So I am sure that most, if not all of you, have heard and likely used PayPal. Some of you may have started using the “bump pay” feature available in the newest version of the PayPal iPhone app. Companies are finding increasingly ways to use not only a digital method for receiving payment, but a mobile one as well. Let’s look at some of the trends.
I already mentioned PayPal, and while they were one of the first companies to join this revolution of being able to send money to your friends or pay for things on eBay, they are most certainly not the last. A company called Square (www.squareup.com) is bringing a whole new way for businesses and individuals to accept payments.
The company provides a free account and links to your bank account for daily direct deposits of monies received. The pricing for this service, which accepts credit cards, is a flat 2.75 percent per swipe. What makes the service even more interesting is that when you signup they send you a little card reader for your iPhone/iPad that plugs into your headphone jack.
The app that comes with the service also allows you to customize your available services if you use it to process business transactions. Some business owners use it as the credit card processor instead of one from a bank-based merchant device. Some banks charge different processing fees based on how many transactions or worse yet, charge the merchant more if the total price is less than $30. Square charges just the flat fee per swipe.
What else makes this service so cool? Well, you don’t have to be a company to take advantage of it. A few weeks back, some of the biggest neighborhoods in East Orlando were having their spring garage sales. If you wanted to allow your garage sale, Craigslist, or other classified customer to pay for your expensive item via credit card, you could have used Square rather than letting that sale go due to lack of cash. Several companies have come forward to embrace the swipe-to-pay as a mobile iPhone app tie in. I think that Square is well ahead of the curve on this one.
So what’s next? NFC (Near Field Communications) is a technology that allows a chip to transmit or receive information from a distance of about four inches. So far, this technology is already in a new Android phone and is rumored to be in a future iPhone. The technology has been used in Japan for years in things like vending machines. Vending machines there allow a credit card with the chip to just be waved in front of the machine to pay.
I think Apple, if they do this, will tie the chip to your iTunes account-registered card and allow users to wave the phone at a payment system and voila, paid. I can see driving thru McDonalds one day with nothing more than your phone. Touch the screen for what you want, wave your phone at the screen, get your “thanks pull around” prompt and drive around to enjoy your fries.
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