Topic: Information Management

Resource: Sutter, John D. “Wallet of the future? Your mobile phone.” CNN.com: http://www.cnn.com/technology.  August 13, 2009.

Despite the downturn in the economy and the farce that is passing for a healthcare debate, technical upgrades continue to accelerate. Innovation and new ways to use information, store it and to solve problems is growing exponentially. One area that is being explored is the area of payment and invoice settlement.  Alternative payment forms such as PayPal have helped to expand commerce over the Internet. Debit cards and credit card payments are used extensively instead of cash.  In the past, people have looked at alternatives such as Speedpass to use as alternative payment systems for fast food and other services. In Europe and Asia alternative payment is offered through the use of cell phones. The question is whether the use of cellular technology for payment will make a meaningful inroad domestically? In the referenced article the commentator indicates that the law of large numbers strongly suggests that cell payments systems will eventually catch on here.  “By 2012…190 million people will make mobile payments…Only 3 percent of people in North America are expected to conduct mobile payments by 2012.” Some of the limitations impacting more rapid adoption include security concerns with identity theft and the use of near-field communication (similar to scanners) that is used in some payment technologies.  People want the added convenience and the freedom from carrying credit cards. Unique bar-coding may also support the purchase of goods through cell phones by making transactions easier and more secure.  Still the article indicates that less than 10 percent of consumers are asking for payment functionality.  Still in places like Japan and even Kenya significant commerce is transacted over the phone.  SMS messaging started in the U.S. at a low level and has accelerated dramatically in part based on pricing, eased message exchange between carriers, and real perceived benefits by consumers of communicating via SMS messaging.  Similar things would have to happen in order for phone payment systems to be radically adopted. The price point will have to be attractive, security thresholds have to be maintained, and consumers will have to perceive tangible benefits over other payment forms. I believe that this scenario will happen sooner than we think for basics like parking, public transit, and express checkout at stores. It just makes sense. As a result, this is another area that should be in your development queue for future application consideration. Let me know how you are planning for alternative payment mechanisms in your business.

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