What You Need to Know About Mobile Payment Devices

SoTech Leaders Q&A on Mobile Payment Devices with Jason Swenk of Payscape Advisors


SoTech: All the tech magazines have been talking about NFC coming for a few years. For those that don’t know what it is, for sale what does NFC mean and when will we really see it adopted in the market?

Jason:  NFC stands for near field communication which is a set of standards for devices that establish a radio communication with each other by bringing them in close proximity which is usually a few centimeters.  Used cases are office building cards that you tap to a terminal to open the door as well as Google Wallet which allows the consumer to store their credit card information on their smartphone and then tap their phone to a terminal to transfer funds.

NFC is huge in Japan because their subway system started using NFC. For those of you that have not been to Japan, shop you need to take the subway everywhere which caused everyone to start using it. One other reason worked in Japan, the merchants didn’t have to buy the terminal reader.

In order for this to catch on in the US, the big stores and infrastructure needs to adopt it first to get the rest of the merchants to follow.

SoTech:  How many people are really using any of the mobile payment options today? I ask because if you listen to Mashable and others, half the world is scanning QR codes every day and I’ve maybe met 2 consumers over the past year that have…and “the marketers that setup the campaigns don’t count”.

Jason:  I have the same view point that the only person using QR codes for mobile payments are the ones that setup the campaign.

SoTech:  At Payscape, I know you guys work with a bunch of community banks to provide software for small businesses. When will those same small businesses really start to adopt mobile payment in some form and what will that look like for them.

Jason:  If you think of the graphic that shows the law of innovation of diffusion, the majority of small businesses fall into the late majority. Usually the late majority are skeptical and traditional and the only way to get them to change is to get the innovators and the early majority to adopt. Meaning, you get the big companies to adapt like Target, Wallmart, Best Buy, the small businesses will follow because the customers will be wanting it.

SoTech:  How do mobile payments benefit consumers versus using credit cards?

Jason:  Mobile payments are just way to make it easier for the consumer to make a payment. I found that the more options you provide to the consumer and the easier you make it the better the experience.

SoTech:  What are the different technology types (or categories) that are fighting for the mobile payments tech of choice (e.g. NFC, etc.)?

Jason:  Bitcoin technology is a disrupted technology that is trying to catch on and replace the tradition form of payments as we know it. Bitcoin is a digital currency, protocol and software that enables instant peer to peer transactions that are worldwide.

SoTech:  Mobile payment security continues to remain a high concern for consumers. Many remain quite skeptical of smartphone-generated payment solutions. How do you really change that opinion? Even if the industry does change it in large cities, how about the rest of the US?

Jason:  The same thing was said when people were buying products over the Internet. There is far less security giving your credit card to your waiter at a restaurant.

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