Sep 6, 2012
With Apple’s upcoming next iPhone release, rumours have started again that the phone will feature a Near Field Communications (NFC) chip. When Apple announced its iPhone 4S in October last year, it was somewhat of a surprise to industry watchers that it did not come with this chip. For months, analysts were speculating that Apple (similar to Google Wallet) would put a NFC chip in its phone so that it could use its massive base to shape the emerging mobile payments market.
Many companies are developing mobile payment systems because they believe that mobile devices can ultimately replace debit or credit cards. Even taking a tiny percentage of the transaction as a fee can equates to a lucrative business model because of the sheer volume in payment transactions. In the U.S. alone, the number of circulated debit and credit cards tops a staggering one billion and the number of transactions is a multiple of this.
Technology companies such as Google, Apple and Intel are looking at the mobile payment market from a technological perspective; Visa and MasterCard feel they need to protect their base; Internet payment providers like PayPal and Square have developed mobile apps; there are start-ups like LevelUp; and then there are the mobile operators that ideally see mobile payments being added to the phone bill of their customers; and finally, there are companies that did not want to wait until the rest have figured it out and developed own technology instead (Starbucks for iPhone).
Developments in mobile payments are happening at such a pace that it is unlikely that NFC will become the mainstream technology in the near future as mass adoption will take at least another two to three years. PayPal reported that out of their $118bn in processed transactions in 2011, about $4bn (3.4%) came from mobile devices. This number was $150m in 2009 and they expect it to grow to $7bn in 2012.
Therefore, in the short to medium term, we can expect mobile barcodes to actually drive this market. Barcodes are incredibly cheap to produce, most smartphones today can scan them and they can fire up payment applications such as PayPal or others. Interestingly, so far instead of pushing NFC, Apple is actually rolling out a barcode scanning service called EasyPay which enables U.S. iPhone customers to scan Apple Products in the Apple Store and pay directly from their iTunes account.
If mobile codes are going to drive the mobile payment market, it may provide opportunities for companies active in the printing space. At drupa 2012, Pitney Bowes showed a technology demo of “QR Pay”, a QR Code payment service.
In a nutshell, Pitney Bowes’ customers can use Pitney Bowes technology to print QR Codes on their bills and statements that corresponds with a mobile app that handles the payment processing. After a one-time only registration process, consumers can sign-in and process the payment with a few taps.
Pitney Bowes is actually in a great position to drive this market. As long as there is no dominant mobile payment system on the market, there is no reason why pushing a QR Code approach through the backdoor can’t work. Pitney Bowes have access to billers and service providers, they have a wide set of proven software solutions, they own a very secure IT architecture (used by their franking systems to print stamps) and most importantly, Pitney Bowes is rapidly diversifying their business away from heavy metal to value-added solutions and services. This QR Pay approach ties in well with Volly and other initiatives in the Customer Communication Management area.
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