Perhaps you've read how smartphone payments, already popular in parts of Asia and Europe, are coming to the U.S. in a big way. These are telltale signs that the mobile-payments revolution has arrived.. (but changing) the way Americans pay for stuff is going to be really hard work. Merchants don't want to upgrade pricey point-of-sale terminals so that they can work wirelessly with smartphones unless e-wallets become mainstream, and e-wallets won't become mainstream until consumers can use them just about everywhere.
Not only will the phone or the tablet become a wallet for consumers, but it will also turn into a credit card reader and a register for merchants. Shoppers will use their mobile device as a coupon book, a comparison-shopping tool, and a repository of those unwieldy loyalty cards they carry from everyone from giant retail chains to the corner bakery. And your smartphones will serve as beacons that will alert a retailer when you walk into its store so that it can recommend products, show you reviews, or direct you to aisle five, where that beanbag chair you didn't buy last week still beckons -- and you can now have it for 10% off. You won't even need a few singles to tip the valet or pay the dog walker, because they'll take mobile payments too.
The problem with Square's utopia -- and those of its rivals -- is that it is a bit of a walled garden, for now at least. "You have a potential situation where consumers are confused into doing nothing," says Drew Sievers, CEO of mFoundry, the company that helped Starbucks develop its mobile app.
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