Smartphone to replace wallet? – Tampa Bay Times

Last week, Starbucks joined forces with Square, a technology startup that lets you pay for things with a smartphone. Coming from a company whose cafes seem to be on every corner, that’s a powerful endorsement. does that mean your phone will soon replace your wallet?

That’s hardly certain, because any company offering mobile payments faces a big challenge: convincing people that paying with a phone is safer and more convenient than cash or a credit card.

But the partnership will clearly give a lot more exposure to Square, a company in San Francisco with about 300 employees, and to the idea of mobile payments in general.

Square isn’t yet near getting the big numbers it needs to become a mainstream replacement for the wallet. to date, it has 75,000 merchants using its technology to accept payments. it refuses to disclose the number of consumers using its Pay with Square app.

“The biggest friction has been places to pay,” said Jack Dorsey, the founder of Square. He said that with so many different companies trying to get a piece of the market, paying with a phone has been a “fragmented” experience. But the Starbucks partnership should widen the use of Square specifically, he said.

Indeed, businesses of all kinds, including big firms like Google, Microsoft and Sprint and small startups like GoPago and Scvngr, are hoping to profit from mobile payments — if only they can figure out what kind of system appeals to consumers and merchants.

Google has developed a mobile wallet app that uses a technology called near-field communication, which allows a phone to communicate wirelessly with a nearby cash register. GoPago has an app that lets customers place an order before arriving in a store; it shows up on a tablet on the merchant’s counter. Square offers businesses software for the iPad that shows pictures of nearby customers who are using the Pay with Square app on their smartphone, so all they have to do is state their name to pay for an item.

Starbucks stores will begin accepting a less ambitious form of Square payments this fall, when customers will be able to show a Square bar code on their smartphone at the register. The companies expect 7,000 U.S. Starbucks stores to be hooked up to the new system before the holiday season.

Starbucks has already been accepting mobile payments through its own bar code app. with 1 million app transactions a week, Starbucks is the most successful example of mobile payments to date, according to Denee Carrington, an analyst at the research firm Forrester. she said the partnership should make Square the biggest player in mobile payments.

Not everyone is convinced that Square’s close relationship with a behemoth like Starbucks is such a good idea. Seth Priebatsch, chief executive of Scvngr, a startup that offers a mobile payment app called LevelUp, said the move could alienate other retailers.

Square has invited Howard D. Schultz, Starbucks’ chief executive, to its board. that would give the coffee company influence over how the payment system is developed, which could scare other big retailers away from it, Priebatsch said.

Smartphone to replace wallet? – Tampa Bay Times

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