One of the most popular theories as to why mobile payments have yet to explode: merchants don’t want to spend to upgrade their POS systems.
If that’s the case, why not effect change in mobile handsets instead?
That’s the general strategy behind the latest partnership between Mobeam and ams, as the two plan to enable smartphones to interact with existing POS equipment in new ways.
We’ve covered Mobeam before, but a simplistic explanation of what the company’s goal involves transmitting bar codes to traditional 1D scanners through infrared light. By transmitting “anything with a bar code” to POS equipment that already exists, Mobeam will look to fundamentally change the coupon industry by eliminating the need for most paper coupons.
“It can be a loyalty enabler, a wallet enabler, a gift cards, you know there are several aggregators in each of those areas, and we can do any of that,” said Marcia Donner, COO of Mobeam, during our meeting at Mobile World Congress. “Essentially we can provide anything with a barcode the ability to beam at point of sale.”
While Mobeam’s strategy is, at minimum, more interesting than the endless NFC-based mPayments clones that largely dominated MWC, it’s also untenable given how most smartphones are currently designed.
That’s where Mobeam’s partnership with ams comes into play. A company that’s technology is already used by “every major smartphone manufacturer,” according to Director of Marketing Jerry Koontz, ams plans to take existing technology within smartphones – namely an invisible infrared light that’s used to determine proximity and alter brightness – and use it to transmit Mobeam’s barcodes.
According to Koonz, the chip needed to enable this infrared beaming can be integrated into current smartphone designs within their existing footprints, which should make it an attractive addition for manufacturers.
“As a technology company, it’s all about differentiation. There’s differentiation in terms of the technology and in terms of the end user benefits, so even from a handset we can offer multiple value propositions,” Koonz said. “Now smartphone manufacturers can really move forward to have another differentiating element to their product, and can obviously provide more services to their consumer without any changes to their device.”
The strategy’s an interesting one, but it’s fair to wonder whether this is creating one problem by solving another. Sure, merchants don’t have to upgrade their equipment with Mobeam, but handset makers do. Are they more likely to do so than retailers and POS manufacturers? Koonz said ams is already in discussion with some major manufacturers, and that he expects phones with the new infrared capabilities to begin rolling out in Q3 2013.
That remains to be seen, but Donner argued that a transition to Mobeam’s barcode scanner would be easier on consumers and merchants alike than would a comparable transition to NFC.
“We provide value right now without a change in the industry. You don’t have to change out the terminals. You don’t have to reeducate the consumer. Consumer are concerned with, ‘can I use my phone now? Does it scan? Is it going to work, and should I even try it,” Donner said.
“But we can do it right now, and when you take away that apprehension, it can lead to adoption.”
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