Spending money has never been easier. Unconventional payment options are multiplying rapidly. Consumers and merchants are becoming open to more and more cashless forms of payment. From mobile-activated vending machines to credit card readers at farmer’s markets, the mobile payments movement is in full swing – from futuristic fiction to right-now-reality.
Miguel Heift, senior writer for CNN Money writes about the first time he was “tickled” by a payment experience. Heift describes, Café Grumpy, an easy-to-miss hidden hipster hangout nestled in New York’s Chelsea neighborhood. He walks in, orders his cappuccino, and is asked who to charge it to. Heift responds, “charge it to Miguel,” and with a tap, tap, tap on Grumpy’s iPad register, the transaction was complete. The bill charged to Heift’s phone, which, by the way, never left his pocket. This, which Heift describes as his “gee-whiz moment” is just one of the ways that mobile payments are revolutionizing business, adding to the prophecy of phones replacing wallets.
The Chicken and the Egg
Rest assured, the transition, though simple for startups, is not going to catch on as swiftly as you might think. According to Mobile Payments Today, American consumers are stuck in their ways and changing the way people pay for goods and services is going to be hard work. Vendors and mobile payment systems are going to have to work hard to provide incentives for consumers to make the switch. Startups like MyCheck are on the right track. The system enables restaurant patrons to split their check and pay individual portions from their phones. Along with other systems MyCheck has also partnered with PayPal to integrate the experience to the popular app and expand availability. On the other hand, merchants will be hesitant to make the transition from their tried and true, albeit pricey, point-of-sales terminals to wireless or simplistic mobile swipe systems – until e-wallets become commonplace, and vice versa.
The number of businesses equipping themselves with mobile payment systems is rising, and fast. For the first time, big and small businesses, private merchants, farmers, charities and the like are stepping boldly into the new trend current and are benefiting. The outlook is bright for the mobile payment trend as market experts predict the majority of brick and mortar retailers to make the mobile move. Industry consultants Carlisle and Gallagher predict that within 5 years, half of today’s smartphone users will be using mobile wallets as their preferred payment method. There are tremendous opportunities for growth in the mobile payment industry which continues to increase in both user base and transaction volume.
Everyone from mega-technology companies to financial institutions, giant telecoms, national retailers and small startups are attempting to get a piece of the mobile payment revolution. It will take time to come to a consensus on common technology standards and platforms so they work seamlessly across all devices, wireless networks, credit card types, and retailers. It will be years before these issues, among others, are sorted, and until then the cash will not go extinct. When it does happen, mobile payments are set to be as transformative to the world of commerce as the advent of the credit card in the 1950s.
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