The current mobile payment’s early stage

The mobile payment industry is right now is in a state like the time when the first credit cards first came to market. When the first credit cards came to market, some of them didn’t work on some stores and there was not a standard yet like today where all credit cards work wherever. Today in the mobile payment industry the situation is the same. There are different mayor players that are all trying get into this new business. They all want to gain customer adoption and change customer behavior.

Today, the most relevant players in the mobile industry are the following companies. These companies are doing the following:

  • Paypal: Paypal is partnering with Discover to offer consumers a special Paypal card that they can use in normal stores (brick-and-mortar) to buy from the paypal account. Paypal’s advantage is the amount of users that it already has.
  • Square: Square has a technology with allows a small device (dongle) to be plugged into your telephone headphone jack and use the phone as payment terminal. Square is an online merchant that has relationship with the major credit card companies. Square is offering small and medium businesses (with less than $250,000 in revenue) since August 2012 an option to dump their normal credit card processor and fees of 2.75 percent per credit-card swipe and instead pay $275 a month with no fees to use Square. This strategy is very interesting because it offers merchants a different (and cheaper) solution to enter mobile payments.
  • Google Wallet: Google is entering mobile payments using NFC (near field communication) which is a new open technology with an open standard that uses a special chip that allows your phone to make payments. An important note about NFC is that not all phones right now come with an NFC chip inside. The technology is not yet offered on all phones. This will change in the near future. Nokia, blackberry, Windows phone 7 have indicated that they will offer them soon in 2012. It looks like the companies will commit to offering NFC chips on their phones. Apple has not yet confirmed that they will add NFC chips but if all the major companies are doing it, Apple will most likely do it as well.
  • Visa: Is offering a new digital wallet service called which allows users to make mobile payments on stores with only their email and password. This service accepts not only Visa cards but also MasterCard, American Express and Discover cards. Visa plans to add this option as well as in the future leverage other technologies like NFC or QR codes.
  • Mastercard: Offering a new digital wallet service called PayPass which is an extension of their known PayPass brand and offers tap-and-go, NFC-enabled payments that work via PayPass-enabled (NFC) phones, cards, key fobs, or mobile tags at over 441,000 locations.
  • The Digital Wallet strategy from Apple Passbook, Microsoft Account, Isis: These are not really relevant :). Let’s wait to see if in the near future these initiatives gain momentum.

 Today in the mobile payment arena all the companies are trying to do a couple of things… Get users and standardize the technology! Since this new medium is relative new. The standard hasn’t yet been defined on what consumers and users will want to adopt. Everyday it seams like there is a new story about a new deal in the mobile payment industry with big companies trying to get into this action and gain users.

The mobile payment business is moving at a ver rapid pace. Let’s see how this unfolds in the very near future. It is very interesting to see which which technology will win  and how the developers and companies can create experiences to enhance process.


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Felipe Suarez