NEW ORLEANS, LA - At the cell phone industry trade show last week in New Orleans, phone companies, banks and credit card issuers predicted cell phones would be the primary means for payment in the near future, the Courier-Journal reports.
However, while all predict a dash to replace cash, there is little agreement about what the future will look like.
One system with a major presence was the Square system, the fast-growing company whose square toggle plugs into an iPhone to read credit cards. The system is gaining fast acceptance among retailers, with more than 2,000 merchants using Square in Louisville, Kentucky, according to Lindsay Wiese, spokesperson for Square.
With the hope of grabbing a share of toggle-happy merchants, VeriFone Systems Inc. announced its "Sail," a thumb-sized card reader that plugs into a smartphone, similar to the Square system. VeriFone is sending the card readers free to anyone who registers, charging a flat 2.7% of the amount of any transaction.
In the meantime, credit card companies and phone makers are focusing their efforts on the "digital wallet," a virtual storage space for credit card numbers, receipts, and coupons.
Google launched its Wallet last year, and it is available on a handful of phones that can be tapped against payment terminals to complete a payment.
And with the intent of speeding up consumer adoption of the digital wallet, MasterCard announced last week a service that allows any company to set up its own wallet.
"The idea behind this is: How do we get more wallets and more innovation?" said Ed Olebe, MasterCard's senior vice president of e-commerce development. The wallet is expected to go live this fall.
Meanwhile, Visa is pushing tap-to-pay phones with a wallet application designed to work on smartphones with built-in Near Field Communications. However, to date, the few smartphones in U.S. stores that feature NFC chips work only with Google€™s Wallet.
While Sprint Nextel is working with Google and its Wallet, the rest of the major wireless carriers have formed the ISIS consortium to create their own wallet.
For more on mobile payments, see the May issue of NACS Magazine.