For years now, companies have been working on systems that allow consumers to use their mobile phones as payments instead of their credit cards. It looks like we might all be trading in our plastic sooner than we think. This year, the systems will be put to the test and they will be going from the labs into the real world. Starbucks will be one of the first stores in the U.S. that will be testing this out. Stores throughout the U.S. will be equipped to scan your phone, instead of your preloaded Starbucks card, for your latte payment. There is a lot of money involved in this new technology.
Those transactions are small slivers of a global mobile payments market analysts estimate at $69 billion in 2009, the latest year for which data is available, according to research firm Generator Research. It is reported that by 2014, mobile payments are expected to reach $633 billion annually, with 490 million customers using their phones to move cash around. Can you imagine having the ability to download Bump, and beam cash to your friends account from your PayPal account? If this works, those are the kind of things we can expect to be able to do with our smartphones.
In November, the three big wireless carries, Verizon Wireless, AT&T, and T-Mobile teamed up to create Isis, which is a new mobile commerce network the carriers plan to have up and running within 18 months. They surprisingly decided to partner with Discover Financial Services on the project instead of Visa and MasterCard as their financial partner. In addition, Visa, Bank of America, JPMorgan Chase, and Wells Fargo have also been testing these technologies that would also allow our smartphones to take the place of our wallets. Just recently, Google CEO Eric Schmidt reportedly said the next version of Google’s Android would include tap-and-pay feature that could replace credit cards. Apple recently hired an NFC product-development veteran to lead its mobile commerce efforts.
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