Have You Got Change for a Phone?

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.

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