Mobile Payment Services Show Promising Future

By Thomas Cullen
Tech & Innovation Editor

Mobile payment technology usage among North Americans is lower than expected for the Credit Card companies and tech firms trying to integrate their services together. An Accenture survey says that only 18 percent of North Americans use mobile payments on a regular basis as opposed to 52 percent of the survey population being “extremely aware” of their existence. The survey continues by saying that 23 percent of Millennials and 38 percent of high-income households use the technology at least once a week. Fortune continues by reporting that partnerships between American Express being added to Apple Pay as well as the introduction of Chase pay. Chase pay is an alternative to Apple pay on the iPhones which still uses the near-field communication (NFC) technology to communicate the account information from the phone to a payment receiver. reports that this technology uses a system that sends encrypted transaction data to Apple when a payment occurs, and then that data is sent to the credit card company from Apple about the transaction to complete the payment.

Another important payment technology milestone is EVM chip technology physically embedded in a credit card. EVM stands for Europay-MasterCard-Visa and it is also known as “chip and PIN” technology where the card’s information is stored in a metallic chip on the surface instead of on a magnetic strip. RFID (radio frequency identification) is used to authenticate the card as well as transmit the cards information. A more secure PIN number is used instead of the signature of the buyer in a payment, and this has led to a drop of a type of fraud called card-present in the UK and Europe.

The advent of the smartphone has led to the creation of applications that offer money transfer services. An app called Venmo is the most famous in this category, but there are many others that offer this service such as Paypal, Bank of America, Chase, Google Wallet, etc. This service works by users entering their bank and/or checking account information- and when they want to send money, the app will charge their accounts and transmit the funds to another user. If the person is receiving these funds, the money will be kept in their “digital wallet” on the app until they transfer those funds into one of their accounts.

Despite PayPal being in competition with Venmo, PayPal purchased Venmo’s parent company (Braintree) in 2013 for $800 million.

Currently, it is not allowed to make transactions to merchants through Venmo because there is no method to dispute the money transfer if the product or service is not received. PayPal is trying to change this- they want to allow people to make transactions to merchants via Venmo. PayPal is trying to use their user base as a method to make sure that people are using Venmo instead of the competing services. Forrester Research found that 73 percent of American adults who make digital payments already use PayPal. PayPal also reported that Venmo transferred $2.1 billion in funds in the 3rd quarter of 2015 as opposed to $700 million in the 3rd quarter of 2014. The CEO of PayPal, Dan Schulman, said that the way they expect to make money off of Venmo once they allow the transfer of funds to merchants is that they will charge them 2.9 percent on each transaction plus an additional 30 cents. He continued by saying that the service is expected to be fully functional by the end of 2016.

A version of this article appeared in the Tuesday, November 3rd print edition.

Contact Thomas at

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