A Closer Look At How Mobile Payments Will Take Over The World
More and more people in the world are converting to smartphones. All those Nokia snake phones from back in the day will soon be consider an antique. Every week we hear more and more tech news about mobile payments. Mobile payments are slowly being integrated into our daily lives and technology. I think that by 2020, we will be seeing 90% of the payments going through either mobile or virtual. Let’s take a look at a few mobile payment solutions in our community today.
These are online or virtual wallets made for your mobile device. Google Wallet is a great example of this. Traditionally you would carry around cash in your wallet, but now you can transfer cash into Google’s virtual wallet. It holds more than just a currency, you can enter your credit card, gift card, and other credits you have into the wallet. You can then purchase anything you wish online and choose to checkout with Google wallet. It is extremely secure and maintained heavily by Google. We are seeing more and more ecommerce sites accepting this type of payment. This might slowly replace our real wallets. Imagine only needing to carry around a phone for everything.
Direct Mobile Billing
If you have been around the web often enough, you might have notice some stores saying, “Pay with your mobile phone!” or “Charge your phone carrier”. 10 years ago, this would seem like a scam for most people. Now it is different, we are seeing more and more of stores accepting this type of payment. This type of mobile payment can get dangerous though. Imagine your child having access to your phone or what if the payment method is so easy that you overspend? Mobile payments can get dangerous if not controlled property. This type of mobile payment works by billing your carrier first, then your mobile carrier will usually add it to the bill and send it to you at the end of the month with an additional fee. Boku, Mopay, Payment one are examples of these payment processors.
The traditional chunky POS systems are still being used daily, but we have been seeing more and more Ipad based POS systems. Both traditional styled POS systems and the newer Ipad type of POS systems can have mobile payments configured right into them. The customer can then make a payment using their mobile phone in a bar code scan format. This is really convenient for business and also convenient for customers. Customers use their phones while waiting in line anyway and businesses can can track of rewards for each customer through the system. Pretty awesome! Square is an excellent example of this.
Yesterday I was booking a flight for my trip to New York. I had my credit card ready and everything, but when I got to the checkout page, I noticed that there was a paypal payment option. I immediately chose the paypal option instead of using my card, not because I’m a big fan of Paypal or anything, but because it’s quick and easy. We have been seeing more and more startups create apps that remind you to pay your friends through paypal for rent, food, just about anything. I have friends that pay their rent each month through Amazon payments. Nomore excuses about not having enough money on you to pay back your friends, you can now use p2p mobile payments to pay instantly! Check out this infographic by mobilepaymentstoday
Trends in Mobile Payments
As mentioned above, more and more stores are starting to accept mobile payments. Recently, Tencent (China tech giant) released a mobile payment platform for their chat client WeChat. That same day, more than 30% of the taxi drivers and small merchants created merchant accounts for accepting payments. It is estimated that by 2016, the only type of payment that will be accepted in mainland taxis will be mobile payments.
Talking about taxis, ridesharing apps such as Lyft, Sidecar, and Uber all use some form of mobile payment. This makes payment easier for both ends and makes it a little bit more entertaining. Most mobile payment systems hold onto the seller’s funds for a period of time to ensure that hit-and-runs don’t occur.
We have also been seeing a lot of food delivery related services/startup that take full use of mobile payments. You order your food through your phone and check out using an existing wallet. The entire payment process is handled through a mobile payment processor and off you go!
Custom Mobile Payment Systems
More and more corporations are creating their own mobile payment system. This allows them to deal with all the money themselves and not have to use a third party service. This saves them a lot of processing fees and can maintain their own security. The downside to this is the development cost. It takes hundreds of thousands to millions to put together a flawless system, this is not including all the maintenance cost associated with it.
Starbucks is an excellent example of this. Everything from their rewards system to their phone scanning system is all apart of their inhouse mobile solution product. Starbucks also just announced the release of a new feature that will allow you to tip your barista straight from the mobile app! Here’s the release article. Nomore needing to drop those pennies in the tip box! This also might mean that we will be spending more.
More and more people are using mobile to pay for groceries and services. At the same time less and less people are using cash to pay for their goods and services. If you are looking to build another startup, but can’t think of an idea, mobile payments might be a good solution to consider.