Did you ever imagine the possibility of making payments at the grocery store or coffee shop using your cell phone? I mean, just your cell phone; I did not. Apparently, we are getting closer to the era of mobile payment system. This is an alternative method that allows users instead of buying with cash, debit or credit cards to use their mobile phone to pay for a wide range of services such as music, videos, transportation fare, parking meters, groceries, coffee, books and much more.
This mobile payment system has been well adopted in many parts of Europe and Asia, and soon will be widely used in the United States.
There are four primary models for mobile payments: premium SMS based transactional payments, direct mobile billing, mobile web payments and contactless NFC, being this one the most commonly used when paying at physical stores. The contactless NFC (Near Field Communication) allows consumers to use a special mobile phone equipped with a smartcard that they wave near a reader module. Also, NFC enables cell phones to wirelessly exchange data when they come into proximity of each other. The equipped devices are suited for contactless payments as well as mobile coupons, customer reward programs, contact information swaps and digital receipts.
Obviously the two tech giants, Apple and Google, have got down to work and are developing ways to adapt to this new technology.
Apple is believed to be working on including this new system for the IPhone 5. Apparently, it would allow users to make payments through their iTunes accounts. This is a great advantage for Apple since the company has a distinctive bond with its customers and iTunes has already millions and millions of users around the world.
On the other hand, Google has already built NFC technology in the most recent version of its Android mobile platform, which gives the company the lead over Apple. Moreover, according to Dave Talach, VeriFone’s Vice President of Global Product Marketing, Google as an advertising and media company is focused in targeting its ads and understanding its audience better; therefore this could facilitate the allocation of coupons and rewards to the users based on their needs and behaviors since they would demand a lot more than only the easiness of wireless payment.
Apple has the customer database, and Google has the tools and tactics to target them better.
Talach, sees Google as a more natural provider of NFC services, but some other such as Siegler, a writer for technology blog, TechCrunch, thinks Google does not have iTunes' infrastructure in place to make this happen.
Let’s wait and see.
The only scenario we will have for sure as NFC gets incorporated into cell phones, retailers, credit card companies, wireless carriers, device makers and operating system providers is a tough competition in the fighting for a slice of the emerging market.
http://www.nfc-forum.org/aboutnfc/
http://techcrunch.com/2011/01/25/iphone-5-nfc/
Just a couple of years ago, I would have never imagine being able to walk out of my house without my wallet because I just never know when I am going to need to use credit or debit cards. Obviously, with this new technology that scenario will soon change as more companies start to emerge with this mobile payment system. I think this is just another way to track down consumers' behavior to be able to have targeted and more personalized advertising.
ReplyDeleteI imagine that take time for retailers, super markets, gas stations, etc to get use to this system and implement this new technology into their POS. For now, I will still carry my wallet with me because you just never know when your phone's battery will die.
I agree with you and Paola. This technology is incredible, and dangerous if you're as serious a shopper as I am. Gone are the days when I would leave my AmEx at home to avoid getting into trouble. Now, I have my card permanently intertwined with my phone (which is always with me!). I can see this turning into another huge battle between Google and Apple; however, I believe that Apple will win largely in part because of their itunes store. Like you said, we will just have to wait and see.
ReplyDeleteThis does have truly incredible potential and will be a tough battle between some pretty big technology guns. The organization that comes out on top will be the one that manages to not only do it better, but to gain market share by convincing people it is completely secure and not dangerous. Imagine, if people are even suspicious of a normal cell phone, how it might be difficult to sway the culture. In the end, it will win out though and NFC will just be the norm. That is until the next big advancement happens.
ReplyDeleteNice post.
ReplyDeleteAs for the Google vs. Apple aspect, I think Google is in a much better spot to take advantage of the mobile payment opportunity. Because Google has been a marketing intermediary for so long, they are already strategically placed between customers and businesses. This is the exact place a mobile payment company needs to be.
However, the most trusted intermediary when it comes to money are banks. And given that money stored in banks can be FDIC insured, it seems banks will have some active role to play in the nascent mobile payment industry.
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ReplyDeleteWhen the cell phone was first introduced, every one was amazed for the fact of having an artefact that could be carried without any cord or wire and being able to communicate like a regular house phone only that it was portable.
ReplyDeleteNow days phones hace ivolved so much that the mobile payment process for cell phones is being introduced, it is amazing how technology keeps moving forward. In a future not too far people will not carry any cards with them or even wallets, just a smart phone that will carry all the information with them. To tell you the truth, I did not see this one coming.
I like the fact that you brought up iTunes. If Apple wants to get in this game with Google, it would have to change the name of the application/program. But to be honest, this would be out of their league. Maybe they'll support the NFC in their phones, but not sync it with iTunes. They're about creative products and entertainment. Who knows? Perhaps I'm wrong and Apple will step up to the plate.
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