Commentary
Mobile Payments Replacement for Small Change?
- by Chuck Martin , Staff Writer, February 28, 2013
I’m wondering if maybe mobile payments ultimately will be driven by big businesses but small things.
Earlier this week at the Mobile World Congress in Barcelona, a Coca-Cola executive suggested the company’s goal should be getting a Cole into “every hand with a mobile phone,” as reported by MarketingWeek.
The idea is that with about 6 billion phones in the world, that group is a better target than the roughly 2 billion people Coke would reach with traditional marketing activities.
“I am looking at how we can use mobile technology and content to get a transaction,” said Tom Daly, Coca-Cola group director of mobile and search, according to the report. “We are not just in the brand building business; we are in the direct response business.”
The idea is to use mobile payment technology to target consumers who don’t buy a Coke because they don’t have enough change in their pocket at the time.
Companies like Coca-Cola and PepsiCo have access to vending machines around the world, a logical mobile-transaction location. In those cases, mobile payments could be replacing payments made with cash rather than those made by credit card.
Though the idea of mobile payments at vending machines is hardly new, wide-scale deployment is still lacking.
While the banks, credit card companies and other financial transactions firms focus on augmenting credit card payments with mobile, maybe it will be the small-change transactions where the market is nurtured.
Mobile startups like Square get this, and are often used for smaller transactions, such as buying a smoothie from the local juicery.
Mobile payments at a mass scale are still a ways off, but the Coke-in-every-hand approach via mobile payments may have some legs.
What do you think: mobile payments taking more the place of credit cards or small change (or both or neither)?
Chuck Martin is Editor of the AI & IoT Daily at MediaPost and writes the daily Connected Thinking column. He is a NY Times Business bestselling author and his latest book is “Digital Transformation 3.0” (The New Business-to-Consumer Connections of The Internet of Things.) He is CEO of Net Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.
Ten years ago, Charlie Fote, the CEO of First Data took his cell out of his pocket at a company- wide meeting and said this is the future of payments. Knowing he is a visionary, I waited. Yesterday went into Starbucks, and there was the phone scanner. Today I'm doing a search for a Director of Mobile Payments, the time has come.
That sure was some foresight Sue, even pre-smartphone. And good luck with your search, should be interesting. Lots of moving parts in the space.
While the prospect of using mobile for payment has some very interesting and beneficial sides to it, such as no longer having to carry cash, and no fear of losing your wallet to a pick pocket, there are some terrific downsides as well. Every transaction can be potentially tracked with this technology. And do we really want the faceless, corrupt bureaucrats in charge to know our every move and every purchase right down to our last Snicker's bar?
Great Ambition from Coke. Mobile needs more of these visionary declarations from the big brands. I would however challenge the assertion that Square will be the driver here. Solutions requiring hardware have big limitations. Customers want speed and security. The new brand of mobile payment solutions are delivered to the customers own phone without Apps or plug in hardware. True self service. Have a look at an perfect example at www.yoozap.co.uk.
Great points about security and privacy, Paul. That likely will be one of the very large hold-back for many, both businesses and consumers. We'll ahve to see.
Right, Alan, not meaning to suggest Square would be the Coke solution in this case. You also may be right about ease-of-use and non only with less hardware involved, but one less transaction processor as well. Will be interesting to see the ultimate carrier and phone maker role here.
So now you don't have a wallet to pick pocket, they can pick pocket your phone - and how many people put their phone down making it real easy to find and track - and cop even more of your personal info in one fell swoop.
That is one consideration, Paula, though there are many looking to protect consumers from just that. In some countries, like China, people often use the four-digit passwords each time they use their phone since phone theft is so lucrative, with them not being subsidized by carriers. And then there could be spending limits, of course.