Smartphone payments set to soar due to prepaid innovation

Imagine being able to pay your car park or bus fare and buy a drink or newspaper simply by holding your smartphone near a wireless terminal. Thanks to the innovation of prepaid providers, this will soon be a reality, and it will have a huge impact on many business sectors.

Kevin Harrington, MD of Global Prepaid Exchange explains, "Consumers are always interested in new and convenient ways to make payments, and of course many businesses want to reduce the time it takes to process each customer.   The prepaid industry is therefore working with leading businesses on prepaid solutions that use smartphone technology."

Recent exciting developments in the world of smartphone prepaid technology include the launch of a new system by the Danish and Swedish postal service, which sends a unique code to users' mobile phones to be added to envelopes in the same way as a stamp. At launch, users will need a subscription with a mobile phone network but prepaid accounts are set to follow. Starbucks in the US also announced in January that customers can now pay for their morning latte through a mobile app, powered by prepaid innovators CashStar, which is scanned by the cashier. The app then deducts the purchase from their prepaid Starbucks account.

In the same way as making card payments, there are security considerations with paying via a smartphone. However, sophisticated encryption technology helps safeguard personal information, and providers that offer a direct connection between a mobile device and point of sale system offer minimal risk by cutting out as many intermediaries as possible.

With payment via mobile devices set to grow in 2011, Kevin Harrington, says a number of prepaid companies are already leading the way with contactless payment. "Mastercard has recently launched watch2pay, the first watch worldwide which can be used for contactless MasterCard payments. The MasterCard PayPass enabled watch means you can pay with the watch everywhere MasterCardPayPass is accepted. All it takes is a simple swipe over the reader."

Other brands are thought to be joining this ever growing industry, with the iPhone 5 believed to be including technology for payment use when it is launched in July.

Kevin Harrington continues: "Over the coming year, as new products come onto the market, the wallet will start to be replaced by the e-wallet."

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