Beer Money

At Oktoberfest in Munich this year, buying beer and trinkets just will be easier than ever before.  A local start up, Payworks http://www.sacbee.com/2012/09/17/4827747/mobile-payment-at-germanys-oktoberfest.html,  hopes the largest festival in the world will be a showcase for their mobile payment technology.  When one of the nearly 7 million visitors orders a Bavarian hat or stuffed animal, they will scan their card into a device plugged into an iPhone. The cardholder can electronically sign on the screen, then the phone instantly processes the payment.

SmartPhone processing credit card

The smartphone/card reader combo isn’t new.  Several companies in the U.S. have deployed plugin card readers over the past couple of years, and are now working on the next generation, combining location services (the GPS in your phone) with payments.

The question is whether this is a permanent solution, or just a step to full mobile payments that will go the way of the cassette tape?

Credit/debit cards are widely used and accepted, both by merchants and consumers. Today the mobile payment technology revolution looks more like a gold rush.  The major banks and credit card companies like VISA and AMEX, phone systems including Verizon and tMobile, tech giants Apple and Google, and a myriad of small start ups are all scrambling for a motherlode payday.

This frenzy will produce big winners and big losers. The complex forces of markets, regulators, marketing and adoption will take their toll.  Questions abound with few clear answers at the moment.  Questions such as will phone systems fall under banking regulations? What new equipment investment will burden merchants? And will Apple’s Passbook lock out Google’s wallet?

One thing is clear: Consumer adoption of smartphones guarantees this push to the next form of currency.  We may leave home without a wallet, keys or sunglasses.  But few of us forget our phone.

The outcome will effect all of us and how we buy stuff.  Whether its that new suit at Nordstrom, a triple latte at Starbucks, or trinkets at Oktoberfest, your smartphone will handle it.

Just as credit cards overtook checks and cash as the coin of the realm in the late 1980s, phones are poised to push them aside. So, here’s my credit card; I’ll take a large Bavarian hat in blue, please.