Mobile Payment, Please


by Samuel Greengard

Smartphones are several years old yet mobile payment systems are still in the horse and buggy stage. Paypal, which is about the closest thing to a universal payment system, is still relatively clunky and few people use it on a regular basis. Other attempts at m-payment systems have come and gone.

So, news that Starbucks is adopting a true mobile payment system is highly welcome. No, it won't serve as the foundation for a universal platform, but the company has the concept right. You load money or store your credit card information in an app in your iPhone, iPod Touch or Blackberry and hold it up to a scanner when you pay.

I tried it. I like it. It's simple. And it doesn't require a major investment for stores or any real change of behavior for customers. In fact, many smartphone owners already rely on e-barcodes to redeem Groupon promotions or scan e-boarding passes at the airport.

However, this every-app-provider for himself approach presents a problem. Do I want to have 42 m-payment apps on my iPhone so that I can pay at different places?

Let's not even go there.

Fortunately, major banks and credit card companies are beginning to recognize that there's value in m-commerce. Let's hope that someone figures out a convenient way to pay for all sorts of transactions using an m-wallet. The best scenario would be a direct and secure link to my bank accounts or credit cards.

Recently, three major wireless providers--Verizon, AT&T and T-Mobile--introduced plans to construct a near-field (NFC) communication platform called ISIS that will allow smartphone users to tap their device against a terminal and complete a transaction. The system will also store coupons, tickets and transit passes.

Visa, too, is experimenting with an m-payment system. And former Google CEO Eric Schmidt announced last November that Android smartphones would soon support mobile payments through NFC chips. Users would simply bump their phone against another phone or at a terminal to make a purchase.

Then there's Apple, which is rumored to be developing an m-payment system too. Can you say one hundred million iPhones?

I suspect that an all-out m-payment war will soon develop. All of which will leave consumers and retailers thoroughly perplexed and somewhat paralyzed. After the dust settles perhaps we'll finally wind up with a bona fide m-payment system.

For now, enjoy your wireless jolt at Starbucks.