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Zapp! Snap! Ping! How your new wallet is a smartphone
Afters years of forecasts and speculation, mobile payments are finally having their day. Apple Pay may have stolen the headlines when it was launched in Cupertino this September, but the death of the traditional wallet was being plotted long before then. For years banking companies and startups have been asking us us to ping, zapp and whizz money between our smartphones, but they were never quite persuasive enough. This is beginning to change.
This is partly to do with NFC. You might think that’s the abbreviation for a football team or some kind of ultimate fighting tournament (it’s actually Near-field Communication), but even if you’ve never heard of NFC the likelihood is that you’re using it – or you will do soon. It’s the technology inside contactless payments, travel cards and increasingly our smartphones, allowing us to tap-and-go to make quick and easy payments on the move.
The first NFC phone was actually the Nokia 6131 back in 2006, so why has it taken so long to catch on?
Wait, and Apple will show us the way
While mobile payments have been on technology radars for years, the conversation didn’t reach the mainstream until Apple Pay landed this fall. Apple has a habit of doing that, taking existing tech and making it popular (think iPod and iPad), and we have a habit of waiting for them like a loyal yet somewhat pathetic puppy dog. As the idea of NFC and contactless payments became normalised in banking cards and beyond, timing was of the essence, and Apple Pay hit the US on October 20.
While it’s still early days for the service, more than 1 million credit cards were registered with Apple Pay in the first three days of service. After a week, CEO Tim Cook claimed it was already bigger than all of its competitors combined. That isn’t stopping others from trying to muscle in, though, as Windows announced its collaboration with Softcard earlier this month and new alternatives continue to appear almost weekly. Meanwhile Google’s equivalent service – Google Wallet – has been around for more than three years and has struggled to gain serious traction.
Snapcash – now you see it, now you don’t
Mobile payments aren’t restricted to NFC transactions, and there’s also been a huge growth in P2P apps for sending cash between smartphones. The latest and arguably highest profile case is Snapcash, launched by ghostly messaging service Snapchat. Partnering with payment processor Square, Snapchat’s new feature allows users to send money to their contacts in chat as simply as typing the amount accompanied by a dollar symbol.
It’s not so different from services like Venmo, Zapp and PingIt, except that Snapchat already has a captive audience. While other P2P services have attempted to launch new apps and faced the challenge of encouraging users to sign-up to an app that nobody else is using, Snapchat can leverage it’s platform and offer users something extra. Snapchat was once criticised for being faddish – soon to vanish for good like its messages – but the app is said to have 100 million active users who are now far more likely to stick around for the long haul.
Where do we go from here?
With all of these mobile payments vying for our attention, the question seems to be less whether our smartphones will replace our wallets, but which app will reign supreme? A planned international rollout for Apple Pay puts the tech giant in poll position, but a combination is more likely, and late entrants are quite possible.
Take Weve, for instance, a UK M-commerce platform backed by EE, O2 and Vodafone – representing 80% of the country’s market. Aside from its potential reach, what makes Weve different – and especially appealing to retailers – is the use of geotargetted ads and vouchers. So, you could be walking past a store and receive a notification alerting you to a deal, and then claim your discount and pay all through your smartphone.
Disagreements between the three networks have seen the plans drastically scaled back since its initial announcement, but Weve offers a timely hint at where smartphone payments could go in the future. Whatever you use to pay for your shopping in the meantime, it’s increasingly unlikely to be a traditional wallet.