Developments in mobile payment technologies

In my last post I briefly touched on the emergence of mobile payment solutions. There is a lot of activity relating to these payment options, as businesses and technology developers compete to be first to market. As is often the case, customer acceptance will likely determine which payments solutions are adopted – think VHS versus Beta all over again. Here’s an interesting article from the Globe and Mail which gives the low down on what lies ahead.

The premise is pretty simple. Digital wallets aim to replace your conventional wallet with an app on your smart phone. Digital wallets are pin protected and safe, and are being developed to store your different credit card information, and even link with various loyalty programs and special offers from retailers. Instead of paying with traditional plastic cards, users simply present their cell phones to the retailers and information is electronically transferred. Voila!

Google Wallet has already launched in the US. The service, however, is currently only available on certain types of mobile devices, and uses only one type of credit card. Some online sources report it will be launched in Canada in early 2012. Starbucks, meanwhile, has got a head start over many businesses in Canada, by offering mobile payment via iPhone beginning earlier this month.

The companies competing in the mobile payment space are noteworthy due to their breadth. Internet search engines, wireless giants, banks, credit card companies, and new entrants are partnering and working to create the preferred solution. Only about one in 10 Canadians are currently using mobile payment and banking today, according to this CBC News article, though this number is likely to increase during the next 12 – 24 months as the story continues to unfold.

So, what does this all mean to you as a small business owner? During these early stages, start by taking a look at your customer base. Are you customers likely to be early adopters of new technology? Do you think this style of payment solution will be important to them? Speak to the local representative from your payment solutions company, who can help evaluate your current equipment and where they stand with new mobile payment solutions. The good news is, as mobile payment solutions are still being developed and have yet to be widely adopted, you still have time to evaluate their relevance for your small business.