Mobile payments are redefining commerce, and some countries, particularly in Africa, are already using them as their primary payment method. While Asia and Europe have also started to get onboard, the U.S. still seems to be lagging behind with only about 6% of all American adults reported ever using mobile payments.
Some major players that are already leading the way in the mobile payments space include PayPal, Google Wallet and Square. Below is a quick look at how these companies are utilizing mobile payments and how banks and retailers can use them to capitalize on this lucrative market.
PayPal
PayPal, which is well known for making online payments simpler, is now also offering another service called PayPal Mobile Express Checkout. The service has been designed to allow mobile users to shop more easily, safely and efficiently right from their mobile phones. Mobile Express Checkout is currently available for iPhone and Android 2.0, and is already being used by companies like Nike and Buy.com. It provides a high level of security and many consumers are already familiar with PayPal and see it as a trusted service provider.
Google Wallet
The Google Wallet mobile app allows users to securely store their credit cards online and on their mobile phone, thus allowing them to bring their credit cards with them wherever they go. Stores that accept Google Wallet as a payment method allow users to pay and redeem special offers just by tapping their phone at the checkout. Google Wallet can also be used to pay securely online with merchants who accept it. Google Wallet has already partnered with major retailers like Macy’s and American Eagle Outfitters and Jamba Juice.
Google has partnered with MasterCard PayPass to give Google Wallet users access to their 124,000 merchant locations. However, Google Wallet is currently only available for Sprint’s Nexus S phone, which could severely limit its user base.
Square
Square was launched in the beginning of 2010, and targets mainly small to medium businesses. Its mobile payment platform allows iPhone or Android users to accept credit card payments through their mobile phone. This is possible with the help of a small magnetic strip reader that attaches easily to a mobile phone’s audio jack. Square has become extremely popular with small business owners, and recently surpassed the one million active merchants mark. Visa recently also made an investment in the company, which now processes over three million in mobile transactions every day.
Mobile payments will continue to be a hot topic for 2012 as more retailers and issuers will make their choice on whether to move forward with NFC payment technologies. As more and more payments technologies emerge, mobile payments will quickly become a necessity for financial institutions and retailers, rather than an afterthought.
