The last few years has seen a growth in the use of smartphones for payment of goods and services beyond anything predicted. With the unprecedented use of mobile payment for everything from dinner out to an engagement ring, some businesses are beginning to wonder if the service will soon outstrip the use of credit cards for payment. While in Europe and Asia this new form of payment is growing by leaps and bounds, many researchers see a reluctance of North American customers to use their phones to make payments. The reason is security. But new offerings for global payment services on smartphones many turn that concern around, and soon.
Apple and Tokenism
One of the latest players in this market is Apple and they have good reason to believe they will succeed where others have failed. The reason is the way they make these payments possible with the highest amount of security. The system is called tokenism and how it works is complex and simple at the same time. While the system continues to link the account to a user’s credit card account, the number of that account is never in play. Instead a token of unique codes is used to transfer the data. When combined with the touch system that requires the users fingerprint to activate the system, a whole new layer of security is introduced.
While some may see this as another form of marketing, the rise of retail apps that allow customers to purchase online and pick up when they arrive have changed many buying habits. Coffee shops such as Starbucks and Tim Horton paved the way with their payment apps that allow you to order your coffee on the way and bypass the line at the store when you arrive. Research has shown that as many as 40% of online users point to their coffee purchases as their introduction to online payment through their smartphone. For loyal customers this is an easy buy-in and one we may see replicated in greater number for small retail purchases.
Craft Markets and Square’s Global Payment Services
One of the big success stories illustrates a need and finding a way to meet it. When one of the founders of Square, that ubiquitous little gadget you see everywhere at crafts fairs and farmer’s markets, found they couldn’t complete a purchase because the vendor couldn’t take credit cards, he created a way for anyone with a smart phone and a data line to complete a purchase. The hardware turns a smartphone or tablet into a point of purchase device, all without a huge investment and offering security through the fact it doesn’t store any purchase information on the device. With the growth of small business and entrepreneurial businesses, this is a device that was timely for today’s shifting marketplace.
Past and Future
While you can’t talk about mobile payments and global payment services without mentioning PayPal, there are many ways that online payment will move beyond this platform. Anyone in retail at the time of the introduction of PayPal knows that initially it was ignored as simply a platform for eBay and continues to be a prime payment for online auctions. But as many online workers have found, with the marketplace opening up to global projects having an online secure payment method makes working across international boundaries easier than ever. From marketplace vendors to coffee shops and online workers, the world of global payment services continues to change and grow. It is up to business to find the best method for their particular enterprise.