Thursday, 29 May 2014

Bitcoin 2 - Mobile Payments

My 'adventure' into Bitcoin has revealed a whole new world of virtual crypto currency. If you look around you also realise that mobile money itself is quite controversial.

From a technology perspective this should be pretty simple. You have a smartphone with an app and then, instead of taking a wallet, you just have an app that just transfers money when you want to buy something. Easy!

The first hurdle is that too often not every smartphone platform has an 'app'. Your bank app is usually there for an iPhone and current Android versions. My Windowsphone is often not covered. Secondly no one has a payment system that works everywhere. In the UK there is Barclays Pingit, Paym, Paypal mobile payments and more....  Even baker Greggs has a payment card that requires pre-loading money. It has absolutely no advantage over using cash.

In the US there is Google Wallet, Isis and more.

The big barriers are not technology it is rather the perceived potential market. Internet companies want the billions that will pass through mobile payments, tech companies want it, banks want it, so all of them have different standards. They all want paying too  - so a percentage paid by merchants for micropayments mean that micropayments are too expensive for retailers. The customer wants to give up needing to keep cash but cash remains the cheapest form of payment for the retailer.

NFC was supposed to herald micropayments and contactless payments. However since Apple haven't built in an NFC chip the market for adoption, particularly in the USA, has been reduced. I have followed the BBC technology correspondent on a few occasions using mobile payments and he has pretty much confirmed to me that you can't ditch your wallet.

The most successful mobile payment system in the world is in East Africa. it only uses codes and SMS text messaging. Nothing nearly as sophisticated as the modern smartphone.

So back to Bitcoin. It turns out that having a tenth of a Bitcoin I can't figure out how to spend is normal in the mobile payment space. Almost no-one really accepts mobile payments in a convenient consumer friendly way. Bitcoin isn't unique.

Link

BBC - Rory tries mobile payment

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