Mobile payment is sector is getting hotter and hotter these
days. The idea is that you can use your
mobile device to pay for anything which will eliminate the need to carry credit
cards and cash. A start up called Square is providing that feature. It charges
a flat fee of 2.75%. One of Square’s biggest deal was getting Starbucks on
board- this has proven to be a very successful deal for both parties. Square linked existing ideas and products with
innovation in design and usage to create a new technology , an idea that could
be revolutionary. Square’s success is
uncertain, but the Starbucks alliance is likely to be only the first for it and
other mobile payment operators. Silicon Valley will become less about the
dreamers and more about the marketers, the connected and the everyday.
This is a very interesting article published by the NY times in that regards:http://dealbook.nytimes.com/2012/08/14/in-silicon-valley-finding-the-next-big-thing-in-the-ordinary/?nl=business&emc=edit_dlbkpm_20120814
2 comments:
Interestingly enough, it seems that many of the big retailers are following the mobile payment trend, as discussed in an article I read recently (link below).
Walmart, Target, CVS, are only a few of the large retailers that have formed a group, seeking to develop a system of mobile payment similar to Square Inc.
It seems that the ease of mobile payments will be a tremendous trend in the coming years, and although we already live in a "cashless" society, maybe in the near future there will be a time where we really can leave home without even a credit card.
However, speaking as someone who recently lost their phone, I can only imagine what might happen if we live in an age where I completely rely on my phone for everything, including shopping. At least right now, I can go into a starbucks and get a drink, without or without my phone.
http://www.nytimes.com/reuters/2012/08/15/business/15reuters-retailers-paymentnetwork.html?ref=technology
A couple of interesting points re: this post. Not only did Starbucks agree to have Square at the point-of-sale (POS), but it actually invested in them...at a $3.25 billion valuation. Square's co-founder, Jack Dorsey, is incidentally a co-founder of Twitter.
The biggest problem with Square is that the POS is becoming an increasingly crowded space. As Class Blogger (if that IS your real name...) stated, a group of retailers are looking to implement their own service. Swipe, a Square competitor, is rolling out. Isis, a JV of the major Telcos and Discover is coming next year. PayPal is becoming increasingly integrated at the POS. Google Wallet is rolling out aggressively after a slow start. In other words, the number of payment options is growing rapidly.
Ease of use and fees are not enough to compete. I believe that linking a payment mechanism with a broader local commerce initiative is the key. Through M&A and organic builds, I believe that in a few years, this will be an oligopolistic market with a few large players offering payment solutions, merchant acquisition, loyalty rewards, deals, reviews, and other location-aware services in a consolidated platform experience.
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