Leave the Wallet, Take the Phone: Mobile P2P Continues to EvolveNitin Sumangali |
The Insights team wrote recently about how Swedish banks are discovering that people are seeing less and less use for cash. A spate of new announcements from major consumer technology players are showing that it’s not just banks that are looking to move beyond cash.
Google announced at its I/O Developer Conference on May 15th that they were integrating Google Wallet more deeply into Gmail, and will allow consumers to send funds via a simple e-mail attachment to anyone with a Google Wallet account. Less than a week later on May 20th, Square announced an invite-only service called Square Cash which will let consumers send money to friends by emailing them and copying “email@example.com” with a dollar figure in the e-mail subject. Each service is experimenting with different cost methods: Square Cash charges $0.50 per transaction while Google’s service is free if sending funds via bank accounts or Google Wallet, and costs 2.9% if funding is through a linked debit or credit card.
In MasterCard’s Mobile Payments Readiness Index, one of the findings was how one type of mobile payment would breed familiarity and further acceptance of other types of mobile payments. In most countries the most popular form of mobile payments remains m-commerce, or making payments from a mobile app or web browser, likely because it closely approximated the already familiar experience of e-commerce. Looking at the efforts of Square and Google to move into person to person, or P2P, payments seen through the lens of mobile payments adoption can teach us something about these approaches.
In Google’s case the search engine is working to integrate P2P payments into already familiar contexts: Gmail is a very popular e-mail platform, and everyone who has Gmail is familiar with the mechanics of including an attachment in an e-mail. Including the payment details of a bank or card in a Google Wallet account is also familiar to anyone who has shopped online before. By presenting Google Wallet’s money sending function as a natural extension of the ways people already shop online and use Gmail, Google is deftly avoiding the barrier of teaching consumers a new process in order to use a new service.
Square is approaching P2P payments from their experience at the point of sale. By building on their reputation as providing service to smaller merchants’ countertop operations by allowing them to take cards, Square Cash is positioned as a simpler way to avoid the hassles of giving cash to people who aren’t nearby.
It’s key that as these offers reach the marketplace, the needs of consumers are kept front and center. Mobile devices and money, combined with the amount of data held on consumers’ smartphones, form a potent cocktail that all parties should sip carefully. As long as consumer needs and protection remain paramount, the mobile payments landscape could be due for another revolutionary moment.