If cash is still king, the dethronement has begun.
Tech companies from heavyweights like PayPal to scrappy young startups are tripping over themselves to help you pay bills, transfer funds and manage your investments using websites or mobile apps, with nary a soiled, crumpled dollar bill in sight.
"We are changing the way people think about money," says French-born entrepreneur Marc Rochman. His startup for paying online with gift cards, Openbucks, was one of dozens that presented their latest tech tools at the recent Future of Money & Technology Summit in San Francisco. "You can't squeeze a $20 bill through your smartphone screen, so we digitize it for you."
Mobile payment is a huge business that's about to get even bigger. By this time next year, according to a Juniper Research study, the combined market for all types of mobile payments could reach more than $600 billion worldwide, which would make it twice as large as it was a year ago. That's an awful lot of clicks-to-pay.
Here are three companies that shared their products at the summit:
Want to shop online but hate the idea of getting a credit card billï»? three weeks later? Don't even have a credit card in the first place? Or for privacy reasons, you don't want your purchase to show up on a statement? Openbucks may be your solution.
Rochman calls his 2-year-old Mountain View startupï»? "The Gift Card Payment Network."
"We're like the Visa of the
prepaid market," says Rochman, originally from the city of Lille in northern France. "Like Visa, we connect retailers, including Subway and CVS, with online merchants."
Here's how it works: You buy a prepaid card worth, say $20, when you're having lunch at Subway. When you're ready to pay later for something online at a participating site, including games, you click "Pay with Gift Card" and enter the code on the back. Because it's so simple, says Rochman, it's lightning fast. "You can complete your transaction in five seconds or less.
"It's great for teens who might not have credit cards, or people who want to stay confidential and not spread their credit card information all over the Internet, or people who are concerned about online safety."
Rochman says cards for the VC-funded Openbucks network are available at more than 50,000 stores in the U.S. and Canada and can be spent at thousands of online sites, all listed on the Openbucks website. Retailers are happy, he says, because more than half of the people who buy or reload their gift cards end up making an additional purchase. And he says merchants, who pay a small fee to Openbucks each time a card is redeemed, get an inflow of first-time customers.
Leo Rocco, the fast-talking pitchman behind Gopago, says his payment app is "re-imagining the way consumers and brick-and-mortar businesses use smartphones for mobile commerce." A 34-year-old New Yorker with a mechanical engineering degree, Rocco first got interested in mobile payments one day in 2007 when he went to grab beers at a Giants game just as Barry Bonds stepped up to home plate.
"I was waiting 10 minutes in the concession line and missed his home run," he says. There had to be some way to speed up the process and avoid waiting in a queue, he thought, by using a cellphone to order in advance. Two years later, he started Gopago, now a free download on iPhone, Android and BlackBerry devices. Recently, after an investment by JPMorgan Chase, Rocco says, things took off. "In the past two months, we've signed up 550 merchants in San Francisco alone."
It's easy: Fire up the app, choose a nearby participating merchant, peruse the menu, choose your selection (medium pizza with olives and sausage, a Coke, and a small salad, for example), click to add a gratuity of 15, 18 or 20 percent, then place your order using the credit card you'd previously entered into your profile. A message comes back from the pizzeria, telling you exactly when you can pick up the order.
The transaction moves like a hot knife through butter, with only five or six quick clicks from start to finish. Rocco says the app "gives you, the consumer, VIP service and you own the ordering and payment steps, not some guy running your credit card in the backroom. You're basically getting into a virtual queue, so you can order something at Starbucks as you're walking down the street, then walk right pass the line and your order's waiting for you."
Like other mobile-payment apps, Gopago reduces "friction" in the ordering process. "No more need to use the telephone to order ahead," Rocco says. "Gopago lets you use your smartphone to communicate and in the process, to optimize people's time and make the ordering process more efficient."
Clover is another free app trying to provide iPhone and Android users with that cashless, ï»?lickety-split commercial experience. Billing itself as "the one-tap payment app," Clover promises to "take the pain out of payment."
CEO Bryan Lamkin uses the word "frictionless" a lot, too. The former Adobe (ADBE) executive is all about speed, starting the moment you first get wind of Clover. "It's built to download fast," he says. "Within 60 seconds, you're up and running."
The cool thing about Clover is its ability to send and receive digitized payments to and from other people. It's all smooth as silk: You deposit, say, $25, from a credit card into your Clover account. On a clean and simple home screen, you tap "Pay $" and enter a friend's name, phone number or email address. Enter an amount and short explanation and click Pay. The recipient gets a text or email. They click the URL and if they've downloaded the Clover app, the payment pops into their account.
