The Finger is Mightier than the Pen

written by bethburgee on August 15, 2012 in eCommerce and Mobile with no comments
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When in a café the other day, it was clear that the familiar “cha-ching” of the cash register is quickly becoming a sound of the past. Replacing it is the uber-silent signing for a $3.45 chai latte with my pointer finger on an iPad. My initial reaction was “how nifty”. My second reaction was, “I wonder how often they clean that screen.” I digress. The news of mobile payments is all over my twitter feed. With Starbucks partnering with Square, GoPaGo, Belly and many other mobile payment solutions gaining increased recognition in the press, a Mobile Payments Committee has recently formed to give the arena some guidance and is lead by key players like Google, Inuit, AT&T, Verizon and so forth.

Seeing as how I rarely carry cash, the direction mobile payments is heading is rather appealing (that said, I did forget my phone today). There are however, some rather large barriers to entry including security, sheer volume of available apps, merchant participation and the tricky integration of loyalty programs, promotions and advertising.

The graph below by eMarketer (via shows that the future of mobile payments is promising. The World Bank’s July 2012 Report shows as many as 110+ mobile systems are out there. That might not seem like a lot – but how many “wallet” apps are you likely to download? Two? Three? Five at most? With the mobile payments industry just starting to boom and with so many competitors, will the growth be its own destruction? And while there might be many apps already in use, are there enough partner merchants to justify a download? A mobile wallet with no leads in my geographic location let alone merchants I frequently spend money with has little to no appeal.

When LinkedIn got hacked, my worry that people would have my work history didn’t bother me too much, yet if my phone is stolen or my mobile wallet is hacked I would have a very different reaction (read: FREAKOUT) due to the sheer ease of using mobile payments. With Starbucks serving wine and apps now, I would prefer my phone weren’t stolen for the purpose of a Starbucks binge.

Also in need of consideration is the impact on other industries. An economy that struggles to let go of its forgotten penny has a lot of ground to cover before they let go of their Kate Spade wallet. What are the repercussions for the Treasury of State or the fashion industry? Does a further departure from the Gold Standard have greater implications on global commerce (and no, I am not referencing Starbucks here)?

Clearly, I don’t have these answers. I do look forward to seeing what outcomes come from the Mobile Payments Committee next month and to see which mobile payments sink or swim in this electronic ocean of money. Until that time, I’ll keep my plain black chunky wallet close by.