Phone applications alternative to credit card payments
Smartphones are a new means of payment for online and in-store purchases.
Google has developed an option that is currently being used by consumers and businesses in Australia and internationally.
The Google Wallet application, currently available on all Android smartphones, supports certain credit and debit cards. Participating financial institutions include American Express, VISA, MasterCard and Discover. The participant’s card details are stored on highly secure Google servers that can be used from the phone or computer for in-store and online shopping. The efficiency of the Google system is marketed as making “your phone your wallet” requiring merely to tap the back of the phone to a Near Field Communication (NFC) point of sale terminal or checkout. The transaction is wireless and is said to be secure, being accepted at an increasing number of businesses.
Meanwhile, the rival platform Merchant Customer Exchange (MCX) has announced development is currently underway and will be open for use with virtually any smartphone. At present the Google Wallet app is only supported by Android smartphones which renders all other smartphone users such as Apple incompatible. MCX will most likely open the cashless wallet market to both iPhone and Android users, becoming a major competitor for Google Wallet.
Businesses including 7-Eleven, Shell, Walmart, Lowes, Sunoco, Target, Sears, HMS Host, Michaels, Alon, HyVee, CVS Pharmacy, Publix and Darden have joined together as participating merchants in the creation of MCX.
“Development of the mobile application is underway, with an initial focus on a flexible solution that will offer merchants a customizable platform with the features and functionality needed to best meet consumers’ needs,” an MCX spokesperson said.
At present few shoppers use their phones as mobile-payment devices compared to those using traditional forms such as credit and debit-cards. Yet recent investment from major businesses will drive these technologies as the new mobile payment solution for businesses and consumers.
The idea may sound attractive. Using the smartphone to purchase goods may be convenient but has numerous possible ramifications in a range of scenarios such as phone theft, loss or when the battery goes dead at the check-out. Google Wallet claims to have an efficient security scheme in place protected by a personalised PIN and the ability to remotely disable a lost wallet. Time will tell as customer experiences of time will determine the future of these systems.