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Mobile Payment Technology Reaching Critical Mass?

Long predicted but always seeming to be “just around the corner,” mobile payments may finally have arrived. Apple's recent Apple Pay announcement may be seen in retrospect as launching the coming mobile payment revolution, but the underlying technologies — and alternative solutions — have been emerging for some time.

The fundamental technological enabler for mobile payments is, of course, the ubiquitous smartphone, with wearables promising to create even more, and new, opportunities. Technologies playing a supporting role in this shift include encryption advances, digital currencies, biometrics, NFC, Bluetooth, QR codes, and even the use of sound wave data transfer.

Apple Pay reflects the most conventional method of mobile payment. Based on the NFC capabilities of the iPhone 6, it supports point-of-sale payments using credit card or bank information and leverages the data Apple already has in millions of users' iTunes accounts.

Competing “mobile wallet” systems work similarly. For example, Google Wallet also uses NFC but is passcode based, compared to Apple Pay's use of a fingerprint scan for authorization. Other companies, like Walmart, are developing systems based on scanning bar codes. And, of course, major credit card companies and banks have developed (or are developing) their own mobile payment platforms.

Also jumping into the mobile payments fray are numerous other apps and devices, many from tech startups that didn't exist 10 or even five years ago. For example, the just-launched “wallet replacing” Plastc digital smart card (and associated mobile app) lets users consolidate credit and debit card information, as well as other cards and coupons, on a single NFC-enabled device.

This follows the similar and previously announced Coin device, which dynamically replicates the magnetic strip on the back of typical payment or gift cards and promises an all-in-one credit card replacement. Due to launch in spring 2015, it can be programmed wirelessly via Bluetooth using a smartphone app and uses a headphone jack dongle to allow users to swipe in their card information.

However, the idea of replacing or consolidating physical cards with yet other, alternative, physical devices may be behind the curve in the face of an ever-expanding smartphone/app ecosystem. Pointing the way forward may be examples like the social media photo messaging service Snapchat's just-launched Snapcash payment option. It works inside the Snapchat app using Square Cash, which appends a cryptographic signature to every payment to enable users to send cash instantly to other users — and presumably eventually e-commerce vendors — using a debit card-based system.

Similarly designed around a social media-based approach is the popular Venmo social mobile payments app, which allows users to send money easily back and forth to each other over a 256-bit encrypted connection. Launched in 2009 and bought by eBay's PayPal division last year, it too is now looking to expand to store payments.

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12 comments on “Mobile Payment Technology Reaching Critical Mass?

  1. Ashu001
    November 27, 2014

    It all really depends where you are looking at establishing your Business today.

    If you are looking at Asia and Africa then Guess what?

    They have already gained Traction in the Mobile Payment Technology Space.

    It may /may not be as sophisticated as Apple Pay but Guess what?

    It works and it has gained maximum recognition all over the Region.

    The Important question is to ensure that the market is not fragmented between different technologies as well as Region-wise.

    As long as we safeguard that issue there are no real issues as such.

     

  2. Himanshugupta
    November 28, 2014

    This may not be new but apart from paying through the credit card using the mobile, people have options to pay through an e-wallet provided by their mobile carrier service provider. This is like a all-time debit card where one can send a transaction from one's e-wallet to another's e-wallet. Right now this works only for intracarrier acccounts. 

  3. Susan Fourtané
    November 28, 2014

    That Coin device sounds and looks great. When your wallet gets fat and heavy with lots of cards you only want to simplify. I have started  to leave behind half of the cards for that reason, which is a problem as it is one more  thing to think about. 

    But, they seem to have thought only in the US, according to what the video shows. 🙁 What about using that Coin in Europe with chip and PIN as we use? Electromagnetic bands have been obsolete for a long time and are not as secure as chip and PIN. Maybe they will think about it before they launch the device. :/  

    -Susan

  4. Susan Fourtané
    November 28, 2014

    It's good to see mobile payments growing and becoming more popular. It's just one more step close to a cashless society, which believe it or not is not too far away. 

    -Susan

  5. FLYINGSCOT
    November 28, 2014

    I know this is the way of the future and should be embraced but I sure to worry about the security of these systems.  Having just been the victim of credit card fraud to the sum of $3k I am a bit sensitized right now.

  6. Taimoor Zubar
    November 29, 2014

    @Flyingscot: You cannot have 100% security anywhere but there are ways to make the system more secure. One of them is using two factor authentication whereby any transaction you make has to be verified by you using some other means.

  7. Taimoor Zubar
    November 29, 2014

    @tech4people: I think the best part about mobile payment systems is the fact that the developing countries have taken a leap over the developed countries in this. Primarily because a lack of infrastructure, scattered rural population and other reasons, developing countries have really turned around the situation when it comes to mobile payments and branchless banking.

  8. Ashu001
    November 29, 2014

    Waqas,

    Have to agree wholeheartedly with your Sentiments!

    Brilliantly,Brilliantly put points!

    In fact I look at the lack of this Basic Infrastructure(banking networks) in Developing Countries as a major Positive.

    Why is that so?

    That means there are no Lobbies of well paid Bank Executives who will rebel and protest against these changes which can move to Disintermediate them or practically make them irrelevant in the Larger scheme of things.

    Great move in more ways than one!

     

  9. Ashu001
    November 29, 2014

    I have seen many countries in Africa and Asia where nobody bothers with bank Accounts(and Transfers) anymore for small-small transactions.

    They simply use their Cellphone Balance as Cash Credit!!!

    Cellphone Companies have pushed this idea aggressively in Developing markets(and its been quite successful too).

    Cellphone Companies are the Happiest as they constant Business and their Phone Credit becomes equivalent to Cash(which is what it really is).

    For instance,Lets say you have a Phone with 200 dollars of Credit on it[It works only pre-paid Phones which are the default all across the Developing world].

    The User can use those 200 dollars to buy stuff (using Store Apps,etc ) or Transfer that Cash to someone else(via Phone Apps).

    So Simple and convenient(especially for Small transactions).

    This has not just reduced crime (no cash carried anywhere) but also Disintermediated the Costly Banking Network entirely.

  10. Nemos
    November 30, 2014

    If I understand well, instead of having a real plastic card we can use our mobile to do our shops. If that is correct I don't believe is an innovation and I doubt it will be a success story as can be used only as a substitute service of the card does not function.

  11. Susan Fourtané
    December 1, 2014

    Flyingscot, 

    You are rarely going to get 100 percent security unless you use a good security protocol, have your passwords encrypted in the cloud and distributed in several servers, like the new IBM's security protocol proposes, which promises to be safe even if you try a dictionary attack, or brute force attack. 

    Now, let me tell you that I have embraced any system of payment that doesn't involve me carrying cash since my bank account was left empty after a pickpocket stole my wallet in a tram when I was living in Prague. Since then, I never carry cash and my debit card has several security tricks. 

    I understand your case, but imagine that you were left, like I was, with zero money, that all what you were carrying that day in cash (rent for the month, money to deposit in the bank, etc., plus all what you had in your bank account was stolen by someone who didn't think you were not going to have money for anything until your next payment next month). It takes years to recover from that. 

    So, any new payment system is supposed to be better than anything that we have previously used. We have to be vigilant at all times because thieves are everywhere. 

    -Susan 

  12. t.alex
    December 27, 2014

    There are nothing secured in this world anymore. We only concern about convinent here. People think Apple pay isn't secured? What about credit card. I don't think its safe neither. People think Bitcoin- crypto currency isn't safe? It is sure more safe than credit cards.

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