Is 2015 the year paying with your smartphone goes mainstream?

Joining the mobile payment industry
Is 2015 the year paying with your smartphone goes mainstream?

When Apple CEO Tim Cook announced Apple Pay, a mobile payment service that allows users to pay for items at participating stores with a tap of their iPhones there was a shared sentiment among many analysts and industry experts that this was finally the e-wallet system that could take mobile payments mainstream.

Apple Pay is by no means the first, or even an early, entrant in the mobile payments category–Google Wallet, PayPal and Softcard, which are still in use, and Square Wallet, which is not, are just a few that precede it. But with the strength of Apple’s brand, coupled with consumers’ slow but growing comfort with using smartphones for financial transactions, Apple Pay is uniquely positioned to succeed.

Since the announcement of Apple Pay last September, more banks and credit unions, including Bank of America, Capital One and UW Credit Union, have announced they’ll support the service, and retailers such as Macy’s, Whole Foods Market and Panera Bread accept it. As both lists keep growing and mobile payments become more ubiquitous, they seem less like a techy novelty and more like just one more way our smartphones are replacing our daily items and routines.

The Challengers

While scores of retail giants have already agreed to accept Apple Pay, other heavy hitters are actually working to develop their own competing mobile payment systems. Brands like Gap, Walmart and Best Buy have coalesced to form the Merchant Customer Exchange, or MCX–a network based on cloud technology that uses its mobile payment service, called CurrentC, to connect directly to shoppers’ bank accounts instead of a credit or debit card. This system would give retailers more insight into customer spending habits across stores in its network, plus allow them to avoid paying high processing fees to credit card companies. While MCX was announced before Apple Pay last fall, the service is yet to launch as of press time, so its true reach is not yet known.

Another challenger to Apple Pay–or Google Wallet or CurrentC, for that matter–is a startup called LoopPay. What sets it apart is that it can already work with pretty much any swipe-style credit card reader in stores today, with no extra work required on the part of the retailer. Basically, LoopPay is a small metal coil that is embedded in a phone case or a key fob that connects magnetically to the card reader with just a tap, just like the magnetic strip on your plastic credit card does when you swipe it. Early reviews have been mixed, but most indicate that LoopPay has a lot of potential to take mobile payments mainstream.

A Q&A with Kevin Metcalfe

While large, national businesses have been the early adopters of mobile payments, local and independent stores are now starting to join in. Kevin Metcalfe, vice president and co-owner of Metcalfe’s Market, speaks about the local grocery store’s approach to this new technology.

Does Metcalfe’s Market currently accept any form of mobile payment?
We currently accept Moocho, which is a popular mobile payments app for college students. It’s used on nine college campuses across the country, including the University of Wisconsin.

Would Metcalfe’s consider accepting another form of mobile payment in the future? Yes. We will be accepting Apple Pay with our new terminals by March.

Why would you rather be an early adopter of mobile payments than waiting until adoption becomes more mainstream?
This gives us the advantage over our competitors still using traditional payment methods.

What are your biggest hesitations in accepting mobile payments? Security hazards because it is difficult for businesses to guard against all possible security risks.

What are the benefits?
Speed and convenience by giving our customers flexible payment options, which allow them to use their preferred payment method.

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