According to press reports, Amazon.com Inc. islooking at developing a mobile phone payment service. It may eveninclude an NFC marketing service that lets people scan an item in astore, but order it through Amazon.com. Along with Amazon, Google,Apple, and ISIS – made up of AT&T, T-Mobile, and Verizon – arealso developing mobile wallets.
In all of this, we can expect prepaid forms of payments andaccounts to lead the way. The first reason is that many of thesefunctions will be instituted on a closed-loop basis initially. Wehave already seen examples of this in two ways. One is whereconsumers display two dimensional bar codes on their mobile phonesand use them to pay for things. Starbucks and other merchants haveused this with some success. The second example is where programshave provided consumers with chips to glue to their phones.Students at Slippery Rock University, for example, have used suchchips to pay for things like laundry, vending machine purchases,and copies on campus.
Merchants seem to understand the value in adopting new paymentstechnologies. There is the gee whiz factor and the chance forfurther customer engagement and thus wallet share. They also canfund and test new technologies in their systems the same way thatthey test new products. Things can be rolled out on a limitedbasis, and then be tweaked and even cancelled if it is notworking.
From the consumer side, prepaid allows consumers to test newopportunities and options without risking a lot of money or puttingtheir bank accounts or credit cards on the line. They can work withbrands they trust and try out new things without a lot of worryover whether or not someone can hack their accounts and clean outtheir coffers. They also often reap rewards from merchants forusing the new technology and gain social status for being on thecutting edge.
Cell phone providers are a good testing group for this approachbecause they have used prepaid services effectively in the past.Customers are familiar with the concept of prepaid cards andaccounts and so don’t have a steep of a learning curve.
Once the concept has been proven through prepaid, then consumerswill feel comfortable attaching credit or bank accounts to thelatest gizmo.