Goodbye to the Traditional Wallet, Enter the Mobile Wallet

The following is a guest post from Tope Abayomi, Founder of Emityme Apps.

Can your customers pay for product and/or services through a mobile phone?  If not, you should start thinking of implementing an option unless you’re comfortable  leaving money on the table.

New forecasts from PayPal show that this year’s total mobile payments (TMP) volume is expected to reach $3 billion.  But PayPal only serves a small part of the mobile payment market.  For all mobile payments sent through all systems in the US, the total volume is set to hit the $6B mark, according to Forrester Research. PayPal’s number is double from what they expected at the start of the year, as the number of customers using their phones to pay has soared.

And they spend a total of $10 million a day, compared to $6 million back in March — only months ago.

Options for Enabling Mobile Payments

There are several ways customers can pay you on the go, ranging from the now quite ordinary, like paying for a new ring tone or giving a donation to charity through a premium text message, to the advanced with solutions like Google Wallet — which just launched in September.  Some mobile payment platforms are less advanced than they look however.  PayPal supports both ‘text to buy’ and payments in mobile internet browsers,  with the latter being quite similar to a desktop payment.  There are other providers for mobile web payments too, and of course, credit cards can be used for mobile web payments as well.  But the combination of ‘mobile’ and ‘credit cards’ still makes many of us shiver, as mobile security doesn’t have the best reputation.

Google Wallet or Square — Big and small brands are heavily invested

Enter a trusted brand; Google has recently launched Google Wallet.  Can you actually pay for your day to day shopping and transport with your phone?  Google says you can, and it looks like there are no major competitors since Apple decided to forgo NFC integration in it’s latest iOS 5 release.  NFC (Near Field Communication) chips, the very technology Google uses for its Wallet, communicates with a new type of credit card terminal, without the need to physically swipe your card.  And your virtual loyalty cards are in the wallet too, so you don’t actually have to carry a traditional wallet around for much longer.  Maybe only to buy an ice cream, but more about that later.  How Apple will challenge this technology in later iPhone releases, very few people know, but it’s likely that retailers will choose to invest either in Google or in Apple infrastructure.

Meanwhile, Square has teamed up with Apple to develop a swiping device for the iPhone and iPad that plugs into the headphone jack.  With Square, anyone can take debit or credit card payments at a flat rate of 2.75%.  This may change the way we pay for products from small mobile businesses like ice cream, a burger or a newspaper. It’s a small step forward to losing the traditional wallet altogether.

Only one credit card company has so far joined Google Wallet, and it’s possible that the other card providers are waiting to see what Apple does before they invest in this new technology.  Google’s temporary solution is a virtual Google prepaid card which sits within the Wallet.  This card can be topped up with any credit card to begin using it for purchases.  Still, It looks like a lot of investment is needed from retailers, banks and credit card companies before we can actually go shopping without our wallet, but with our phone instead.

One thing’s certain though, mobile payments are set to change our world and you need to begin planning your strategy for allowing customers to pay you on the go.

About the Author

Tope Abayomi is the Founder of Emityme Apps, creators of iPhone and iPad apps.  When he’s not building apps, you can find him on twitter @emityme, trying to act cool.