Payments on the go, the ongoing saga

We live in a generation that increasingly values the ability to do everything ‘on the move’, and that’s caused a great deal of innovation to occur to be able to support it, though at the same time it’s also been the cause of it.

As I’ve covered before, there are some proposals about making use of a mobile phone in order to pay for goods, and there have been some more plans introduced that I’d like to cover.

Don’t get me wrong, the ability to pay for some things by phone isn’t inherently bad, no matter how I make it sound, just unnecessary in a lot of cases.

Yesterday, though, PayPal wrote on its blog about the ‘future of shopping’, and sure there’s a nice glossy video explaining how wonderful the future will be where you can pay with your phone – and PayPal will handle the money bits for you, so you only have to give them your card details, not everyone else.

Though, I have to say, I think a lot of their proposals need some refining.

Firstly, you could be able to type in your phone number and a PIN. Don’t know about you, but I don’t know how many people have my mobile phone number. If that means that the only thing between them and my money is a 4 digit number because I or someone else gave them the number for another purpose, count me out. I can only hope that this means I’ll have to opt-in first for this facility, and then miraculously fail to do so.

Secondly, PayPal are talking about introducing a payment card of their own with which funds can be loaded onto. This doesn’t, inherently, strike me as a bad idea – provided that it’s primarily pre-paid (or has suitable blocks to prevent it just siphoning funds out of my account if I so choose), and I can see this as a viable force for parents of teenagers to give them spending money in a meaningful way.

That said, in the UK at least, I’m not sure what PayPal’s legal position is and whether it would fall under the Credit Consumer Act which, amongst other things, offers certain protections to the cardholder in the event of transaction disputes and not receiving goods. Conventional credit cards have this protection – PayPal may or may not, which means it might be better suited to low-value transactions and leave the conventional higher-value transactions to the regular boys.

Thirdly, and almost certainly most problematic is that of simply using your phone to pay, on the notion of avoiding the checkout. Don’t get me started on the payment issues therein; I’ve covered that before, but there is one angle that occurred in that discussion that applies here too: how do you pay for anything of significance and leave the store? Most stores that have anything of value have electronic tagging on the item, and leaving the store without going to the checkout is invariably going to set alarms off.

I’d note that the same problem arose with paying for a meal in that restaurant example, wherein even after showing the phone display (and receipt) to the manager, the manager was still insistent that payment was required – and this just makes it so much worse, because it’ll be potentially any person in the store with a mobile phone.

The last salvo from PayPal’s proposal is the notion that you could find and order products in-store through a mobile phone and have them delivered to your door. I’m not sure this last one’s an innovation on any level; I’m well aware that some stores have basically been offering this in the past (especially Next, I’ve seen) which means you get all the capacity of experiencing it (including trying it on, if it’s clothing) and then having it delivered. Now, the real use is in the case where they don’t have the right size in stock and that you can order it – but I’m not sure this is really the territory for PayPal.

The simple fact to me is that a lot of stores that sound like they should benefit from this practice actually wouldn’t. Most of them already keep a variety of sizes in stock anyway and have quasi-automated stock refills, but in a lot of cases, the margins are sufficiently low that the additional cost of implementing this would actually be a burden to them that they don’t really want or need.

So, long story short: some interesting ideas, but I think they’re pushing too hard on trying to grasp at peoples’ money, and less about actually making it better for the consumer.

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