While some people might have issues with the service, PayPal should be credited with one major innovation: it enabled the e-commerce revolution almost single-handedly. Those of us who were around before it existed remember how difficult it was to get a merchant account and begin accepting payments online. Now, anyone with a few minutes’ time and a valid bank account can set up a PayPal account and begin accepting online payments almost immediately. With a few more, simple (and free) checks, they can start accepting credit cards too. A person can literally go from no online presence to having a fully functioning website with a shopping cart that accepts payments in just a few hours. Compare that to the weeks we would spend doing the same thing just a decade or so ago.
Although PayPal is still the number one way that most small Web businesses receive credit card and e-check payments online, that’s beginning to change. Other services meant to rival PayPal and promote eBay’s rivals (eBay owns PayPal as of the mid-1990s) began to appear, but haven’t really caught on with nearly the market proliferation PayPal enjoys.
That’s changing now thanks to a combined (though separate) effort by sometime-rivals Google and Apple.
Apple basically owns the smart phone market through its iPhone products. Those, in turn, can be used to accept and process credit card payments on-the-go via two mainstream options. One is a swipe gadget add-on called Square (which has rivals already) that plugs into the iPhone’s data port and allows the user to swipe a card just as they would at a credit card terminal. Another new option is to use the iPhone’s camera to “look” at the credit card and scan the number and name from the front.
Google’s Android isn’t sitting around watching all this, though. Similar options in various forms are available for those devices as well. Google itself, though, is getting more hands-on with the online payments game, putting it’s long experiment in this genre into the cloud.
Google recently announced that its popular Google Wallet service is moving to a cloud-based platform and integrating VISA, American Express, and Discover Card options into its acceptance platform. Wallet has used MasterCard since its initial roll out. Google Wallet is mostly used by people from their smart phones and Android devices. By moving the storage and processing to the cloud and away from the phone itself, Google was able to provide the security required to get these other credit card companies interested in signing on.
Google also added some other security services to Wallet, such as allowing users to log in via the Web and shut down their Wallet account if their phone is lost or stolen. Accounts can be re-activated or re-set for a new device.
How These Are Changing the Game
While these services are not payment gateways in the same sense that PayPal is, they open up the possibility of the enabling that mobile gateways would have. They’re a first step towards creating a new way of accepting and transferring payments that’s both faster, easier, and more convenient than even PayPal is. That’s awesome.