When will customers demand mobile payment awesomeness?

11 Feb
2012

Every now and then, mobile payment pops back up in the news. I recently prepared a dossier for our member companies summarizing the state of mobile payment – in short: many angles, very few use cases, no widespread adoption in sight. I might be wrong but my impression is that this is due to all players in the market aiming to make their solution the dominant one. However, given that in Germany, people currently pay using cash, EC cards, credit cards and direct debit, it should be clear that mobile payments won’t be a single platform, either.

One area I see surprisingly little demand in for mobile payment adoption is the customer side – merchants will do anything to lower their costs, and payment providers are eager to push mobile payment into the market. But customers? Go out and ask people if they have an EC card, and if so, if they know what Geldkarte is. Then tell them that if they have an EC card, chances are it has a Geldkarte chip integrated into it. I use it all the time to buy stamps from the few ATMs that Deutsche Post has in Berlin and you will too once you realize how much easier it is than looking for EUR 0.55 in coins.

But what about bigger items? Last weekend, I paid the catering company for our Asia seminar – in cash. We probably could have transferred the money afterwards, too, but that’s not what you as a merchant prefer. Still, as the customer, I don’t feel like transferring the money in advance, either. End result: we settle the invoice on the spot, and as cash is the only viable way to do that, accept the inconvenience of cash.

If Square or iZettle ever make it to Germany, it seems like this would be an excellent way of replacing cash. But why not take it a step further? Why can’t our catering company integrate their billing solution with Paypal and print a QR code onto their invoice? (Think Google Sesame for a similar way of bridging a gap intelligently using QR codes.) I am handed the invoice, whip out my phone and scan the code using my Paypal app. Instead of typing in the amount, recipient and description, all the data is contained within the QR code. I am left to confirm the payment on my phone and within seconds, Paypal can pass along the payment to our supplier. This would work even better if there was a standard format for payment QR codes, so that you could use other payment providers, as well.

Just as with Geldkarte, my impression is that people are simply unaware of the potential that is technically available to them. Of course the questions of privacy and security remain, but so does the danger of being mugged ten feet from the ATM you used to withdraw cash. Personally, I don’t feel compelled to work on a QR code payment solution (- then again, does Paypal have an affiliate program?). If this approach existed, however, you can bet I would be using it within minutes. If you think it through, you can even come up with an app that creates these QR codes on the fly to receive payments from friends, as inspired by ShareMyApps for Android.

I am not sure to what extent Paypal’s Singapore test project implemented this: people on the Singapore subway could buy Valentine’s Day presents by scanning a QR code on a large poster, logging into their Paypal account and completing the purchase. I am more concerned with everyday purchases, however, where I don’t need/ want to enter my shipping address or look up availability of a product. Of course, once the full extent of NFC’s glory has reached us, there won’t be any need for QR codes. As soon as we get rid of invoices.

Photo by stevendepolo | flickr.com CC-BY

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