Mobile Commerce Is Here, But Must Become Faster, Cheaper, Safer

KANSAS CITY – Companies are working hard to make it easier to reach out, touch someone, and slip them some money.

KCnext, a tech council,  hosted a panel to discuss payment platforms for mobile devices and their potential impact on the economy and the future of the money system. The choice of panelists shows how money is changing: It included founders of Chirpify, Twitter’s e-commerce platform, and Dwolla, a cash-based online payment network, as well as a senior vice president with the Kansas City Federal Reserve.

While the panelists differed in their roles in and approach to mobile payments, there was one belief they shared: The age of mobile commerce is already upon us.

Chris Teso, CEO of Chirpify, is working hard to nudge the world into the new age. He called Twitter’s digital marketplace a form of “conversational commerce” aimed to make online sales between buyers and sellers as easy as possible. People can donate money to organizations or politicians, purchase MP3’s and just about anything else.

Simplification of the payment process is the end game for Teso. Users on Chirpify can make transactions with a single tweet to a seller, without stopping at a digital checkout counter.

Teso’s goal is to simplify digital purchasing so much that you forget you’re even spending money.

“I actually want them (payments) to disappear into the background. I want it so if you’re buying something, you don’t have to think about it. It just happens,” he said.

Teso said we’re currently living in a “Wild West” of mobile payment systems, where consumers have yet to rally behind any single company or system.

Along with the Wild West feel is a foreboding in the marketplace over security issues involved with mobile and digital payments. This may be why consumers aren’t flocking to any given payment platform quite yet.

Barbara Pacheco, who heads the Financial Services Division of the Kansas City Federal Reserve, pointed to many of the benefits of mobile payments, but also asked that innovators put “a lot more thought” into the security of mobile payments.

In the meantime, acceptance of mobile payments may be slow to grow for some time, with consumers worried about security issues. What’s needed, according to a 2011 report from the KC Fed, is for an in-depth dialogue among  regulatory agencies, as well as  stakeholders in the mobile payment industry.

Pacheco wasn’t alone in her concerns about the security of the burgeoning mobile payment system. Ben Milne, CEO of Dwolla, said that even the current level of identity fraud is unacceptable.

He asked the crowd if any of them had experienced identity theft. “For those of you who didn’t raise your hand, that just means your identity hasn’t been used yet. It’s already been stolen,” he said.

Milne emphasized the need for a strong infrastructure to make payments not only easy, as Teso wants to do, but also inexpensive and secure.  In Milne’s view, the basic infrastructure we need already exists.

He pointed to the current Automated Clearing House, or ACH, payment system as being the best medium to handle mobile commerce. ACH networks already process electronic payments for checking accounts and credit and debit cards. Milne favored ACHs because they are composed of banks—long stalwarts in the payment system.

The existing ACH system is unbelievably reliable. It always works, which is amazing,” he said.

Milne, along with the other panelists, was optimistic overall about what mobile commerce might do for the economy. He waits for the day when a coffee shop knows he is coming and has his soy latte waiting—and paid for—before he gets to the shop. That, for him, would be value added from mobile commerce.


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