Some technologies just seem to take a long time to appear. The talk of mobile phone credit cards has been working the grape vine for years now. It is possible to have a 3D TV in your living room; most people would think that having a simple payment system integrated into a mobile phone would already be functioning.
To some degree it is already possible to pay for things using a mobile phone. The iPhone allows its users to buy digital goods such as music and movies; with the Amazon app it allows the purchases of pretty much anything. It is the step into paying for goods or services in real world shops much like a credit card that the IT community is anticipating.
A recent report on web-native payment platforms from O’Reilly and PayPal titled ‘ePayments: Emerging Platforms, Embracing Mobile and Confronting Identity,’ discusses three main technologies that can utilise a mobile phone as a credit card.
RFID tags that can be put into mobile phones and used in over 150 stores in the Silicon Valley area. The RFID tag has a corresponding Blinger that the phone is tapped onto; the Blinger subtracts the purchase from a PayPal account or prepaid account. A receipt is then texted to the phone.
Bump Technologies’ is all about close proximity technology much like the RFID and Blinger system. Bump technology is being developed to be used between two mobile phone devices (BlackBerry, Android or iPhone). When the two devices are bumped together they can share data of any kind (music, text, payment etc). PayPal has a bump system that lets users tap payments from one phone to another. Bump technology uses Wi-Fi signals rather than radio waves, so the data is travelling across a network or cloud.
Starbucks have been using a system that involves a simple visual scan of a bar code. Install the Starbucks app on a phone and then add credits either online or at the register. Once there is credit to spend on the phone the app can launched and swipe away to pay for that large latte with extra foam. The app displays a unique barcode on the phone; a scanner connected to the register scans the barcode and debits the credit on the phone.
The question the industry is asking is how is this really going to benefit users? The merchants and payment providers are desperate to roll-out the system as they will be able to gather more information on customers and how they shop. The customers have little incentive to switch from the real credit cards, maybe the enticement of discount and vouchers will convince people to swap.
Look out in the future for a variety of new devices on iPhone, Android, RIM, Nokia and HP/Palm.