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  • People are getting exciting about mobile payments -- again

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For the past four or five years, we have been hearing about the exciting new world of wireless payments. For the most part, the discussion has been centered around making payments from a mobile device (cell phone for the most part), using either contactless payment chip or a bar code displayed on the screen. As a security professional, I frequently attend seminars and conferences that pertain to this technology so that I can keep up with the latest trends and developments in the payment industry.

Let me preface the rest of this post by saying that I get excited by new technology, and I have enough geek in me to believe that everyone wants the latest and greatest toys as soon as they come out. However, reality and history paint a different picture entirely. Using your phone to pay is an interesting idea, but if it is only another payment option, I doubt that there will be any more traction with it than there has been in the past. The reason I think there might be more to the story this year is that there are interesting developments being worked out that compliment mobile payment, and this new manner of doing business might just start everyone willing to look seriously at mobile payments.

Social networking is dominating web traffic. Sites like Facebook and Twitter are getting more traffic than Google's search engine. Creative business owners, especially in the restaurant industry have taken notice of this trend, and so have technology companies. Several software and hardware developers are frantically working on ways to integrate mobile payments made on a cell phone into a loyalty and customer retention program. In the near future, you may be at your favorite diner and pay with a swipe of your phone. Before you get home, you have an e-mail waiting for you that offers you a free dessert from that same diner if you fill out an online survey about your experience. Others are looking at the people who follow them on social media sites and rewarding them when they come to the restaurant. For example, you say you like a restaurant on Facebook, and the loyalty program associated with your phone tracks this activity. When you pay with the embedded chip on your phone, the POS system automatically applies a "friend" discount to your meal. We can even take that a step further. There might be a time when you step into a restaurant, and based on the GPS chip in your phone and the selections you have made in your favorite social media site, you are offered a discount on today's special if you pay with your phone. All of these things are completely possible, and different companies are working on ways to integrate this technology into the popular POS systems of today.

Unfortunately, those of us in the payment industry have heard all of these promises for an integrated, digital future previously. Every year, the makers of this new technology state that, "This is the year for the mobile payment revolution." While I see some positive signs in that direction, Visa's EMV announcement and NFC chips being embedded in more smart phones, I am going to see how quickly merchants embrace this new technology and open up their wallets to pay for it before I start chanting, "Viva La Revolución."

In the next few years, we will see if this is the beginning of the new digital era, or if we are simply looking at marketing hype over an interesting but ultimately doomed business model.

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