In the past year, mobile payment systems have picked up steam and are now becoming mainstream. Could our wallets be replaced one day soon by our smartphones?
Back in 2002, MasterCard debuted its PayPass terminals, introducing instant payment processing to America. The system allowed MasterCard users to simple tap their credit card to the reader to make a payment. Today, more than 144,000 locations in the U.S. and over 311,000 locations worldwide use the PayPass system, according to MasterCard.
Then in November of 2010, AT&T, T-Mobile, and Verizon took this tap-and-pay system one step further, by aligning to create Isis, a mobile payment platform that utilizes near-field communication (NFC) technology to allow smartphone users to make payments with their phones rather than their credit cards.
One of the "Big Four" American phone carriers didn't join the party though: Sprint. As we found out in May of this year, it was holding out for Google's new NFC-based mobile payments ecosystem, Google Wallet. Launching with Sprint, MasterCard, and Citi later this summer, some analysts think this system will have what it takes for virtual wallets to finally succeed in the U.S.
The mobile payments idea is spreading far and fast. MasterCard, American Express, and Visa all offer virtual wallets. Twitter founder Jack Dorsey's mobile card reader, Square, is picking up speed. And eBay made a deal this week to purchase Zong, a company that specializes in allowing customers to pay for services through their wireless phone bill, for about $240 million in cash.
While Google succeeded in introducing a mobile payment service, via its Android app powered-Google Wallet, before its rival Apple (which is rumored to be working on an NFC payment system of its own), a June study found that iPhone owners are more excited about mobile wallets than Android users. Interestingly, the study also found that users trust their phone companies more than their credit card companies.
G+, a professional community service, created an infographic (below) illustrating how mobile payments are becoming the new credit card. It predicts the growth of the mobile payment market over the next four years and compares the current mobile payment contenders. Plus, it also displays a small graphic explaining how NFC technology works.
Editor's Note: I've inserted the updated version of the infographic created by G+. The change reflects that American Express Serve also supports Visa, MasterCard, and Discover.
[Source: G+]