A development being overlooked by payments pundits is the use of smart phones by restaurant operators to enable their customers to find nearby locations, review menus, order food, and prepay.

Consumers are using their mobile phones for take-out, delivery, even dine-in meals. Operators are finding efficiencies in enabling customers to skip the line with their phones, especially when the mobile ordering is integrated into restaurant POS systems.

Pizza Hut and Papa Johns were the early innovators in mobile ordering. Today, thousands of restaurant locations across the U.S. have enabled mobile ordering and payment.

Our best estimate is that consumers in the U.S. are currently ordering and paying for more than $250 million annualized in meals using applications developed specifically for mobile phones.

Consumer behaviors and practices being formed by ordering and paying for meals with mobile phones will set the stage for similar retail applications.

I should mention that I've been working with a southern California mobile technology company called Just Enjoy (http://JustEnjoy.com) that is gaining traction in the space.

Posted by Dan Stiel, 29/06/2010 9:48am (2 years ago)

Do we really believe there have been significant payment innovations in the last two years? My view is that the incredible surge in social media married with existing payment applications will be the major driver of change in payments. It's not the way payments are made - that's a question of adoption rather than innovation - it's the way consumers (and businesses) are increasingly using new interfaces to make payments. Mobile payments, Twitter, Facebook, etc. are just illustrations of the market catching up with the 10 year old concepts of the e-wallet, electronic bill pay and more.

Posted by Scott Songer, 29/06/2010 8:55am (2 years ago)

ohn Aldridge South Africa. I note Mark Gerbans comments but think the mobile payments thrust will come from cash-replacement transactions - and these will be low value .... maybe less then $50.00. I think all banks (not just European) will struggle if they try to follow the card model with multiple banks requiring complex, expensive networks and settlement procedures. Just as MPESA succeeded in Kenya by being first to market with 90% retail exposure thru their airtime sales, in any on-line banking community, the first to market with mobile payments must have the infrastructure to dominate the market. This will dramatically reduce security threats with their single account presence, and ensure the costs are kept to a small fraction of those for card services. I think all first world economies could support mobile payments, and looking at Africa we can also track the emerging mobile model once we confirm stable GPRS local mobile networks. I think it is difficult for us all to drop the old banking mindset when we are given the power and flexibility of mobile technology.

Posted by John Aldridge, 28/06/2010 6:34pm (2 years ago)

John Aldridge Johannesburg South Africa. I read with interest the various thoughts and comments. Most initial comments from Russel and gary are fine, but I worry about guys saying that we do not need banks - or wecan eliminate cash. I think too many comments coming from US based articles are introvert, and show little knowledge of the real world outside the US? In Africa the average cash transaction is less than US$2.00 and with 25m people buying prepaid airtime in similar small increments, we are looking at a micropayment requirement rather than a payment option to replace cards? The actual cost to an SA card issuing Bank is approx $1.00 to acquire a transaction including staffing/comms/IT/interchange etc. That might be okay for 3m wealthy families in SA... but not the other 35m. Lets agree the modern cellphone is rapidly becoming the one single personal technology device. To make it a banking terminal we have to have internet comms (minimum GPRS) and apps with basic security, and bank hosts with simple cash-replacement features. In SA we will shortyl have a system that will offer free banking to the individual... with comms cost of less then US$0.001, and minimal host costs covered by retail acquiring charges. M-PESA in Kenya works by using airtime as a currency.... in the real world our banks have to control our funds - and especially exchange rates for cross-border transactions. Sadly GSMA are working too close to the Card Manufacturers, and they will push for EMC/card standards on phone... that might suit London and NY.... but not those of us in the real world.

Posted by John Aldridge, 28/06/2010 6:33pm (2 years ago)