Mobile Payment Parade

It’s been over a year since Google Wallet came onto the market. Since then, there has been some traction with some vendors supporting it. While device support hasn’t been as broad, Apple’s inclusion of Passbook into the forthcoming iOS 6 will undoubtedly make mobile payment more mainstream. Microsoft has also gotten into the game with its own version of a mobile wallet.

This week saw a slew of mobile payment developments, but not from the usual tech company suspects. The New York Times reported that Walmart, Target7-Eleven and others formed a network to standardize mobile payments called Merchant Customer Exchange (MCX). The cross-platform app is designed to work across most smartphone platforms and can handle all major credit cards. Clearly, these retailers do not want to cede payment control to other vendors and are doing whatever they can to build a version of their own.Starbucks, already a leader in mobile payments handling over 60M transactions a year with their mobile scanning app, recently announced a huge partnership with Square, which removes even more friction from payment. Now, customers can simply pay using their name. Such a great idea as it not only saves transaction time by processing it ahead of time, it also brings the barista closer to the customer. Moreover, the new partnership brought a $25M investment into Square and a board seat for Howard Schultz, which will undoubtedly bring some cool innovation for Starbucks stores. Speaking of coffee, Dunkin Donuts also countered with a mobile payment app of their own, playing catch up to Starbucks’ previous generation of payment technology.

So we now have many options for mobile payment, many using some sort of scanning technology. What will really change the game is when we get the triumvirate of device/vendor/consumer adoption of NFC which will reduce even more friction in retail. The first to implement this well will have a significant competitive advantage as we move towards a cashless (and soon cardless) society. I’m looking forward to it.

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