There is no doubt about it; the $5.5 trillion retail-transaction world is constantly changing. Technology now makes it unnecessary for customers to carry a wallet or businesses to maintain a bulky cash register at the checkout counter. Mobile payment technology is changing the way we do business. Small businesses are getting paid quickly and customers are making more reliable purchases. Research data indicates that mobile payment usage is expanding rapidly, increasing from 6.8 percent in 2009 to over 21 percent in 2012.
PC Times, in an article published May 2013, notes, “Mobile payment options have made a number of headlines recently – from Google Wallet to PayPal Here. Just yesterday, MasterCard also announced PayPass Wallet, which will let its cardholders and partners securely pay with phones or online with just one click. One of the first options to hit the market, however, was Square, the brainchild of Twitter co-founder Jack Dorsey and artist Jim McKelvey. Dorsey tweeted recently that Square is now processing $5 billion a year, up from $4 billion just a month ago, thanks to equipment that turns a smartphone or iPad into a card reader or cash register and lets users pay for goods without ever pulling out their wallet. One group making use of the technology is art fair and farmers' market vendors; Square today announced that its card reader will be the payment option of choice for more than a dozen fairs throughout the country this summer.”
Intuit, a leader in credit card processing states, “Mobile payments have moved from science fiction to reality, providing ease of payment, increased security, and efficient tracking using a device most of us carry around already. The result? The number of merchants accepting mobile payments is exploding, many of these new users trying out mobile commerce for the first time. There are several key players providing a variety of mobile payments technologies, so it will be interesting to see how the move to "mobile money" plays out. Whatever the outcome, both consumers and businesses stand to win when making and accepting mobile payments becomes more convenient.”
TechCrunch.com reports, “Payments is a huge market. According to Nilson Report and the Economist, in 2011 worldwide credit card transactions totaled $6 trillion and total debit- and credit-card transactions totaled $15 trillion. A 2 percent transaction fee applied to the credit total is $120 billion and $300 billion when applied to the combined credit and debit total.
TC reports, “Square has a simple offer and a streamlined process for the small offline merchants that need to take credit cards: Register online, verify a bank account, accept a free reader, install the app and accept credit cards at a fixed and predictable 2.75 percent rate. According to a recent research presentation by Managing Director Christopher Brendler of Stifel, “small offline merchants pay as much as 7 percent of each transaction to cover the cost of traditional payment services compared to Square’s 2.75 percent.” Brendler later explained. “Square’s promotional fixed pricing plan targets larger small merchants, reducing transaction costs to as little as 1.34 percent. Fixed and simple pricing is not an exclusive to Square with most disruptors offering it.” According to Square spokeswoman Faryl Ury, “In 2012 Square grew its customers from 1 million to more than 3 million and is on track to process more than $10 billion in annualized payments in 2013.”
At the forefront of Internet technology since its inception, Tej Kohli founded Grafix Software, a privately held company in 1990 to offer turnkey solutions to E-Commerce challenges. Headquartered in San Jose, Costa Rica, Grafix Software is known around the world for its diverse range of services including campaign management, search engine optimization, creative web design and more. Commenting on the rapidly developing technology of mobile money, Tej Kohli stated, “Developers of mobile telephony and payment applications are coming together to change the way that goods and services are paid for. We’ve already seen huge successes in Kenya, South Africa and India with regard to these types of schemes. New collaborative approaches are being launched in established markets in the US that effectively turn phones into credit cards. This is real disruptive technology, changing the way that people think about established processes, and at the same time bringing a whole new group of customers and prospects into the market. The new ideas and demands that come with them will continue that process of disruption and change. What’s more is that collaboration is going to be global. Countries that used to be referred to as emerging markets have now arrived. Other developing economies are taking their place. Old certainties about who leads the world in innovation are about to be shattered. No-one can be sure where the next solution will come from, but developers in South Korea and Brazil are as likely to avail themselves of the opportunities as those in Silicon Valley. “
By: Marlene Affeld