As we’ve already reported, there are several technologies that might let you leave your wallet at home and do your shopping – or at least the pay portion with your handset.
Today, the BBC is reporting that this technology is up and running via Beem, which is a method of transferring money from your bank account to the mobile phone, where you can then pay for goods via an SMS. The downside according to the BBC is that there is nothing yet to buy.
This chicken and egg issue isn’t going to go anyway anytime soon. And while we’re used to those plastic cards in our wallets and purses, the truth is that it took a bit of doing to get people to actually use it instead of cash. And given that a check card does pretty much the same thing as Beem, there is the question as why you’d go through the process of <I>transferring money from a bank account</I> to another account just to use the phone to pay. Don’t credit cards and check cards make these transactions fairly simple already?
The big hurdle here for Beem, and any other companies trying to make currency digital, is that there has to be incentive. Signing up for Beem is not as simple as click and go. And even once the money is actually available – and by available we mean available only to use via Beem – you have to find places to shop. At present there just aren’t enough vendors signed up to accept payments via the phone.
This could make mobile phone money a tricky thing. Now on the other hand, were a company like PayPal to get involved, where you could access money in your PayPal account or linked bank account and use the phone instead of a check card, well that’s something else. Vendors wouldn’t need to do anything other than upgrade to a card-swiping machine that could receive the SMS, and to the receiver it would be akin to getting money the same way they do from a check card or credit card.
Stores already pay fees to accept credit cards; so trying to get them to accept money from yet another company seems like a stretch. For mobile money to really work it will likely need to come from a major player, not another start up.