This weekend, I installed two new apps on my phone: LevelUp and Loop Wallet. These join Square Wallet, Square Cash, PayPal, Google Wallet, Venmo, and PopMoney. My payment apps folder is getting as crowded as the competition! That said, I am excited to try these two offerings over the coming weeks!
- LevelUp operates similar to Square and PayPal, in that merchants must be setup to accept your LevelUp payment. In LevelUp’s case, this means merchants use one of the company’s proprietary QR Code scanners, or mobile app, to read customers’ unique QR Codes. When a customer’s QR Code is scanned, their balance is settled with the merchant. Read more about LevelUp’s unique approach to settle payments!
- Loop leverages unique technology to emulate the magnetic strip found on credit cards. Instead of carrying and swiping your cards, you load them into the mobile app, take them out of your wallet, and then use the Loop dongle ($39) to share credit card data with the point-of-sale terminal when paying! Loop also sells an iPhone case ($99) that doubles as the dongle plus a phone charger! The new case ships Q2, 2014. I’m going with the dongle since it’s cheaper, knowing that I’m also missing out on benefits provided by the case.
Earlier this week, ReadWrite posted a related article on mobile payments companies. The article used four prominent companies to explain difficulties in the mobile payments space. Here is the most poignant excerpt:
If I can use my Square or LevelUp wallet at one merchant but not another, I am less likely to use it at all. Technological ubiquity across the entire landscape just does not exist for these would-be disruptors of how you pay, and the key holders—Visa, MasterCard, American Express, et al—are not too keen on opening the door too widely for companies that could cut into their bottom line.
This issue plagues every contender in the mobile payments space, but each, thankfully, continues to make headway in the race to replace our wallets.
- Loop aims to have smartphone makers integrate its technology into smartphones by 2015. Since it’s rumored to already work with 90% of merchants’ existing equipment, it should not run into the same obstacle as Google has with Wallet (lukewarm adoption partially due to equipment upgrade costs).
- LevelUp has a great idea that benefits customers and potentially merchants, if it can overcome it’s troubles achieving scale!
- Meanwhile, it’s rumored that Apple may enter the mobile payments arena with the release of iOS 8, and we know Google and others are competing just as fiercely for your loyalty.
If one of these contenders can find an angle that works for the masses, we may be very close to putting our credit cards away for good. That will be a good day!
Tagged with: app
, square cash
Posted in mobile
Recently, I was asked about American university students’ top banking needs. Here are my thoughts on how we can get the #YOLO generation setup with the most essential financial tools. Feel free to add your Comments, below!
First, the fun stuff… Mobile apps!
Square Cash and PayPal are a couple must-have mobile offerings for students, friends, and family, especially since 65% of American households are now smartphone users. These mobile apps are both easy to use and widely distributed, meaning students can save trips to the bank and ATM, reducing risks of lost cash and cutting transportation costs. Parents take note: these may provide great ways for you to send critical funds when your kid’s in a jam!
- Square Cash allows you to send cash to friends and family for free. It’s the easiest app to use for this purpose, and Square is one of the top innovators in the payments space. NYTimes recently covered Cash, here. Square’s other offering, Square Wallet, will compliment Cash. Where accepted, it allows you to pay merchants for food, goods and services.
- PayPal powers most of the internet and has built itself the biggest, arguably most trusted, name in the payments industry. The mobile app allows you to send money to friends and family for free. Since most people have a PayPal account, adding the app takes little effort. Where accepted, the app also allows you to pay merchants for food, goods and services.
- Another company to watch closely is Ribbon! <– My referrer URL. Ribbon is currently restricting signups, and I am not currently a user, but I’m excited to see how this company grows. Their angle: “No more excuses about not having the same app. Friends don’t need to sign up before they pay you with a debit or credit card. Simply share the URL for your Ribbon profile page with anyone…”
- See my additional suggestions for sending and receiving money!
And now the more traditional stuff… Banking needs!
To power mobile offerings and ensure students can realize their #YOLO dreams, there are still a few needs to be met by banks and credit unions. Here are the critical tools that students should consider as they transition to financial independence:
- FREE, no-strings-attached checking account (no balance, direct deposit, or other requirements). Today’s financial tools for sending and receiving money rely on the ability to debit or credit a checking account. This also gives student an account to start building their nest egg.
- Debit/ATM card (typically included with checking). Access to cash remains important for splitting bills, repaying friends, and dropping a few bucks in the bucket at fundraisers. Late night studying at the library and off campus may also require dollar bills for vending machines and smaller coffee and snack vendors.
- Low-limit credit card. Travel makes having a credit card essential. Students rent cars and pay for hotels, and nobody knows better than a poor student how painful a $300 hold on one’s checking account can be (when paying with a debit card). Low-limit credit cards also provide a safe means for students to begin building their creditworthiness – which may or may not be interesting – to serve the old-world credit score that governs much of American finance.
Armed with the right tools, our starving students will be more financially informed and enabled. No more couch diving for loose change when it comes to paying for books, repaying friends, or making a late night Jack in the Box run!
Tagged with: banking
Posted in banking
The past 10 days have proven that cash is still the preferred payment method in Bangkok and Singapore. Credit cards are also widely accepted in Singapore, whereas only more commercial merchants in Bangkok accept plastic. There have been no opportunities for mobile payments in either destination, even though Starbucks teased me with the mobile app scanners in-store! Sadly, it was not possible to use the app abroad.
So, for now, at home and in these parts of Southeast Asia, ca$h remains king!
Cash is King
Tagged with: asia
Posted in mobile
I recently blogged that ClearXchange, a payments venture between Wells Fargo, Bank of America, and Chase, is in a good position to succeed in the mobile payments space, and deserves more press. With the right marketing (e.g., billboards, mobile advertisements, commercials), I believe Wells, B of A, and Chase are in a great position to become leaders in the P2P payments space. Without the proper marketing, they will crumble to the likes of Square, PayPal, and Venmo.
On one of my recent trips into San Francisco, I saw a Wells Fargo SurePay billboard providing some of the marketing I was hoping for. Kudos WFB.
Wells Fargo SurePay Billboard, marketing for the ClearXchange payment network.
Tagged with: bank of america
, wells fargo
Posted in banking
This weekend, I embarked on a 3.5 day wallet-less adventure to see if I could survive on mobile (iPhone) payment apps in place of cash and credit. My experiment was insightful and enjoyable! That said, the past few days in San Jose, San Francisco, and Napa, CA have proven that there is still plenty of work to be done before mobile payments are widely accepted. In the meantime, be sure to carry your ATM or credit card, or cash safely in your pocket!
Wallet-less weekend complete! I survived.
Main issues I encountered during my wallet-less weekend:
- Few merchants accept mobile payments. PayPal and Square both have location-aware features to help you locate accepting vendors, but your favorite restaurants will likely not take payment from your smartphone. Consistent with Steven Bertoni‘s “wallet-less day” adventure, the eating options I saw consisted of pizza and independent fast food shops, and I would’ve had to drive out of my way to eat somewhere higher quality. Furthermore, almost no other merchant types in the area are accepting PayPal or Square payments.
Few merchants in my area accept PayPal. Many of the merchants listed are “test” accounts, not actual stores!
- Merchants lack incentive to adopt mobile payments. Mobile payments have not been around that long compared to cash and credit. Using new technology, possibly in addition to their legacy POS systems, confuses storeowners. One restauranteur I spoke to told me, “I might do it in the future, but not now because I’m too busy during rush hour. Credit card and cash work well for my process and 85% of customers love using their credit card.” Additionally, fees associated with mobile payments tend to be higher than those assessed by traditional merchant card vendors.
Existing payment methods meet storeowners’ needs.
- Credit cards have a unified processing system, whereas mobile payments operate in silos. One credit card terminal can read a multitude of different cards. In stark contrast, PayPal, Square, Google Wallet*, and other mobile payments providers may require merchants to run proprietary software, and potentially more than one suite, to allow for customers’ varying apps. This adds to the overhead and reduces adoption by merchants. *Google Wallet is also incorporated into some NFC POS terminals.
Some funny and aggravating excerpts from my weekend include:
- Day 0 (Emeryville IKEA): My first obstacle was trying to buy dinner at the IKEA Cafe. When I asked the cashier if she accepted the PayPal App, Square Wallet, or another mobile payment option, her response was, “I don’t think we’re sophisticated enough for that yet.” If only she knew she was foreshadowing my entire weekend!
- Day 1 (coffee shops): Twice on Day 1, I was able to buy my sanity using my phone. First, I started my day using the Starbucks app to pay for a croissant and coffee, and also leave my barista a $1 tip. Starbucks’ app is widely recognized as the most successful payments app in the market, and I use it frequently. Then, at the end of the day, I stopped into Philz Coffee to grab coffee for a late meeting. I was able to very easily pay using Square Wallet, and the next time I go I won’t even have to take my phone out of my pocket (because I toggled an option to auto-checkin via Square when I arrive). Brilliant! The only downside was Square doesn’t allow tipping, so my barista wasn’t as pampered.
The Starbucks App is regarded as the most successful mobile payments app.
- Day 2 (BUST): There was no escaping cash and credit. I even took the time to drive a bit further to have a tasty Greek lunch, in a restaurant identified by PayPal’s app. After I ordered and told the cashier I’d be paying with PayPal, he responded with, “We don’t have that. Only cash or credit.” A quick chat revealed even deeper confusion- the restaurant believes PayPal set them up without their permission. My gut tells me it’s reflective of the learning curve issue I mentioned earlier, not malice.
- Day 3 (San Francisco): I used the Pay by Phone app to pay for my parking meter South of Market. I use Pay by Phone and Park Mobile frequently without issue, to fill parking meters in San Francisco and Oakland. Tonight, I paid for my parking, went to a meeting, and came out to a $74 parking ticket! Clearly, there was a breakdown in SFMTA’s process, and I’ll be disputing the charge.
Fed meter using Pay by Phone at 4:29pm, ticketed by DPT at 4:38pm!
Stay tuned for another wallet-less weekend this summer! I will be taking a different tact: testing the system through use, versus trying to survive my normal routine with only mobile payments. I’ll be going out of my way to leverage mobile payments, to see how my efforts are received by merchants!
In closing, here’s a play-by-play of the past weekend:
- Croissant and coffee at Starbucks, plus a $1 tip for my barista, using the Starbucks App! Shake to Pay.
- Bouchon bakery only accepted cash or card, so pulled out my AMEX and indulged.
- ottega lunch paid by friend, in exchange for a future lunch date.
- Philz’ Philtered Soul and Mint Mojito coffees to go, paid for using Square Wallet! No tips allowed, my cheery barista will be forever poor.
- After parking in the SF Mission Garage, borrowed money to pay at exit. Even my AMEX couldn’t save me.
- Took AMEX out of wallet, grabbed a more reliable, boring card (Visa).
- Safeway trip in the morning before hiking Mission Peak. Paid with credit card.
- Lunchtime trip to local restaurant listed in PayPal app, paid with debit card after merchant said PayPal set him up without his permission, and PayPal wasn’t a payment option!
- Empress of China birthday dinner, paid friend back using PayPal App.
- ATM trip to pull out cash for remainder of evening.
- Breakfast. McDonald’s would have accepted Google Wallet but shunned my silly iPhone, McGriddle Breakfast be damned.
- Lunch at Subway, paid by card.
- Finished up my weekend with a business meeting at Epicenter Cafe in San Francisco. THANKFULLY, paying with PayPal worked perfectly. And to my surprise, my first coffee at Epicenter was on the house after a $5 perk!
Paying with PayPal worked, and I even got a $5 perk for using it, making for the best transaction of the weekend!
This afternoon, I’m feeling inspired by Forbes’ Steven Bertoni‘s “wallet-less day” adventure. As described in his post, Steven went one day without credit cards or cash his wallet, to see if he could survive on solely mobile payment apps.
In admiration of Steven’s experiment, and in awe of Kashmir Hill‘s similar experiment with Bitcoin, I’m going to 1-up Steven and go for the next 3.5-days without cash or credit cards with one exception: I’ll have a card to pay for gas. So, weekend be damned, Fri-Sat-Sun shall reveal how mobile-payments-ready our SF Bay Area really is. Starting..now!
Next week, I’m off to Asia, where cash will be king unless I’m trolling FoodPanda for munchies. It’ll be interesting to see how far mobile payments have come since my last visit in 2011! Full report to follow.. stay tuned!