Pardon the long title, but sometimes you need one of those in order to make the point very clear: given the right tools and timing, institutions that act like silos will fall in the face of innovation and clear use. Its for this reason that the releasing of the PayPal 2.0 application for the iPhone/iPod Touch has the opportunity to totally change not only how we pay for items, but change the reasoning for why we pay for them the way we do.
First, let’s look at what elements that we have here:
- A mobile device that while holding a small part of the market in sheer numbers (about 7-13% globally) holds a significant part of the market in mindshare (the iPhone/iPod Touch platform has changed/enhanced mobile computing considerably).
- A simple technology which allows people to share information wirelessly in a manner that is as familiar as a hug or handshake (Bump)
- A financial transaction service which takes what we understand about email (have address will communicate) and extends it to sharing money and goods (PayPal).
With the release of the 2.0 version of PayPal’s iPhone application, these elements combine to becoming one incredibly disruptive technology to the banking and credit/debit card industries. Why?
Who needs a card and a platform to support it (read: charge for it) at every turn when with a simple tap or email address you can send money for goods.
Now the example:
You and friends are at a restaurant. The server comes up to you with an iPod Touch in hand to take your order. Their first question is whether it will be a split or shared bill, and the application adjusts itself accordingly. The person begins taking your order through a well-designed order-taking/menu application.
At the end of your time, the server asks if you would like a paper receipt to pay with a card/cash, or if you would like an electronic receipt and pay with PayPal. You and your friends have opted to split the check, each pulling out their iPhones and firing up the PayPal app. The server touches their device to each of your devices to transfer the receipt and request payment. You authenticate on your device the bill, add whatever tip, and then bump the devices again.
The server gets a notice on their device that the tip was sent immediately to their personal PayPal account and the balance was paid in full and deposited immediately into the restaurant’s account. You and your friends’ devices all beep with confirmation of the payment and both PayPal and your email accounts note the transactions.
Simple life ain’t it. This is now possible with Bump and PayPal. And the thing is, all it will take for this to take off is some major sit-down restaurant chain (or several diners on major interstates) to think about how easy it would be to not only take payments, but refine their entire customer ordering, processing, and payment processes around people having an iPhone/iPod Touch to take orders, and customers to with those devices to pay for them.
The only reason that this isn’t a bigger deal right now is because PayPal’s application isn’t on every mobile platform and Bump’s API is also limited to the iPhone/iPod Touch and Android platforms. But, let this open up to all the other platforms which are (much) larger (Symbian – 40+% of the market, RIM BlackBerry 20%, etc.) and… well, see where this is going?
Why would a company (restaurant, vending machine, etc.) go through the trouble of paying for a credit card infrastructure (card scanner, card fees, auditing software, etc.) when a combination of PayPal and Bump could do things point-to-point and much simpler? Why would a person resort to carrying cash or credit cards when they can get more transparency with financial purchases, and a much easier to follow paper-trail with this? And what street vendor wouldn’t jump at the opportunity to have a sign that says Visa/MasterCard/iPhone? This could literally change the tourism industry without much effort. In light of these and other possibilities, it makes too much sense to continue the way we – carrying and processing a card (bleh).
The only remaining issue is that of using other devices. I’ve asked for the Bump API to be integrated into the Symbian platform because this just makes sense. For the larger mobile platforms that are out there, this is just too easy.
The days of carrying cards are soon coming to an end (yea for no more wallets). And frankly, the only thing that can stop it from being so effective is you dropping your mobile in the toilet before the bill appears at your table. For which, then you might want to have someone else take your share of the check.