
Mobile payments: great for coffee, but not much else - mobeta
http://blog.thomvest.com/muchsizzlelittlesteak/
======
refulgentis
As a point of sale system developer (Ambur, an iOS app), the problem I'm
seeing with all these solutions is that the good ones are end-to-end (i.e. the
point of sale is manufactured by the payment service), and the bad ones rely
on point of sale integration.

The current division between point of sale and payment is that way for a
reason, namely it allows for each to focus on its core competency and run with
it. Square is a terrible point of sale for a business (it's _great_ for
personal use!), because they're not willing or able to built out a whole point
of sale system just to satisfy the needs of businesses. We've had an
incredible number of people since we launched extremely excited to switch from
Square over to our product for some very basic features, such as receipt
printing, much less things like managing what your employees can do in the
system, maintaining payroll and separate user accounts, and a thousand other
fundamental features that point of sale systems _need_ to do to be anything
besides a trendy, cheap, alternative.

The other payment services have little to no traction, and I'd like to think
that's because of just how well Square is designed. Unfortunately, until
Square either decides to build a full point of sale system and work on selling
it (unlikely), or open up to 3rd parties via some API (which I doubt will
happen, I've tried to get in touch multiple times to request this and haven't
received any meaningful response), I don't see it getting much traction beyond
personal use.

~~~
18pfsmt
I find your comment interesting and perhaps there's an implicit nod to
Aloha/Radiant Systems somewhere in there? As someone directly involved in the
market, I'm curious about your thoughts on where the opportunity (creating
more card accepting merchants vs. winning market share of current
participants) is right now wtf to the POS space. NCR just acquired Radiant
Systems, so that seemed like an indicator of disruption in the space.

~~~
refulgentis
I firmly believe the POS space is ripe for some really intense disruption.
Tablets (namely, iPads given that's what 90% of the market actually owns) cost
$500 apiece, are easily accessible, and let business owners demo point of sale
systems software right on their device, instead of just placing a call to
Micros/Aloha and making a call based on specs and feature checklists, when
those feature checklists include a lot of convoluted features they won't end
up using.

The problem is, even with the revolution of availability in the space, given
the poor purchasing experience with previous point of sale systems, most
business owners are A) not very excited to have to purchase a point of sale
and B) cannot possibly comprehend a point of sale that can run on commodity
hardware. All sorts of silly questions regarding reliability crop up.

But, I digress. Regarding payments, I think that point of sale developers
regard it as just a necessary evil that we have to roll our eyes and hold our
nose that we need to integrate these payment solutions. We end up writing
integration for each payment processor themselves, and each of their unique
XML/SOAP/what have you APIs instead of spending time on what we care about. I
would _love_ for a user-centric company like Square to come in and just offer
a usable API, but that's not really their gig and it's a complex situation.

Payments are in need of disruption, sure, but the first person to 'win' will
be the one who decides they're not going to go completely vertical anymore,
and has a nice, full, API with a good accounting/reporting web service to back
it up. At that point, I can trust they're going to get my customers the best
rates and widest acceptance possible, and I can easily write integration for
them and push my customers their way. I could care _less_ about this and that
detail about slightly lower rates, or gift card programs, or cutting me .005
percent of each transaction. I just want to give my customers the tools to run
their business correctly and accurately at the lowest possible development
cost to myself.

------
InclinedPlane
Yup. And the only thing that twitter and social networks are good for is
inconsequntial chatter and trading funny cat pictures. For that matter, the
same applies to blogs too. And smart phones, and tablets. Hell, maybe even
personal computers too. What can you do with them anyway, keep track of
recipes? This whole internet thing is probably just a fad since I can set up a
straw man caricature of it and knock it down easily without digging in to the
fundamentals with any degree of depth whatsoever.

Let me be serious a moment. Most new technologies start out limited. Look at
the automobile or the airplane or the personal computer. In the PC's case it
wasn't anything more than a toy, a hobby device for years. But it's the
fundamentals that matter. Whether or not extensive air travel is feasible is
not dependent on the quirks of the Wright flyer but rather on the
fundamentals, and on the characteristics of later generation vehicles like the
DC-3 or 747. The same goes for mobile payments. In 50 years, maybe sooner,
keys and wallets will be obsolete because mobile computing devices will be
used for payment, identity, and access.

------
georgeg
Mobile payments have been very successful in some countries like Kenya, where
the M-pesa system offered by a leading telecom provider is a leading mobile
money service, with over 8 million subscribers.
<http://en.wikipedia.org/wiki/M-Pesa>

------
illumen
In my country, I made a replacement for cab payments with mobile payments. We
had the cab payment people, and all the telcos on board. However, because of
the telcos selling virtual goods, they were used to 30%-50%-70% or more of the
transaction. Where as the cab people were getting 10% on the credit card
payments. The telcos gave up massive real world markets in order to keep their
tiny ring tone, and wall paper markets.

idiots

------
DavidBishop
Bluetooth, the Internet, Smartphones, Twitter, Facebook.

All were technologies that had to incubate quite some time, some for a decade
or more, before they were widely usable.

It concerns me when a tech writer looks at something and says "it will never
be useful within 6 months" when there is a ton of infrastructure involved.

It's not about the immediate payoff, it's about the future.

------
thinkcomp
Even though they didn't test FaceCash, here's our general response to the
"mobile payments are useless" argument:

[http://www.quora.com/Aaron-Greenspan/Paying-With-Your-
Phone-...](http://www.quora.com/Aaron-Greenspan/Paying-With-Your-Phone-Is-
Awesome-Because-Its-Not-1960-Anymore-In-Reply-To-Farhad-Manjoos-Paying-With-
Your)

------
Cherian_Abraham
Mobile payments using contactless technologies such as NFC goes beyond the
transaction at the Point-Of-Sale, in terms of providing a context to my
payment.

Even though it maybe that it would be easier to take your credit card and
swipe faster than taking out your phone, launching the app and then initiating
a mobile payment, the advantages are as follows:

\- The app can tell me if for a particular retail category, I have crossed any
predefined limits I have chosen: Say 300 dollars for Gas this month, or 200
dollars eating out.

\- The app can tell me, if I make this payment, whether that impacts any bills
or checks that are set to clear right away. This lets me avoid any late
payments, bounced checks etc.

\- If I had a debit card and a credit card with the bank, the app can choose
the right card for me to use. If I am near my credit limit, then the app can
default to my debit card. Or If my account is drawn out, then it could use my
credit card for the purchase thereby saving me Overdraft fees. Or if there
were specific coupons that would warrant the use of one over the other, then
the app could show benefits of using both and let me choose.

\- If the purchase amount is significant, and requires my credit limit to be
raised, then the card could do an STP and ask me to whether to increase my
credit limit.

\- If the purchase amount is significant, instead of using a credit card, the
bank could ask me whether i would like to open a small loan and approve me
rightaway by showing me the salient details (rate and term).

\- The app could show me how many rewards points I stand to gain from making
this purchase.

\- Even better, The app could possibly allow me to use my rewards points
towards the payment instead of paying cash or credit, provided that the bank
and the merchant has an agreement in place.

A lot of this might just be wishful dream for a while, but shedding the
plastic for a powerful payment alternative will finally deliver on many fronts
including the ones outlined above. If Banks continue to think and operate as
they did in the past, they stand to lose out against upstarts like Square,
Dwolla who are disrupting the payment industry. But I do agree that the
players in this space, including the NFC enabled terminals, Banks, Payment
Processors all need to work together in facilitating this and ensuring its a
seamless process. Yes, it will be a radical shift from how we pay for things
today, but there are tangible benefits to customers who are willing to change
their payment modalities.

This space is still being shaken out in terms of players and alliances. NFC is
still in its early stages, but I believe this is the way to go.

I am interested in hearing others opinions on my views as well.

~~~
dustingetz
i dont think any of that matters. nobody cares.

the app can ask me to confirm the transaction after the retailer initiates.
that's a game changer.

there is of course lots of lobbying to be done, but you need to already have a
business interest to get the laws fixed.

~~~
Cherian_Abraham
i disagree. Lobbying and all can come later. Any bank who decides to take
advantage of this new mobile channel both to engage their customers and are
able to get a customer to change his payment modalities, they can recapture
the mindshare they are losing today to the likes of Google and Square.
Doubtful if these financial institutions are as prescient to realize the
disruptive forces currently in play in the financial sector, but if they do
then they can stay relevant.

------
alister
It's really disappointing that none of the developers of these systems thought
to add anonymity as a feature.

It’s also sad that early adopters--who tend to be hackers/geeks--aren’t
demanding anonymous transactions. It could even be limited anonymity, like
being untraceable except by sender or recipient.

Yeah, we don’t need anonymity to buy coffee (not usually, but see note), but
we certainly won’t get it later on for transactions where it _is_ needed if it
doesn’t get built in from the beginning.

(note) Who were you meeting when you got that coffee? Oh never mind, I can see
in the centralized records who bought a coffee immediately before and
immediately after you, and also who you reimbursed when you bought two
coffees.

~~~
18pfsmt
I share your concern, and I believe there are people thinking like that
working on solutions. If I had the talent, it would have been built 3 years
ago.

------
hugh3
I'm still not sure what the value proposition is supposed to be for me, as a
consumer. In one pocket I have my credit and debit cards. In the other pocket
I have my mobile phone. Unlike my phone, my credit and debit cards never run
out of batteries. Why do I want to replace one with the other?

------
shaggyfrog
I'd say PayPal is "Better than checks" for the payer, but not for the payee.
Transaction costs are a multiple higher.

I notice Interac E-mail Transfer is not listed. I've used that before. A bit
of a pain to set up, but fees are lower than PayPal.

------
nextparadigms
I think a lot of the use cases will come _after_ we have this implemented
everywhere. It's often not obvious what a _new_ technology can be used for,
but it becomes clear later.

------
tech9
I would be interested to see responses from the companies tested.

