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.
To read the rest of this article, visit EBN sister site EDN.