People across the country use their smartphones to check baseball scores, get directions, buy digital music, play online backgammon and more (including, at least once in a while, talk).
Few people in the United States, however, have paid for a cup of coffee, or a couch, with their phones.
But that is changing.
Technology companies and corporations are toiling to turn the ubiquitous devices into wallets, giving consumers the choice of wielding their phones — instead of their Visa cards, checkbooks or wads of cash — to make purchases.
“My guess is in three to five years you don’t carry cash, you only carry a phone,” said David Corsun, director of the University of Denver’s School of Hotel, Restaurant and Tourism Management. At DU this fall, students for the first time will be able to use their phones at the university’s coffee shop, Beans, a development he called “the first wave of that movement.”
Most experts don’t think the wallet is poised to vanish tomorrow. The country’s complex network of banks — nearly everyone has a different one — complicates pay-by-phone commerce, even though the technology for it exists. But in countries with a more streamlined banking infrastructure, like South Korea, the practice already thrives.
In the United States, one dramatic technology application isn’t likely to overhaul how we pay for goods. Instead, the transformation of the phone into a digital wallet will happen in dribs and drabs.
And it has started.
In Boulder, people who install on their phones an application from Mocapay, a Denver-based technology company, can pay for doughnuts, gas and everything else at one of the city’s ShortStop convenience stores.
At Starbucks locations in Silicon Valley and Seattle — and at Starbucks within Target stores across the nation — cappuccino- cravers just need a Starbucks app to walk away with that skinny cup of java.
“We are moving from an era when apps were cute and cuddly, something to kill time, to something that is useful, making your life easier,” said Patrick Mork, chief marketing officer at GetJar, a Silicon Valley app company. “That’s why my phone is so important to me. It’s not just for talking to people — that’s what I do the least with it.”
For now, most pay-by-phone schemes are digital variations on gift cards — that is, users transfer money into their mobile app, which keeps track of the account.
Some of those apps provide users with a numerical code that a sales clerk uses to tap into that account. Others produce a bar code the clerk can scan.
“People are doing banking, checking their bills, their account status, moving funds around,” said Seattle-based ABI Research analyst Neil Strother. “These are precursors towards a world where more mobile commerce is available.”
The technological ferment surrounding mobile payment makes sense, given the rise of the phone as a carry-everywhere device, said Kevin Grieve, chief executive officer of Denver’s Mocapay.
He said about 45 percent of adults now carry smartphones. Numbers like that appeal to corporate America. Making payment easier and shopping less of a hassle (ideally, consumers eventually will be able to buy without standing in line and dealing with clerks) is always a goal.
“You leave your house with your phone, your keys and your wallet. If you lose your phone, it takes you like 20 minutes to know. If you lose your wallet, it may take you six hours to figure it out,” he said.
For the near future, advances in mobile payment will likely remain in “closed-loop systems,” where individual stores adopt a technology, and consumers agree to use it.But in the future, it’s likely phones will become as accepted as credit cards and cash.
“What we are going through now in mobile is comparable to what we went through in the Internet,” said Joe Pezzillo, co-founder of the Boulder technology company Push IO. “It’s possible the transformation in mobile will be at least the same size, if not bigger.”
Douglas Brown: 303-954-1395 or djbrown@denverpost.com
Raising the IQ on smartphones
Square Inc.:
One of the developers of Twitter is behind Square, a company that has created a small device that attaches to smartphones. The device lets people swipe credit cards against the phone.
“The gamut of things that could be impacted (by Square) are phenomenal,” said Joe Pezzillo, co- founder of the Boulder technology company Push IO. “You could use credit cards at garage sales. You’re out with your friends and settling up the bill, and somebody doesn’t have cash. You say, ‘Fine, I’ll swipe your card. I can take $20 from your credit card.’ ”
Other developments:
• Some municipalities permit people to pay their parking tickets via mobile phone.
• A recent study showed that 19 percent of 18- to 29-year-olds have made charitable donations by text message.
• The largest owner of malls in the country, Simon Property Group, is installing devices that send coupons to people’s phones as they shop.
• PayPal Mobile lets people exchange money through their mobile phones by bumping phones together.
Douglas Brown, The Denver Post
