2010: The Year Smartphones Become Mobile Credit Card Terminals

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Wether or not you’re ready for yet another venue to protect your identity and credit information, mobile payment will be making a big splash in 2010, brought in part by the burgeoning smartphone market and the third-party ecosystem that they have created, both in hardware and software. One ecosystem is credit card terminal–accompanying hardware and software to match the design, sleek UI and UX (user experience) of the phone, and the iPhone is taking charge with several vendors already committing to some hardware design for mobile payment processing, including Mophie–known for their sleek battery and case for the iPhone–VeriFone, Square, and Apple. Would you be as at ease at paying for your purchase through a merchant or retailer that uses a handheld payment system attached to a smartphone? Or are you more confident with a retailer with a bulky cash register?

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The mobile payment processing terminal popularity was in large part spurred by Apple, which had used a skinned Windows CE handheld made by Motorola’s Symbol Technologies at its retail stores. The devices, which Apple claimed were bulky and didn’t highlight the vision for their retail experience, were later displaced by iPod Touches with a shell that housed a battery and a credit card swiper along with a custom-made iPhone/iPod Touch app for Apple to use. Customers could sign for purchases with a stylus that was built for the device’s capacitive touchscreen or etch their signature onto the glass display with their fingertips.

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Apple Store Payment Reader

The devices looked sleeker and caught the eyes of consumers and small business owners, who had looked to Apple to commercialize their in-house solution for the wider market. Thus far, Apple hasn’t responded with an official statement on licensing its technology and custom hardware, but the company is probably watching this emerging accessory market coming alive closely.

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VeriFone Credit Card Reader

Since the Apple Store had switched to its own proprietary solution–thanks in part to the iPhone OS 3.0 and higher versions that allow developers to tap into the iPhone computing platform by delivering third-party peripherals–mobile payment is coming in 2010 in a variety of form factors with a number of different UIs, all promising security. While for the most part, mobile payment processing should be as safe and secure as paying at a non-mobile terminal–like a cash register–there exists some fears that some malicious developers could create apps and tweak codes where personal information could be stored locally or sent over the air to some other repository. Would retailers be savvy enough to use legitimate apps rather than fall prey to malicious hackers?

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Square System is unique in that it attaches to the headphone port rather than Dock Connector

As the technology emerges, evolves and gains traction in the market, the verdict is still out. It would be interesting to see if consumers would become more cautious or embrace the technology as a time saver in the long-run. The benefit, for retailers, is that it would help merchants establish a more open and communicative atmosphere with customers. Rather than be separated physically by a cold cash registers, Apple Store employees stand next to, or face-to-face, with customers and there is no barrier or divide between the company, its employees, or its customers.

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About The Author
Chuong Nguyen