Never have there been so many new ways to pay the bill on-the-go.
Retailers and credit card companies are suddenly in a mad rush to deploy new scanners, wireless doodads and smartphone apps to make cash and credit cards look so very obsolete.
Small startups like Square are facing off with mega-corporations such as Google and MasterCard. Even Starbucks is experimenting with a cellphone app that displays a bar code for clerks to scan.
Many small merchants couldn't be happier, as they've been suffering with high credit card fees for years. And as with most technology waves, with this Wild West of mobile payments comes the hurdles: security, privacy, accountability.
But there's a dark shadow here, too: security risks.
Mobile analyst Mark Beccue with ABI Research said card companies need to "tread very, very carefully here." And every system should have a second authentication, like a customer tapping out a personal identification number.
The nonprofit Consumers Union group also warns that mobile payment rules are yet to be determined.
For instance, if a payment is funded by a prepaid or gift card, consumers don't get any federal protection on how much they could lose to unauthorized purchases or to errors as they would with typical credit cards. And if the system places charges on a customer's cellphone bill, a feature some of the wireless carriers offer, it might be outside the scope of consumer protection rules.
Here are some ways that completing your transaction is becoming more and more possible in a digital world.
Square is the startup that cracked the dam of the credit card monopolies. The company devised an iPhone and iPad gadget that plugs into the headphone socket and scans the magnetic strip on a credit card. Customers then sign their name on the phone's touch screen and receive a receipt by email.
This allows everyone from artists to startup retailers to start taking credit cards without a terminal that can cost thousands of dollars a year.
Retailers such as Dave Ward of Tampa's Buddy Brew Coffee love it because previous terminals could take 25 cents off each $2 cup of coffee he sold.
"With Square, there's a flat fee, super simple system," Ward said. "I can take my phone to a farmers market and take charge cards anywhere. And Square pays out daily. It literally saves me almost $4,000 a year in fees."
Gretchen McManus uses Square instead of handwriting receipts for her Rover Done Over mobile pet grooming service.
"Clients are just so amazed when they can sign my iPad screen," she said.
For information, go to www.squareup.com.
Starbucks has one of the more interesting models because it's up and running at pretty much every location, Beccue said.
Customers with a Starbucks reward card can simply fire up their phone to display a bar code on the screen. The clerk then scans it with the store's existing retail scanner, and the purchase flows through to the customer's account, which is already set up to accumulate reward points.
That model helps pull together a dream scenario for retailers, Beccue said, because the merchant can track purchases, assemble detailed information and build a relationship with individual customers. The charges eventually show up on the credit card linked to the Starbucks account.
This summer, the system expanded from just iPhones to Android-powered phones.
For information, go to www.starbucks.com/coffeehouse/mobile-apps.
With the name Google Wallet, many in the finance market are paying attention to the tech giant's mobile payment project.
Customers first buy a special phone with a system embedded that uses what's called "Near Field Communications," or NFC. For now, that's the Google Nexus S 4G phone on Sprint.
Customers set up an account through Google. When they shop at stores with the PayPass terminals installed, they can just wave their phone past a sensor, and with a "beep" their payments go through.
Those retailers now include CVS on South Howard Avenue, a few BP gas locations and several independent merchants. The South Tampa bookstore Almost New Books has used the PayPass system for some time, owner Diane Ernst said.
"We only have a couple customers who use it, definitely not the majority yet," she said. The fees aren't excessive, she said, and it plugs right into her existing terminal.
For a list of merchants using Google's system, go to www.google.com/wallet.
Visa is testing a system that puts the antenna on a micro SD card for insertion in cellphones. That project is showing promise, the company said. It can link with promotions at retailers such as The Gap, so shoppers passing by a store can get instant coupons and deal alerts.
Verizon Wireless is experimenting with a system with mobile payment company Payfone that would let customers pay with cellphones, iPads or other mobile gadgets.
As they shop for items, make purchases and pay with their mobile gadget, the charges would show up on their credit card or cellphone bill. The project is ongoing and has no formal launch date.
Meanwhile, major credit card companies are still trying to get another system off the ground by putting electronics in the credit cards in your wallet. It's a small wireless chip that can sync with a payment terminal, in theory clearing transactions.
A small logo with wireless waves typically indicates the chip is inside. Despite being installed in many cards for years, Beccue said that system is still struggling to become mainstream.
McDonald's has the system in many U.S. locations and is testing an expansion in the United Kingdom and other countries.
The system works once a card is within 4 centimeters of the reader, and includes a one-time-use code to help prevent fraud. Visa officials estimate about 150,000 retailers now have readers for these cards, and there will be a bigger push to encourage use.
