Turning the smart phone into a wallet may be the next big advance in e-commerce as both Apple and Amazon develop their own wallet apps for consumers.
The development of the technology has been slow and chaotic as numerous mobile payment methods compete for consumers’ attention, according to The New York Times. While mobile wallets may be years away, companies are making huge strides in developing their own versions as a future of payments via smart phones nears.
“Mobile payments, it’s been the next big thing for three or four rounds of ‘next big thing,'” James Wester, the director of global payments research at IDC Financial Insights, told the newspaper. “I would say we’re probably still three to maybe five years away from seeing mobile payments really common, with most of us using it.”
Multiple companies exploring mobile payments systems
Amazon’s wallet has already launched on the Amazon Appstore and Google Play, TechCrunch reported. The app is very simple right now, and doesn’t include point-of-sale payment options or the ability to store debit or credit cards digitally. As of right now the app simply offers users with a single place to store all of their gift cards. The user simply scans or types in the information on their gift card, which is then uploaded into the wallet. from their consumers can check the balance of their cards.
Amazon also has a website where customers can manage their credit cards, debit cards and checking accounts as well – all of which can be used to make purchases through Amazon.com.
Apple is also on the cusp of releasing a mobile wallet, and many believe that the technology giant may be able to offer the payment solution that has eluded tech companies thus far, according to Geeksided. Apple seems set to release its version of mobile payments system in the fall, and Visa, among other unnamed credit card companies, is already on board with the idea.
Payment systems have existed for some time but the strategy has yet to be perfected. Apple has the technology necessary to pay for products through a smart phone, but is delayed by the fact that something as sensitive as card information needs to remain as safe as possible.
Smaller companies are getting in on the mobile payments game as well. While PayPal has been a leader in electronic payments for sometime, the company has been looking into mobile wallet technology recently, according to the New York Times. The updated PayPal app allows users to store loyalty cards with their account. Partnerships with various companies such as Jamba Juice, Uber and Home Depot allow for simplicity at check out. For example, at Home Depot one simply has to enter a phone number and a PayPal pin. No wallet, no phone, just a series of numbers and the transaction is complete.
The technology behind the payments
Mobile payments systems work using N.F.C. chips, The New York Times reported. This stands for near field communication, and it allows for short distance contact between the phone the N.F.C. chip is stored in and the P.O.S. device. The technology simply requires the user top wave their phone in front of the device and enter a PIN. The simplicity of the technology makes its emergence possible in the next few years, as Wester suggested, as long as a company can develop an effective strategy.
The newspaper noted that many credit card companies are switching from the use of magnetic strips to N.F.C. chips in their cards, something that will make mobile payments systems easier to develop. Right now it isn’t possible to make payments with the iPhone, since the smart phone does not contain an N.F.C. chip. Instead additional equipment needs to be purchased.
However, according to Geeksided, the iPhone 6 is likely to have an N.F.C. chip in it, further evidence that the world is moving closer to the mobile wallet.Back To Blog