Your phone is your next credit card

Four recent events suggest that mobile payments are about to take off in a big way.

1. This week, investors pumped $150 million into Square, the mobile-payments company that lets people turn their smartphones into virtual cash registers. The investment values the company at $6 billion.

2. Last week, eBay opted to spin off payments service PayPal. A big part of the reason: PayPal has been held back by its parent company, and the move is expected to free PayPal to increase its mobile payments presence.

3. Facebook is experimenting with a one-touch payments system, and this week TechCrunch reported that Facebook is about to release a peer-to-peer money transfer feature in its Messenger app.

4. Set to be released later this month, Apple Pay will let iPhone 6 and iPhone 6 Plus users make payments at participating retailers simply by using their phones’ fingerprint scanner then holding the phone up to a scanner. Retailers who have already signed up include Bloomingdale’s, Macy’s, McDonald’s, Staples, Walgreens and Whole Foods Market.

More than 70% of U.S. adults have smartphones, and more than one in five have already used a “mobile wallet” in the past 90 days, according to Mary Monahan, executive vice president and research director at Javelin Strategy. More than half of mobile purchasers bought physical goods with their phones.

Monahan said she believes mobile users up to age 45 will make the transition to mobile payments relatively seamlessly. As to the others, she expects the transition to be slower, but to eventually come the same way other digital adoptions have — with a nudge from the younger folks around them.

“Most likely, it will be the sons and daughters who sweet talk and cajole the parents ….” she said. ” Dad — I need the tuition check now, please. Just send it to me using mobile P2P.”

“That’s how teens got parents to text — just so parents could talk to their teens on the phone, they learned in self-defense. Now it’s the next step.”

Source: CNN

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