Mobile Payments & the Willingness to Pay
We may be about to see just how many people are seriously interested in making mobile payments.
After months of early testing and with significant ($10+ million) funding, Boston-based Loop is making its mobile wallet available to the masses today.
The first iteration is a FOB that can be synced with an iPhone with the LoopWallet app (Android is promised for next month).
The FOB, housed in a rubber case, is also a credit card reader. The idea is that a consumer connects the reader to their phone, much like Square, and then swipes their credit cards to store them.
Once stored, the FOB can be connected to the phone and used at any checkout that can read traditional credit cards and the merchant doesn’t have to modify or add any hardware, one of the more significant hurdles in various mobile payment strategies.
The Loop approach is essentially to turn existing mag stripe credit card readers into mobile payment readers, since the Loop chip transmits the credit card information to the reader in a quick burst.
To use the FOB without the phone, you place it close to the credit card reader at checkout and press the button on the side. The credit card reader then behaves just as if a credit card was swiped.
The device is also a mobile wallet, since in addition to credit cards, other cards like loyalty and gift cards also can be scanned and stored.
Loop says the device is secure (PCI compliant, for mobile payment aficionados), with payment card data being encrypted and it can be set to generate dynamic card data each time a payment is made.
I’ve been trying an early version of the device for several months in many locations across the country.
Besides it working like a credit card, I’ve been struck by the consistent reactions of the salespeople at the actual register, as I wrote about last year (Mobile Payments & Replicating the Credit Card Experience) in an early demonstration by one of the founders.
Most of the reactions I’ve witnessed mirrored those.
In a rubber-hits-the road moment in mobile payments, we may find out the consumer interest level in mobile wallets and payments.
While the app is free, consumers have to pay $39 to be able to pay, to get the FOB.
For $99 they can get a phone case in a month that does essentially what the FOB does.
We may be about to see what, and if, consumers will pay to pay via mobile.