EBay estimates the value of goods sold via its eBay iPhone app topped $400 million this year alone.
One upstart is called Square, which offers a smartphone app and a small piece of free hardware that plugs into a phone. The hardware swipes the credit card and charges $2.75 plus 15 cents for a swipe, or 3.5 percent plus 15 cents for a keyed-in credit-card entry. There are no contracts, no set-up fees, no monthly fees, and no monthly minimums. It has served as an alternative to payment gateways that charge higher fees.
The obstacle for NFC in the United States is that most merchant card terminals do not even read smart cards, whether NFC or the European standard EMV; they only read magnetic stripes. Merchants who have been reluctant to foot the bill for smart terminals
Apple has just hired Benjamin Vigier, an expert in the field of near-field communications, as its new product manager for mobile commerce, reports NearFieldCommunicationsWorld.com, a trade publication for NFC-based products.
With Apple, a mobile payment system tied to your iTunes Store account is going to be a hard deal to match, in terms of ease of use, simplicity, and cost, since the infrastructure is already largely in place. Users are also accustomed to using Apple’s system to buy things (with well over 125 million active credit cards tied to accounts at this point), and they can tie it to a payment method of their choice. Also, there’s the question of platform access. Apple will likely allow a mobile payment app from AT&T (or any other provider, should it end its exclusivity) on the iPhone. But the next iteration of the iPhone could very well have its own payment hardware and software baked right into the OS, and it will be carrier agnostic and won’t require any additional downloads.
Mobile Payments Overview
Mobile Payments &
Near Field Communications (NFC)
U.S. mobile payments will total
$214 billion by 2015, ballooning
from $16 billion this year.
That’s an average annual growth
rate of 68%.
Mobile Shopping Grew 310% On
Black Friday, 27% Increase In
Mobile Peer-to-Peer (P2P)
Peer-to-peer (P2P) payments, as with other peer-to-peer services like
music-sharing, are informal transactions made between two people.
Mobile Point of Sale (POS)
Unlike mobile P2P technology, which may use text or a software application to
transfer funds, mobile point-of-sale (POS) is all about hardware.
What is Near Field Communications ?
NFC, or near-field communications, is a short-wave
radio communications technology that provides a way
for two devices to communicate small amounts of data
when they're placed about four inches apart.
Mobile Payment NFC Demo (YouTube)
What are we waiting for?
• Merchants reluctant to invest in smart terminals
• Lack of mobile devices that support NFC
• Too many players involved
• Potential “leap frog” technology alternatives
AT&T Inc., T-Mobile USA Inc. and Verizon Communications Inc. formally
announced their long-rumored mobile payments network Isis, which is
working with Barclaycard US and Discover Financial Services to bring payment-
enabled mobile phones to consumers.
The venture will be looking to operate an open network, adding that it will
focus on mobile couponing and other commerce services in addition to
Apple iTunes has well over
125 million active credit
cards tied to accounts and
they can tie it to a payment
method of their choice.
• NFC will be included in “Gingerbread Release”
• Extending NFC Capabilities:
• Replacing Hotel Keys
• Location Tracking (incentives, couponing)
• Airline Ticket Processing
Web 2.0 Summit 2010: Eric Schmidt (YouTube)
Eichenbaum, Peter. Discover Gets Historic Opportunity with Mobile Deal. Bloomberg. November 17, 2010.
http://www.bloomberg.com/news/2010 11-17/discover-gets-historic-opportunity-with-mobile payments
McAfee, Seamus. Mobile Payments Predicted to Skyrocket. http://www.creditcards.com/credit-card-news/mobile-
Ray, Bill. What will Google do with NFC? The Register. November 17, 2010.
Johnson, Andrew. Mobile Payments Set for Surge, But Who’ll Set the Pace? American Banker. November 17, 2010.
Segan, Sascha. What is NFC, and Why Should You Care? PC Magazine. November 17, 2010.
Frommer, Dan. Mobile Carriers Launch a Payments Venture: Will Apple and Google Play Along? Business Insider.
November 16, 2010. http://www.businessinsider.com/mobile-carriers-launch-a-payments-rocket-will-apple-and-
Van Grove, Jennifer. Google Will Soon Power Mobile Payments. Mashable. November 16, 2010.
Dolcourt, Jessica. Making Sense of Mobile Payment. Cnet. http://www.cnet.com/8301-17918_1-20013480-85.html