also able to digitalize receipts and store them in a personal online ZMAZZ safe, giving users full control over their purchase history. ZMAZZ is owned by Euro-Wallet and will be first expanding in Amsterdam, then Europe and beyond with a system suitable for any mobile phone and without additional hardware implications for merchants.
8. Bitcoin for Android
We first wroteabout this dedicated Android app earlier this month. If you have invested in the virtual, alternative currency Bitcoins, the chances are that you want to be able to send and receive Bitcoin payments on your smartphone.Bitcoin for Androidis a new application which operates as a fully functional Bitcoin wallet and supports the scanning of QR codes to initiate transactions, allows users to email invoices from their device to request money and can even process payments without an Internet connection by waiting to send transactions when a connection is restored. The code for the app iscompletely open-sourceand has been posted to GitHub for users to be able to personally assess the code, so they aren’t the subject of a Bitcoin theft likeother Bitcoin investorshave experienced.
While the four primary models of mobile payments are listed in the introduction, NFC technology is perhaps the most interesting going forward. While it has been slow to catch on in the United States, it’s become thede factofor mobile payments in many parts of Asia, namely Japan.
Google launched the first NFC-enabled device, theNexus S, in December 2010, and other manufacturers will follow suit. “The bandwagon is already rolling and it’s not going to stop,”writes Google’s Rich Pleeth. “Thousands of retailers have already installed NFC readers, including Pret A Manger and Starbucks, both of whom are enthusiastically promoting them as a means of payment that rewards brand loyalty and minimizes queuing time.”
Pleethcontinues: Over the next few years we’ll see a range of devices offering NFC capabilities, but one point worth emphasizing is the functionality of location-based services, such as being able to offer consumers personalized discounts on items. For example: you regularly frequent a large coffee chain, let’s say Starbucks, but you haven’t stopped in for three weeks. The Starbucks boffins could create a program that recognizes this change in behavior and, with your permission, sends you a message checking you’re okay and asking if you’d like a free drink. Just imagine – maybe you’ve done something as simple as move office and there’s no longer a Starbucks on your way to work. The NFC app can recognize a store close to your new journey and offer a tailored discount. Perhaps as you walk in, you receive a message offering you a free snack with your coffee, which you can redeem immediately through the wonders of NFC. The brand has gone out of its way to check that you’re okay and thrown a free caffeine hit into the bargain. Brilliant: you’re now as loyal as an old dog. The knock-on effect from word-of-mouth will be huge. Customers want brands to care about them, and NFC technology can help businesses do just that.
It’s clear NFC will be very useful when it hits mainstream and I’m nervously anxious to see how hardware required payment systems like Square will endure. Looking far into the future, what will mobile payments look like? I asked Rich Pleeth, who wrote about NFC for Google, what he’s most excited by. He answered, payments using Biometrics. Ah, I hope the future gets here soon.
Story byCourtney Boyd Myers
Courtney Boyd Myers is the founder of audience.io, a transatlantic company designed to help New York and London based technology startups gr(show all)Courtney Boyd Myers is the founder ofaudience.io, a transatlantic company designed to help New York and London based technology startups grow internationally.
Previously, she was the Features Editor and East Coast Editor of TNW covering New York City startups and digital innovation. She loves magnets + reading on a Kindle.
You can follow her onFacebook,Twitter @CBMandGoogle +.
Get the TNW newsletter
Get the most important tech news in your inbox each week.
