Mobile Payments – Reloaded !

The retail world has saw quite a lot of new product launches with respect to the mobile payment services in the past few months from Paypal, Google and other few companies.

Paypal recently launched “Paypal Here” where the merchants would be provided with a triangle shaped credit / debit card reader which will fit into the mobile phone headphone jacket. The merchants would need to install the Paypal app for performing transactions with the card reader. Paypal claims that the data between the card reader to the mobile phone’s app will be transmitted in encrypted format and hence there is no way for hackers to hack the data.  What’s significant benefit does this provide to the merchants when compared to the current scenario? Well, perhaps the only thing which i think and what Paypal claims is that you can even take a photo of your credit / debit card to perform the transactions instead of using the card reader. How this is revolutionizing the payment service in the mobile world?   The answer to that is you need not have an NFC enabled smartphone to make payments. But can that be considered as revolutionizing the mobile world? In my opinion – not ! This move by Paypal is a direct attack on SquareUp – which first introduced the mobile payment service using credit /debit card reader. Paypal takes less service charge than SquareUp thereby challenging SquareUp directly on the profits.

Next inline is the Google Wallet from Google where users can do in-store as well as online payments. For in-store payments you need to have a NFC (Near Field Communication)  enabled phone and obviously NFC enabled reader. To me, this looks to be a “cool” way of mobile payment than those used by Paypal (or) Square.  Users do not need to carry their credit / debit cards all the time and hence this is really enriching the mobile experience in the payment space. The service would take sometime to have a stronger footprint since the number of NFC enabled phones are limited as of now.

There is yet another way of mobile payment service being pioneered by a startup called “Seconds” which uses the traditional way of using SMS for payment service. This would help the non-smartphone users to have payment services. I think there has been a talk about using SMS as a payment service for a long time, but do not  know if there way anyone who cared to introduce e-commerce in SMS. The customers have to register their mobile number as well as a credit / debit card to “Seconds“. Customer uses SMS to place an order to a Seconds number of the merchant. Each merchant will get a unique URL for hosting their service in the Seconds platform for performing the transaction.  In my opinion, Seconds looks  like a platform to provide services for “To-Go” restaurants and would be bulky for transactions for any other business – say a retail store and the likes given the amount of work involved in making the transaction.  It’s probably a tough challenge for  Seconds to compete with other biggies in the business.

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