There seems to be a new app or a new use for smart phones everyday. And to no surprise there is technology that enables a smart phone user to purchase items just by scanning a bar code displayed on their phone. The bar code would be linked straight to your bank account of course. So if you can do everything else on your phone what's the damage in making your smart phone your wallet as well? Security feels like it should be an argument, but isn't all of our banking information electronically organized anyway? It is hard to imagine that your phone would make your information any more accessible then it already is. Then there are the worries of functionality. We all have those moments where our phone does absolutely nothing it is supposed to. This could be an extreme turn off to potential users of this technology. This new technology also poses a threat to our favorite plastic occupants in our wallets. Visa and MasterCard recorded 2.45 trillion in U.S. consumer spending was through their products. The effect this new technology could have on big companies like Visa and MasterCard is not yet known, but we can probably bet on some sort of bite being taken out of their cake.
The implementation of mobile device payment may be a tricky one. Consumers would more than likely resist the change due to not enough merchants adopting the new technology and merchants will more than likely not jump into anything without knowing enough consumers will use the technology. This predicament could make it difficult for this technology to take hold. Regardless of the obstacles, it is my belief that one day in the near future smart phone payment will be a marketable business. It is yet another way to enhance the exchange relationship between merchant and consumer. Even with the concerns of security, functionality and implementation this new technology will become more popular as it already has been in Japan and the U.K.
Article:
http://www.bloomberg.com/news/2010-08-02/at-t-verizon-said-to-target-visa-mastercard-with-smartphones.html
Linked!:
http://e-marketingforsensiblefolk.blogspot.com/2011/01/pay-by-smartphone-at-starbucks-mobile.html
The consumers would always resist to this change in technology, because going by this customers find it difficult to keep hacker from their computer let alone in this phone. My question with this is when you misplace your phone for some reason how would the security of account details be protected. As you have rightly stated this technology would be difficult to hold.
ReplyDeleteI agree that there could be resistance on both sides whether from consumers or from merchants; however, I think that there will definitely be some sort of compromise reached when the contactless payment industry matures a little more. Right now most of the technology associated with this is in the very early stages of development and there are quite a few bugs that have yet to be worked out, but as the technology progresses there will probably be some stand-out industry leaders. Much like there are a few major credit card companies, there will probably be a handful of large contactless payment companies that reach agreements with merchants for wide spread use.
ReplyDeleteI think that it is also really important to point out that there is not very much marketing for these contactless payment systems. I bet if you pull out some of the credit cards in your wallet you will find at least one with Blink. I is surprising to me that these features are as widely advertised as the normal credit cards themselves. Maybe if they were advertised more, the contactless payment industry would be moving along much faster.
Great post Michele, I agree that this new technology can have an adverse effect on the business of the major credit card companies. However I believe that they too will have to get with the program (pardon the pun) and begin to use similar technology to attract both merchants and consumers to continue using their services. Marketing evolves every day and in order to keep up your profitability, keeping up with technology trends is paramount.
ReplyDeleteI haven't thought how major credit card companies would react to this technology, great perspective. As of now, I'm sure they don't find it much of a threat as most consumers still use their credit cards for a majority of purchases and most retailers don't offer such a service. I'm sure they are keeping a very keen eye on this and how it will progress. As more and more people find themselves in possession of smartphones we can definitely expect the demand for more retailers to offer such a service to rise. I don't think it will happen overnight, but you can bet this will be a growing trend in the future.
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