Home  › Marketing › Strategies

Have You Got Change for a Phone?

  |  June 19, 2009   |  Comments

Mobile payments swim toward the mainstream.

My mobile phone has been set up to make PayPal transactions for more than three years now, not that I recall ever actually making one that way. But mobile payments are coming. In fact, they're accelerating from near-zero to the mainstream at warp speed as a host of technology providers jostle to gain foothold in the space.

It's time marketers, e-commerce providers, brick-and-mortar retailers, and even local service providers started paying some serious attention to how their customers will soon be paying for what they're selling.

Got the Number?

Gartner estimates by 2012 there will be close to 200 million mobile payment users, or more than 3 percent of all mobile users worldwide. Statistically speaking, that means mainstream.

The research firm also predicts mobile payment transactions will soar 429 percent, from an estimated 850 million this year to nearly 4.5 billion in 2012. Payment association Apacs believes noncash transactions will overtake cash payments in the U.K. by 2015.

While security will always be a big issue, consumers aren't as freaked out by mobile payments as you might think. Harris Interactive says close to half of the 93 percent of U.S. adults who own a cell phone think it's somewhat safe to pay using one. Over a quarter (26 percent) say it's fairly or very safe to do so.

And we're not just talking micropayments. Seventy-five percent of those willing to buy mobile are willing to buy airline tickets, hotel rooms, film or event tickets, music, mobile video or TV content, and games.

Will That Be Cash, Check, Credit, or Phone?

Mainstream mobile payments aren't an if, they're a when... and a how. PayPal takes you to a WAP (define) site. Other services are based on cell phone-native SMS (define). MasterCard has already introduced its MoneySend app for the iPhone and BlackBerry.

Intuit recently introduced GoPayment, a kind of cell phone-based cash register for small merchants, such as plumbers, who spend their days going from client to client. The service allows the serviceperson to enter the customer's credit card payment information directly into a cell phone (rather than a dedicated device, such as a swipe machine) to process payments.

Another solution, Billing Revolution, can process mobile credit card payments and can embed payment functionality into mobile ads. Of course, with a $0.50 transaction fee, plus another 3.5 percent processing fee, consumers will have to weigh the convenience factor fairly heavily.

Boku, which launched just this week, allows users to enter their mobile phone number rather than a credit or bank account number to buy virtual stuff at the micropayment level in gaming and social network environments. The bills are tacked on to customers' monthly phone statements. It's up against Zong, which claims it "converts 10 times better than credit card."

Finally, this fall Phoolah will offer consumers customized skins for their physical phones in which a contactless Visa debit card chip is embedded. If the concept flies, users will wave their phones to pay for things, such as drivers passing through electronic toll gates.

The takeaways from this dizzying acceleration of adoption and technology in the mobile payment marketplace? Get ready. It's coming. Near 100 percent mobile phone adoption and the soaring use of smartphones mean this stuff is really going to happen. And happen globally -- if you think things are moving quickly here, take a look at Asia.

Mobile payments, macro- and micro-, will soon be a part of marketing, merchandising, and commerce strategies. The challenge now is to find the models that work for your products, services, and customers, as well as to identify the vendors and solutions that can offer valid, sustainable, scalable, and -- above all -- safe and secure solutions, in both the short and long term.

And listen up, traditional marketers: This means you, too. It doesn't matter if you're thriving with no Web presence whatsoever. Mobile payments will be a game changer, not just for those companies on the cutting edge of technology, but also for the mom and pop selling soda pop on the corner.

Join us for a one-day Online Marketing Summit in a city near you from May 5, 2009, to July 1, 2009. Choose from one of 16 events designed to help interactive marketers do their jobs more effectively. All sessions are new this year and cover such topics as social media, e-mail marketing, search, and integrated marketing.

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!*
*Early Bird Rates expire April 17.

ABOUT THE AUTHOR

Rebecca Lieb

Rebecca was previously VP, U.S. operations of Econsultancy, an independent source of advice and insight on digital marketing and e-commerce. Earlier, she held executive marketing and communications positions at strategic e-services companies, including Siegel & Gale, and has worked in the same capacity for global entertainment and media companies, including Universal Television & Networks Group (formerly USA Networks International) and Bertelsmann's RTL Television. As a journalist, she's written on media for numerous publications, including "The New York Times" and "The Wall Street Journal." Rebecca spent five years as Variety's Berlin-based German/Eastern European bureau chief. Rebecca also taught at New York University's Center for Publishing, where she also served on the Electronic Publishing Advisory Group. Rebecca, author of "The Truth About Search Engine Optimization," was ClickZ's editor-in-chief for over seven years.

COMMENTSCommenting policy

comments powered by Disqus

Get the ClickZ Marketing newsletter delivered to you. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...