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U.S. Bank, MasterCard Worldwide and Nokia have introduced a mobile payments pilot program in Spokane, Wash. Program participants received a new Nokia mobile phone equipped with MasterCard® PayPass(TM) payment functionality, which allows them to pay for purchases with a tap of their mobile phone, instead of sliding a card through a magnetic stripe reader, handing it over to the cashier, or fumbling for cash and coins.
The phones integrate technology that, when used at a PayPass-enabled terminal or reader, transmits payment details wirelessly, eliminating the need to hand over a card for a merchant to swipe through a reader. After the terminal is tapped with the phone, the customer receives payment confirmation and is on his or her way. With this new way to pay, there is typically no need to sign for transactions under $25.
Mobile payments are on the rise in the U.S. and worldwide, and will be available to a growing number of U.S. Bank customers in the future. As of Nov. 27, 2007, more than 80,000 merchants accept MasterCard PayPass, including many in the Spokane area, such as Regal Cinemas, McDonalds®, Jack in the Box® and 7-Eleven®. Gonzaga University will also accept PayPass at various vending machines throughout its campus in order to provide busy students and faculty with the fastest and most convenient payment option available.
Program participants received Nokia 6131 NFC phones, which are equipped with the Near Field Communication (NFC) technology needed to communicate with MasterCard PayPass readers.
Editor’s Insight: This is the second report in two weeks about a customer launching Near Field Communication technology. Last week, it was reported that the Paradies Shops will install NFC terminals in 500 locations in more than 60 airports and hotels in the U.S. and Canada.
Mobile phone activated cashless payments are still in their infancy, and in time, they will become the dominant payment for small transactions. The vending industry needs to be ready for this change.
At the present time, most vending operators are holding off on investing in the necessary hardware and software to accept cashless payments. Most operators want to wait until the marketplace forces them to make the investment.
Those who are first to offer this convenience will be in a stronger competitive position as customer demand grows, which it will. 01-28-08