What does a wallet-less future have to do with CIOs and enterprise computing? That's what I was thinking, when a bit of my past came back to me. In the Maine general store where I worked during the summers as a teenager in the last century, no one who was anyone carried a wallet. My family did, but we were summer people and newcomers at that. Townspeople who came in to pick up a loaf of bread or boiled lobsters packed in newspapers for a family reunion -- the people who mattered in this pre-Revolutionary War town -- would say, "Put it on the tab." I had to memorize the names and faces of the town's 300 or so families and keep track of who was tab-worthy and who not so much -- or hear it from my irascible employer. That was then. Soon -- early in this new millennium -- there will be an app for that.
Starbucks Coffee Co. announced last week that it is partnering up with Square Inc., the three-year-old mobile payments company with the famous papa (Twitter's Jack Dorsey) to take its already successful mobile payment app to a different level. Initially, customers will have to show phones to buy their skim lattes and scones, just as at other stores that take mobile payments. But once Starbucks deploys Square's geolocation technology, my iPhone will alert a cashier behind the counter that Linda Tucci, the summer girl of old with the "eye-talian" last name, has entered the store. My name and my photo will appear on a screen. If I match up to the image, why then, the cashier will put it on my tab. Moreover, at the end of the month, an employee or back-end system will not be sending me a bill, because the payment will have already been made automatically.
I had to memorize the names and faces of the town's 300 families and keep track of who was tab-worthy -- or hear it from my irascible employer. Soon there will be an app for that.
I don't doubt that Starbucks' decision to pair up with Square has big implications for the payment industry. As Fast Company's Sarah Kessler pointed out, Starbucks could have chosen Google, the king of Android; or PayPal, the granddaddy of online payments; or Isis, a consortium of AT&T, T-Mobile and Verizon Wireless that's hooking up with the major credit card companies on mobile payment. But Starbucks has a different idea, and nobody, it seems, is taking the Square deal sitting down. The Wall Street Journal broke the news this week that Wal-Mart and Target, among other muscle-bound merchants, are forming their own mobile payments channel, the Merchant Customer Exchange, or MCX. We'll see who's boss in this wallet-less world. And no doubt, the fight for hegemony will be as fast and furious as was the fight for what's in our wallets now.
Remember, it was not so long ago that we all carried a wallet full of credit cards from the stores we frequented. If you are like me, they dwindled or morphed to a store-branded MasterCard or Visa, or got cut up and reopened occasionally to get the 20% discount, only to be paid off and cut up again.
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"If you control how somebody pays for something, you control a lot," a CIO told me yesterday. He's the CIO of a large credit union, so the advent of nontraditional players into the payment market is of huge concern to him. But his biggest concern was how his company -- and enterprise computing for any industry -- was going to meet the challenge of customers who want to know and be known to their businesses only through their mobile devices.
"We're not ready for that, and I don't know many companies that are," he said. He wanted to make another point: For people who want to interact just from a mobile device, himself included, it's about instant gratification. Anything less is unsatisfactory.
Welcome to a world where everybody knows your name (and face)!
Let us know what you think about the story; email Linda Tucci, News Director.