No cash machine? No problem, I've brought my own

The mobile payment market has moved in a new direction with the introduction of mobile credit card readers.

Two products currently out on the market - Paypal here and Square. Both products have a similar look and feel, using a small dongle-like tab that attached to smartphones via the headphone socket. Under the bonnet both have payment applications that transfer monies between the nominated accounts of a customer and merchant.

 



Despite the 'clunky-ness' of having external attachments these payment systems appear to have gained greater favour with consumers than the incumbent, Google Wallet, which has been available for 6 months. However since launching in the US it has struggled to gain acceptance with both merchants and consumers.

Although, Google's system is quite different and stores user information (credit card and banking details) both in the 'cloud' and in the handset to permit seamless transactions across online and physical (NFC) environments.

The new payment readers may just have the edge needed to create a niche market.

For a start they are based on the Apple platform (iphone/ipad) which is essentially the standard handset of choice for high-end consumers, the same consumers more likely to make card-based transactions. Plus on the security side there is a added degree of comfort offered by readers. Having to physically process the payment provides a further layer of protection against fraud and data theft. Whilst Google Wallet is a certainly a much slicker product, it's probably a bit too slick for the market's current level of trust in cloud-based systems. We have got over the hurdle of online purchasing but are not ready for complete engagement.

In the post and telecoms sectors we have been worried that the industries will get left behind by alternative providers unless they respond to the current challenges. The emergence of credible new technology in the finance sector should be a wake up call to the banks as well.