Can Stickers Drive Mobile Payments?

mastercardMasterCard and Blaze Mobile today unveiled stickers that can be attached to mobile phones and used to charge purchases at existing PayPass payment readers. PayPass is MasterCard’s mobile payments processing effort currently in use at gas stations, supermarkets and other stores. The RFID sticker, offered by Blaze Mobile, does away with the need for a key fob. But will such stickers really help drive mobile payment adoption?

MasterCard hopes so. As it notes in the release:

MasterCard sees this approach as a bridge to fully integrated contactless payment capabilities using NFC (Near Field Communications) technology. “Having a payment capability on the phone is a great way for consumers to see the benefit of having a payment capability in the phone,” added Art Kranzley, Chief Emerging Technology Officer, MasterCard Worldwide.

The sticker is a stop-gap solution to one of the problems associated with mobile payments made using cell phones: the lack of Near Field Communication chips inside the handsets. Most card processing companies and even banks view NFC chips as the most secure means to pay for transactions on a mobile device, but without a clear demand for the chips, handset makers and carriers won’t put them in phones.

NFC radios have been an unrealized dream for the payments industry (and NFC chipmakers) since 2003, and adoption has been slow (Nokia includes NFC chips in some of its phones). ABI Research estimates that in 2009 the value of mobile commerce transacted via non-NFC methods will total $1.6 billion, while mobile commerce conducted via NFC will be minimal. Those non-NFC methods include SMS text messaging and buying stuff online using a smartphone.

So MasterCard is hoping the RFID stickers will get consumers to clamor for NFC chips inside their devices. Regardless, they don’t solve the other main impediment to mobile payments, which is the lack of a business model that rewards the credit card company, the merchant, the carriers and the banks. Mobile payments through NFC require a whole new business model and partnership among all of the potential players.

What do you think? Will stickers will help mobile payments stick, or will SMS and better mobile web sites for vendors comprise most of our transactions on the phone?

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