Mobile Phones Become Mobile Wallets?

May 31, 2011 by
Filed under: Marketing Strategy 

Today consumers have a few options but with the new technologies like global positioning and data Internet downloads at the speed of sound…. new opportunities are arriving.

On a smartphone

users can input credit card data much as they do on the Web. They can also buy apps via Apple’s or Google’s app stores. Or in some instances, they can use “carrier billing” to make purchases that will later be added on to a mobile phone bill.

Ching, Ching, Ching

But a relatively new technology (a few months old) and some interesting new Websites present the capability to turn smartphones into easy-to-use payment machines. The addition of e-commerce to the mobile marketing equation may provide big benefits to marketers—even b2b marketers that often trade in bigger-ticket purchases.

Money in those chips

NFC chips embedded in mobile devices—and they will be coming to a mobile phone near you soon—make conducting a variety of e-commerce transactions, from making payments to mobile ticketing, as easy as waving a phone through the air.

Google is one player that has been trying to jump-start the NFC market. The search giant embedded radio chips in its Google Nexus S device. It also plans NFC support in future versions of its Android platform and is expected to begin NFC trials in New York and San Francisco soon.

Google CEO Eric Schmidt talked about the potential of the technology at a recent trade show, describing the power to “combine an ad and an offer, presumably at the point of sale.” In this formulation, there appears to be an opportunity for mobile devices to become conduits for point-of-purchase advertising messages.

While Google is big in the NFC technology, Apple has played in it. The company has hinted that NFC may find its way into its upcoming iPhone 5.

Mobile financial services vendor Tyfone delivered one of the industry’s first NFC banking solutions. The company aims to sell the product to banks and other financial services companies as a turnkey mobile payments solution. And in France, a startup called Think & Go is experimenting with NFC-enabled shopping applications.

While b2b applications have yet to emerge, business users are already heavily dependent on their smartphones. It is not difficult to imagine b2b marketers using NFC to enable instant payments on trade show floors or for “bumping” information between users in meetings.

There’s a lot at stake with mobile payments. Juniper Research estimates the mobile payment market will reach about $630 billion worldwide by 2014. Wilcox predicts 20% of mobile phones will be NFC-enabled in the next three years.

The next question turns to the other side of the transaction equation. Will merchants and businesses—perhaps enabled by payment players like Verifone or Mastercard—have platforms capable of accepting NFC payments in that same time frame?

*Quotes from Business to Business Magazine Rich Karpinski
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