Technology makes mobile payment easier
By David Pitt |
December 2, 2010, Thursday
|
Print Edition
Print Edition
JUST as plastic rendered paper checks nearly obsolete, gadgets may soon do the same to credit and debit cards.
Smart phones and other mobile devices are staples for many holiday shoppers. That's because retailers are taking advantage of their low-cost ability to offer deals on websites like Facebook and Twitter (Think: no paper or mailing costs). Technology is also making mobile payments easier and helping to provide what can be a less expensive option for businesses.
It's an important development because companies like PayPal and the major credit card issuers charge 2 percent or more per transaction. But more informal money transfers are another key factor and their number is growing. This may include purchases from smaller businesses or just sending money to friends and family without writing a check.
Already such direct electronic money transfers between individuals are estimated to total some US$3 trillion a year, and that's only expected to increase.
That means there's a clear profit potential, making the business ripe for additional players with new ideas to emerge.
An Iowa-based company called Dwolla Corp is one of the new players.
The company yesterday launched nationally its lower cost payment processing service for use by businesses and individuals. The firm was already operating in Iowa and California. Dwolla offers a payment service that charges a flat fee of 25 cents per transaction.
Banks have relied too long on debit and credit cards and their high fees, said Matt Harris, managing general partner of New York-based Village Ventures, a venture capital firm.
"It has sparked a lot of entrepreneurship on the part of people thinking they can do it better than these sleepy giants," Harris said.
That certainly rung true for Dwolla creator Ben Milne. Two years ago he came up with the idea of a low-cost payment system and found investors willing to bankroll him.
Smart phones and other mobile devices are staples for many holiday shoppers. That's because retailers are taking advantage of their low-cost ability to offer deals on websites like Facebook and Twitter (Think: no paper or mailing costs). Technology is also making mobile payments easier and helping to provide what can be a less expensive option for businesses.
It's an important development because companies like PayPal and the major credit card issuers charge 2 percent or more per transaction. But more informal money transfers are another key factor and their number is growing. This may include purchases from smaller businesses or just sending money to friends and family without writing a check.
Already such direct electronic money transfers between individuals are estimated to total some US$3 trillion a year, and that's only expected to increase.
That means there's a clear profit potential, making the business ripe for additional players with new ideas to emerge.
An Iowa-based company called Dwolla Corp is one of the new players.
The company yesterday launched nationally its lower cost payment processing service for use by businesses and individuals. The firm was already operating in Iowa and California. Dwolla offers a payment service that charges a flat fee of 25 cents per transaction.
Banks have relied too long on debit and credit cards and their high fees, said Matt Harris, managing general partner of New York-based Village Ventures, a venture capital firm.
"It has sparked a lot of entrepreneurship on the part of people thinking they can do it better than these sleepy giants," Harris said.
That certainly rung true for Dwolla creator Ben Milne. Two years ago he came up with the idea of a low-cost payment system and found investors willing to bankroll him.
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