We Accept Major Credit Cards, Cash, Money Order and Cellphones!

So, imagine this: It's poker night. After a friendly evening of cards, it's time to tally up the chips. Since you aren't a very good poker player, you ended up owing the winner a few bucks. Pulling out your purse or wallet, you realize- Oh no! You are out of cash! So what are you going to do? An I.O.U might work, but you don't want to be labeled not only a loser, but a broke loser who can't pay up. So, you quickly go over your options in you mind. You could drive over to an ATM and then stop at a 7-11 to get some change, but that sounds like a lot of hassle. You could always write your friend a check, but you don't even carry around a checkbook anymore. What to do? Well, if you had the new iPhone app from PayPal, you could settle your gambling debt with a few keystrokes and a cell phone “bump”.

 

It looks like this may well be the future of how we buy things, lend money and pay back our debts. There are several companies ranging from the big to the very small, who are offering a “pay by cell” service. The companies are PayPal, Intuit, Veriphone and Square, just to name a few. Each of these developers has come out with ways to help people avoid carrying around cash or checks.

 

Some of these companies have developed micro scanners that can be plugged into your cellphone. These micro scanners are capable of scanning a credit card and processing a transaction. The interesting thing about this technology is that it can allow anyone with a cellphone to turn their phone into a credit card processing terminal. Can you imagine asking a friend if you can borrow $10, and they say “Sorry, I don't have any cash on me. I wish I could help.”. This is where you can say “No worries, I take major credit cards.” with a smile.

 

One of my personal favorites in this market is PayPal. They have developed a way to transfer money from one PayPal account to another with a simple bump of the two phones. PayPal requires you to download an app to be able to use the service. Although, that may change in the future because Apple has recently submitted a patent application for their own version of a money transfer system using the iPhone. This “phone bump” convenience has so many practical applications. The next time you are dining out with friends, when the check comes (all on one bill) it is simple for each person to pay their portion just by bumping their cellphone with the phone of the person who is paying the bill.

 

With the advent of Direct Deposit and Debit cards, actual paper money is becoming more and more rare. There are still some instances when you have to carry cash, like when you are paying back a friend or tipping a dancer at a club ( sorry, I couldn't think of any other time that you would have to use cash) or buying beer at a festival beer vending booth for example. With this sort of technology, those things might change. If you could just bump your phone to the beer vendor's, you wouldn't have to worry about hanging onto cash and coins while you enjoyed the festival.

 

In fact, when the New York Times covered this emerging technology several months ago, they interviewed a New York City sidewalk chalk artist who accepts credit cards for donations and to purchase copies of his book by using Square on his iPhone. He said that since he started accepting plastic, his sales have increased sharply.

 

This technology will make it easier for small business owners, housekeepers, Avon ladies, students selling candy for school fundraisers and even young kids to accept credit cards. Can you imagine being a kid and going to family get-togethers with the ability to accept credit cards from all of your estranged Aunts and Uncles? Wow! When I was little, my sister and I had to put on shows or tell jokes just to get a lousy quarter from my relatives, I can't even begin to imagine what it would be like to collect donations just by bumping my cell phone.

 

Of course, the drawback to these services is that most of them charge a convenience fee. For example, GoPayment charges $12.95 a month and then an additional fee of 30 cents plus 1.7%- 3.7% for each transaction, depending on the rate the credit card company charges. Square is a free service to enroll in and they charge 15 cents per transaction plus the credit card surcharge of 2.75%-3.5%. Square is available primarily for iPhones and iPod Touch although they have been planning a launch to add cell providers.

 

If you chose to use PayPal's iPhone app, it is free if you use your bank or your PayPal account. If you decide to use a credit card for the payment, there is a 30 cent charge plus an additional 2.9% of the transaction. If you are already a PayPal user, integrating your current account into your iPhone is very easy.

 

But don't worry, the banks are not predicting the end of paper money just yet. Technology may come and go, and different methods of payments become popular and then fall out of favor. We still need actual cash, even if we don't use it as much anymore. Personally, I don't think that this technology will be scrapped anytime soon, it will be interesting to see how this will change the way we do business.

 

Have you used any of these payment by phone methods? If so, what did you think about them? Let me know in the comments.

 

Are you looking for a job in the world of Finance? Take a look at FinancialJobBank.

 

By Melissa Kennedy- Melissa is a 9 year blog veteran and a freelance writer, along with helping others find the job of their dreams, she enjoys computer geekery, raising a teenager, supporting her local library, writing about herself in the third person and working on her next novel.