Mobile Payments (and Next-Gen Banking) Picking Up Momentum

There have been a number of mobile-payments related announcements and news items in the past few days that collectively reflect the growing momentum of the mobile phone as wallet and remote ATM. In brief here they are:

Telefonica, which owns O2 in the UK, is testing a NFC mobile payments system that the company wants to have deployed for the 2012 Olympics in London.

Visa (and MasterCard) are testing contactless payments -- "paywave" -- for mass transit in CA and NY. The video below demonstrates the technology in NY subways in the form of an iPhone app.  

Screen shot 2010-10-06 at 6.37.11 AM

The next iPhone will have RFID integrated in a way that will facilitate and enable mobile payments. According to a piece in Fast Company discussing an Apple patent filing: 

The patent shows how an RFID loop, powerful enough to act as both RFID tag or a tag-reader, can actually be built right into the complex layered circuitry of the iPhone (or iPod Touch) screen. 

There are lots of other related things (re marketing and loyalty) that can happen if RFID payment systems take hold.

Chase and now PayPal allow (via the iPhone) allow users to take pictures of checks for deposit into their accounts. This capability will spread to other mobile banking apps and will (eventually) become extremely popular. 

Boku has teamed up with Vodafone in the UK to enable small mobile transactions. Boku and direct competitor Zong are both very near-term acquisition candidates. 

Finally TabbedOut just raised a little over $2 million to expand its reach. The app enables secure smartphone-based payments in restaurants and bars. We previously wrote about it here. If the company gets to scale it will be acquired -- potentially by OpenTable. But there would be others interested too. 

Technology is not the issue in any of these initiatives; it's consumer confidence, security and usability. We're also on the cusp of a land grab as providers try to get distribution and consumer mindshare. That's going to be particularly difficult for independent companies such as TabbedOut, though not impossible. 

The current major (and potential) competitors vying for reach and mindshare -- and the would-be buyers of third party payment apps/platforms -- include credit cards, mobile carriers, PayPal (eBay), Amazon, Apple, Google. 

Mobile wallets and contactless payments have been discussed for years but these initiatives are now seeing traction. All of them are grounded in traditional credit card accounts. But the credit card itself will be less and less necessary as the mobile handset takes over.