Readers of the mine may already know that I’ve been paying extra special attention to the mobile payments
space recently, particularly the mobile wallet. The separation between mobile
devices and banking or payment services is growing smaller and smaller, and we
may be approaching a time when most people perform all of their monetary
functions directly through such devices … sometime referred to as smart devices. Banking deposits,
in-store payments, wire transfers, you name it—all have the potential to be
done entirely through smart devices. …
[Why, just yesterday I saved myself a trip to the bank by taking a picture of
the check I was depositing it and processing the deposit through my
Smartphone. Very Cool!]
On a personal note, I am glad to see the emergence of a
growing number of players in, and related payment options for, the mobile
wallet space. Clearly, it was about time
that someone emerged to give PayPal “a run for their money. At the time of writing this, I had recently
received an email from PayPal telling me that I had money in a PayPal account
that I had essentially abandoned 6 years ago; the email went on to tell me that
I needed to confirm my ownership of this account or the money would be turned
over to the State of California. At
first, I ignored the email.
You see, it
is an account that at one time PayPal had locked up and would not release the
funds on the account, due to some purported violation of their terms and
conditions. For 3 months back in 2007, I
fought with them back and forth to unlock the account. When I found myself getting nowhere with
them, I took a different strategy and proceeded to open up a different account
… and ultimately ran into the same problem as before, with the new account
getting locked as well. As a matter of
fact, between 2007 and 2010, I opened up 5 PayPal accounts, each with different
logins/emails for different projects and companies that I was involved with,
and, sadly, all of these accounts ended up getting frozen (approximately 6000
dollars). After all was said and done, I
was never able to determine why I was having these problems.
Well, yesterday, I thought, “You know what,
I am going to click on this link here and see what happens.” I simply clicked and clicked, answered some
?’s and what do you know, the account was unlocked, and the $1,700 that PayPal had
been “borrowing” from me for all this time -- or if you visit paypalsucks.com
“stole from me” -- was now available for me to do with it what I wished. My
reaction was, “What exactly just happened?” Now I need to figure out how to get
this long lost money out of the PayPal account, so that I can use it for
whatever I want. Maybe I will send it to
a charity or the IRS, J.
Anyhoo… I recently came across an article entitled, “Smartphone Wallet for the Unbanked.” The
article talked about how Boost Mobile, a pre-paid mobile service provider
operating under Sprint, is taking a unique approach to the mobile wallets
sector. Boost is offering one of the newest mobile wallets on the market to its
prepaid users, who are a group of people who either won’t or can’t pay for a
more expensive cellphone plan on a two-year contract. In fact, many of these
people may not even have a bank account.
The new service is
made possible through Boost’s partnership with the Pasadena-based payments
startup Wipit and allows customers to go into a Boost store with cash and add
money to an account. A phone app that is provided as part of the service then allows
them to send money to other countries or even pay some bills (including, of
course, their cellphone bill). In the
future, they will be able to take a photo of a check as a way to add more money
into this account. Users can even opt for a plastic card, at no additional fee,
that can be used as payment wherever Visa debit cards are accepted.
Although it seems as
if Boost’s unique mobile wallet has some great utility and performs many of the
same functions as a traditional bank, it may not exactly be “price competitive”
in all aspects. For example, it costs
$2-$5 to pay a bill and $3 to add money to the account. Clearly, it seems to me that Boost will need
to figure out a way to make its mobile wallet services affordable, or should I
say, feasible, for the typical, price-sensitive user. If it can do this, the rewards could be
huge. Keep in mind that there are over
100 million people in the U.S. who are on prepaid plans, or about one in three
cellphone owners. As to how many of these users are “unbanked” is not unclear,
but even a small percentage of this target market could be a very significant
number.
Some may ask whether
people will really want or “go for” this type of payment option. Will they be
willing to trust technology and make these purchases using their smart devices, or will they simply
prefer to do things the way they’ve been taught the world works? You know … you keep your money in the bank or
in your over-sized wallet, and you pay with checks or plastic. But I wonder whether that is really a good question. Look at what is already happening in your
local grocery stores, where prepaid credit card/debit card kiosks are seemingly
everywhere. Of course they are going to
go for it … once they see how easy it is to pay that way. And do you think it is difficult to get a
prepaid debit card attached to your mobile phone? Think again.
today, the one thing we are least likely to leave home without is not our wallet, it’s our mobile phone. Why is that? I think we all know the dirty little secret that we don’t dare go anywhere anymore without that lovely little device that keeps us connected with the world; it lets us send text messages, stay on Facebook full-time, make phone calls, and take/create high quality pictures and videos (often indistinguishable from those you can make with the expensive equipment you get at your technology hardware store) (actually, wait a minute, … I don’t think I saw a very big video camera selection at my local Best Buy last time I was there). And how could I forget what may be the biggest use for these mobile devices – its function as a veritable “play station” for the casual video games we can’t do without. Have you seen the color, speed and detail for some of these games lately. My cell phone now seems like a PS3, Wii, and the Xbox, all rolled into one. And now the thing will truly work like a credit card? You gotta be kidding me!
Without a doubt, the way to go for me is
obvious. I want an Android phone without
a contract (goodbye Verizon!), but with an integrated mobile wallet capability
(or should I say bank account) (goodbye B of A!). Walah!
It’s just a matter
of time guys, and I’m definitely sold, because this mobile payments thing is
here to stay! The convenience of this new payment option makes it a true “no
brainer.”
Indeed, many
industry players are already using innovative ways to target this mobile
consumer demographic, coming up with payment options such as allowing users to
get apps, books, movies, etc. without having to use a bank account. Some app
stores, like the Opera Mobile Store, allow users to purchase apps by simply adding
the associated costs to their phone bill or by using existing e-commerce
payment options, like the dreaded PayPal. Options like these are quite attractive
to consumers and retailers, alike.
Why? Because they cater to a new
kind of consumer … one who is always found with his or her Smartphone and who is
ridiculously accessible to the apps that run on those devices. This is not just a new revenue stream; it is a
new revenue river.
It is my sincere belief
that the exciting developments in the mobile wallet space will continue to open
new and exciting possibilities – both for consumers and for retailers. There
are many potentialities that have yet to be touched, and I’ve got a few ideas
of my own that I believe could make some waves. But you’ll have to stay tuned
for those, because I’m not one for spoiling a surprise. Suffice to say that while PayPal may not be
your “pal”, smart devices and the mobile wallets that they come with are indeed
good friends that you’ll want by your side when you are out there, movin and
shakin.
By the way, a little “Shout-Out” to my be-u-tiful 14 year old
daughter Alexandra. She is has been celebrating
her birthday this past week.
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