Future of Mobile Payments

Mobile is invading everything. I read the following tweet from a person I follow on Twitter that got me thinking.

Jonathan Stark: Walked into Apple store this weekend, stuck a $70 Olloclip lens in my bag, paid on my phone, and walked out

Think about that for a minute. He walked into a store, put an item in his, bag paid for it on his phone and then left. The first thing that comes to mind is how he wasn’t stopped for shoplifting. I mean, can’t anyone have their phone out pretending to pay for something? Perhaps it’s my sensitivity to having worked in various retail jobs over the years. But then the second thing that hit me is that the store, in this particular case, is nothing more than a huge vending machine.

Jonathan later shared a link to this blog post about Square, the credit card reader that can process payments on smartphones. The company, started by one of the Twitter co-founders, is now saying they will process $5 Billion in payments this year. Square charge 2.75% to process the payments. If my math is correct that equates to $137 million in revenue. The ability to use a service like Square has been a great opportunity for small businesses that normally have to pay much higher processing fees.

Mobile payments are not limited to card readers though. Perhaps you’ve seen the app from Starbucks that lets you use your phone as a method of payment. The app is pretty simple, it puts an image of a barcode on your phone that is tied to your account. It’s fantastic! You might think I’m over-hyping things a bit, but it’s easier and faster than swiping a credit card. But I’ve been wondering just how much Starbucks is actually processing. According to this post the answer is $42 million in the last 15 months. A rather old stat I saw said that the average spend was over $6 per visit. That’s roughly 7 million transactions. Let that steep for a few minutes.

Since I work for a global hospitality company I’m thinking about the how mobile payments will work at a hotel during a stay. While it’s not my area of responsibility I find it interesting to contemplate how this might work at the property. What do you think? How would you use a mobile device to pay for things while at a hotel? Will hotels create a system like Starbucks or use a system like Square? Or both?

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