August 22, 2012

I was recently at a street fair and when I went to pay with my credit card, it was processed through a cool little device (Square.com) connected to the owner’s iPad. Made me wonder just what is the future of mobile-payments?

As reported in the Wall St. Journal, while few shoppers use their phones as mobile-payment devices today, financial institutions and technology firms are betting billions that consumers will soon find a “digital wallet” on their phones as easy to use as credit cards and debit cards. The numbers are on their side.

A Federal Reserve report quoted in WSJ states that 87% of Americans have a mobile phone. Nearly half of those are smartphones. Among people with a mobile phone and a bank account, 11% used mobile payments in the previous year, the survey found.

More than a dozen big merchants have announced that they will create a new service, Merchant Customer Exchange, to compete with Google Wallet, which began last year on Android phones. Starbucks just inked a deal with Square. The future is here. Mobile-payment transactions are already a $172 billion business and it is expected to grow to $600 billion worldwide by 2016, according to market-research firm Gartner Inc.

Stay tuned – the battle to control your phone (and wallet) is just beginning.

One comment

  1. YES! Had a recent similar experience at an art festival. The machine was different but the transaction was fast, & I’m told, secure.

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