Imagine a world where it was no longer necessary to carry cash or a credit card, but only carry your smartphone to make payments. Your smartphone already carries your photos, social updates, and email, why not your money too? Using mobile payment technology, it would be possible to not only still use your smartphone for all of its traditional uses, but also as your wallet for making payments. In this paper, I take a deeper dive into three mobile payment technologies destine to change mobile payments: The Isis service from Verizon, AT&T and T-Mobile, the Google Wallet service from Google and Motorola, and the Magneto mobile Payment application from white-box mobile application provider Magneto. What are the advantages, disadvantages, and services of each?Read on to find out.
You don’t have to look far anymore in the news to see the grim financial news we are facing: roller-coaster stock prices, crumbling fiduciary and monetary systems around the globe, and joblessness all seem to be contributing to a global financial crisis which hits households from Kenya to Kansas. With U.S. consumers alone holding over 609.8 million credit cards and averaging $15,799 in debt per household, we begin to see the makings of a society focused on using credit on a regular basis. Aside from our credit cards, we are also becoming a society focused on smartphones to do more and more for us all of the time. They have become our source for entertainment, Internet access, and social interaction.
Now imagine if we were to infuse a credit card into a smartphone so that you would no longer need to carry a credit card and cash? Taking a look through three current services,each has good points and bad points, but all have the potential to move yourAmEx to your Android.
The first mobile payment solution is Isis, which plans to launch in the first half of next year in Utah and Austin, TX at first, but will be available worldwide shortly thereafter. Isis formed as part of a partnership between Verizon, AT&T and T-Mobile to provide a mobile payment system using Near-Field Communications (NFC) antenna available on select smartphones from BlackBerry and HTC in conjunction with a mobile payment application. Initially, the service garnered little interest from vendors and businesses, at least until the group had agreements with Visa, MasterCard, American Express, and Discover.
Isis is the first service to havethe support of all four major credit card companies. This is a new venture for these companies, however many within the respective organizations have a great deal of faith in NFC technology, and with Isis having backing from credit card companies and some banks, they have even stepped up their integration timeline and may launch even earlier than next year.
Not to be outdone, and with partnerships of its own, the recently launched Google Wallet is the search engine’s dive into a competing NFC-based mobile payment technology. Google Wallet uses the same NFC hardware, but instead pairs it with Google’s own proprietary smartphone application. Like Isis, Google Wallet has agreements with Visa, MasterCard American Express, and Discover. However, unlike Isis, Google’s carrier agreement is with Sprint and First Data only.
The major downfall for both Google Wallet and Isis is that there are simply not enough NFC-enabled handsets currently in the market to attain a strong adoption of the service; however Google’s recent purchase of Motorola has many industry leaders feeling very strongly that a rash of NFC-phones are coming soon.
Taking a step away from NFC technology, there are several smaller mobile applications vying for preferred status among smartphone users, including an organization called Magneto, who sells an entire white-labeled ecommerce solution for online vendors. Magneto differs from Isis and Google Wallet in that customers are not able to use their smartphones to pay at the register, but they are given the option to buy from a vendor’s physical store, online through their computer, or through a mobile application using the Magneto infrastructure.
As of this writing, Magneto is only available for iPhone, but since the application is not dependent on a handset or a carrier, many smaller vendors can implement the entire ecommerce solution through Magneto for much less than they could if they were to install NFC readers in their businesses. Also, Magneto is available worldwide and able to be implemented in a very short time and with very little infrastructure commitment, making it very appealing for a small business owner who wants to offer customers a multitude of ways to pay for products.
Smartphones have changed our lives, and there is nothing to suggest that people will start resisting that change. As technological advances continue to give us faster smartphones and faster browsing, software applications will continue to grow to best utilize the provided hardware. Mobile payments are a relatively new concept for all of these three organizations and carriers, however market research and continuous customer interactions have ensured the stakeholders in these organizations that they want mobile payments via smartphone, and NFC or mobile payment options seem more than poised to make it happen.