New technology and software coming out will make using your smartphone rather than credit card or cash the common thing to use for purchasing both small and large goods. From companies like PayPal and the Commonwealth Bank's Commbank Caching iPhone app, the days of digging through our pockets for change may soon be gone.
Australians ranked second globally for smartphone usage last year, with 37% of Australians using smartphones in mid 2011 – a number that will only have grown. The international rise of the smartphone has been well documented, and the use of smartphones for online banking and shopping is notable. Throughout 2010, Paypal reported that mobile transactions on its website increased by 25% ever month.
Now, PayPal has released a new mobile payment device that allows small businesses to process payments. The device, called "PayPal Here", is a small gadget that plugs into a smartphone's headphone jack and allows its user to swipe credit cards and process the payment through an app.
PayPal spokesperson Brad Paterson said: "This is just an extension of what we've been doing. We're taking the same functionality of PayPal and then allowing everyone to turn their phone into a card reader."
He continued to point out that it wouldn't just be for retailers or merchants, and might come in useful for tradespeople: "If you're selling goods or services, you can use this. You're out on the go or in a fixed location and need to accept payments, then you can use this... The vast majority of businesses in Australia are small businesses, and many are micro businesses. This fits in really well with what they're trying to do."
It's directly competing with an American app called Square, which does roughly the same thing, and has proved its worth in the way it allows small and micro businesses to avoid complicated and extensive cash transfer technology. However, unlike Square, PayPal Here is available from today in Australia. It is free for the next six months.
So – well and good for retailers and business owners! What about the rest of us?
Smartphones as modes of payment aren't just going to be on the receiving end for long. The promise of mobile payment in shops using near-field communication (NFC) features has been around for a while, and it looks like it might finally be becoming a reality.
The Commonwealth Bank's Commbank Kaching iPhone app lets users make online payments to each other via email, Facebook, or mobile SMS. Once NFC features are added via a $54.95 iCarte case, users can swipe their iPhone and make purchases at shops using the same point-of-sale equipment that supports the Mastercard PayPass service. An android version is forthcoming, opening up the field even more.
Though more than 110,000 customers have already downloaded the app and are spending away to their heart's content, there are obviously still obstacles in the way of the mobile shopping experience. The need to pay for NFC features is a setback, along with the ever present question of whether or not a shop will have the capability to handle the payments you want to make.
Ultimately, though, slow as it may seem to be moving, the gradual evolution of mobile shopping techniques through PayPal and the Commbank Kaching app is a good sign. It shows that companies are acknowledging the fact that customers are ready to use their smartphone for physical as well as online shopping, listening to research such as the prediction by Juniper Research that by 2015, 2.5 billion mobile shoppers will be buying more than $170 billion worth of physical products.
Online shopping has begun to replace more traditional physical shopping for some people, such as with the new online Woolworths store. And it's likely that we'll soon see NFC-enabled smartphones – possibly on the long-awaited iPhone 5, whenever that happens to arrive!
In the meantime, new software and app updates will continue to make online and physical shopping easier. We'll keep you updated!
If you're ready to start shopping online, have a look at the plans available for some of Australia's favourite smartphones: the Apple iPhone 4S 64GB, the Apple iPhone 3GS 8GB, or, to try something different, the brand new Nokia Lumia 800.
To talk about new plans for your current phone, or if you're wondering how to sign up for a plan that will include a new phone, give us a call on 1300 850 518.