Mobile payments are expected to become much more popular for businesses and individuals as smartphone usage grows, but security will continue to be an issue for many consumers, one expert warns.
The comment comes as ANZ has just launched its new GoMoney iPhone app, which allows users to transfer funds to anyone with a mobile number. Although the app has been available for a few days, it was formally launched yesterday and reportedly has over 30,000 registered users.
Telsyte research director Foad Fadaghi says these micro and mobile payments are becoming much more popular, but it will be initially difficult to start convincing customers to use them.
“The challenge is the level of trust needed from the consumer or the business moving into this space. However, with a significant bank moving into the market, it could provide users with confidence, and I think that’s a good move,” he says.
The mobile payments scene has been one of the hottest trends in IT over the past year. A range of new start-ups and established companies are attempting to make commerce easier by swapping money on smartphones.
Just last month, payment company PayPal said it will be pushing into mobile technology in a significant way, with its app already receiving constant updates and tweaks. Its newest feature allows users to physically “bump” their phones together in order to send payments.
Laura Chambers, the Australian-born senior director of PayPal mobile, said on the company’s blog earlier this year “we expect to close out the year with over half a billion dollars of mobile payment volume”.
One of the biggest pioneers in this area has been Square, the American start-up founded by Twitter co-creator Jack Dorsey. Although it’s had some difficulties in getting hardware off the ground, the system allows sole traders and small businesses to accept credit card payments through iPhones on the spot.
In Australia, companies like Mint Wireless are heavily promoting the use of mobile payments, while early in 2009 a trial of contactless mobile phone payments conducted by NAB, Telstra and Visa found 95% of testers would use wireless payment technology.
That particular type of technology uses a software application included in a SIM card, which is then waved over a Visa PayWave reader, which are already available in many stores. A similar venture is being explored in New York by the Bank of America.
Now, ANZ says it wants to keep moving forward with mobile payments. The new GoMoney app, which is free, allows ANZ customers to handle their banking facilities – including the ability to send money to anyone with a mobile number.
When a non-ANZ customer receives a transaction request, all they have to do is sign up at a website and they can then receive their money. Group managing director of strategy Joyce Phillips said in a statement the new app is all about focussing on the new technology customers are using.
“ANZ GoMoney is a result of a renewed focus on innovation to help us continue delivering convenient and simple solutions to our customers.”
“People are continuing to change and evolve the way they interact with their bank and as a result we also have to think differently about our business and about the customer experience we deliver. ANZ GoMoney is one example of how we can use innovation to deliver a new a customer experience and get ahead of the game.”
Reports suggest the app already has over 30,000 registered users, although ANZ did not confirm this with SmartCompany before publication.
Fadaghi says the introduction of such a well-known brand into the mobile payments scene will help increase consumer confidence, and could help individuals and businesses introduce similar platforms of their own.
“I think consumers and businesses have a higher level of service with banks than third party services, and as such with ANZ having such a strong brand, and a large user base, it makes a lot of sense for them to be doing this, especially on the iPhone.”
ANZ also said in a statement that over 90% of its mobile banking transactions are performed on the iPhone, or other Apple device.
But Fadaghi says the concept of mobile technology isn’t just restricted to payments. He believes mobile commerce is becoming part of doing business, and while he maintains cash will always be a part of life, there is a significant shift to “alternative” payment methods.
“People are getting used to doing transactions, and even sales. If you go into an Apple store, they walk around with iPhones and iPod Touches and do everything on there. You don’t have to go to the counter, so consumer expectations are changing around that type of offer.”
“I think there are advantages in having a cash payments approach replaced with similar payment systems. While abandoning cash might be a long way off yet, we are seeing a significant shift to alternative approaches.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
