Not So Fast? Vendors and Techies Love the New Mobile Payment Systems. But Has Anyone Bothered To Talk To Retailers?

Cool! Magical! Game Changing! These are some of the superlatives being

shouted as credit card companies, banks and the big tech players role out their electronic wallet concepts. It looks like the future. There is only one missing element: the retailers who are going to have to pay to install the new technology that supports these things.

Maybe that wont stop them. Maybe it will be like Walmart decreeing to its suppliers that installing RFID tags on merchandise was simply the cost of doing business. If you wanted to play you had to pay. It could happen here, but instead of one ginormous global trend-setter we are talking about millions, maybe tens of millions of retailers around the world. They will have a say in this. They are the largest employers so carry some financial and political clout. Before we read another story about who's going to win the race it would be nice to hear what the big retailers have to say about the various offerings. No one wants a replay of the DVD vs Betamax conflict in which the best video technology (arguably) lost out to the best alliance network. But not before millions of consumers had committed one way or another and felt burned by the industry.

Be the first on your block to flash your electronic wallet - but dont leave home without your credit cards just yet. JL

Austin Carr reports in Fast Company:

"Yesterday, Jack Dorsey unveiled the latest iteration of Square, his popular mobile payment system for iOS and Android, which now offers consumers the ability to pay merchants without the hassle of pulling out credit cards or dealing with receipts. With Square's new "card case," a sort of digital loyalty card, users can now track all purchases digitally, either through the app on one's iPhone or through receipts sent via text message. Dorsey said Square's new streamlined payment process, elegant design, and in-depth Google-like analytics were undeniable leaps forward in customer transactions. And even as he spoke, the technorati were already amplifying Square's fresh press release and heralding the end of the cash register.

But as revolutionary as it might be, Square has lots of challenges ahead, and, at least initially, asks small businesses to value cool over confidence. Square didn't aim to bring on big-box retailers like Best Buy or Walmart for its launch, which might have engendered immediate trust, if not adoption, by businesses big and small. (Square might not even make sense for retailers who want to easily scan barcodes or run end-of-day reports.)
Rather, it launched with a trendy set of businesses who are asked to shoulder the risk of the newfangled system (a tiny coffee shop attached to a theater that you'd be challenged to find even with directions, a crepe joint in the funky East Village). It's no accident that Dorsey borrowed the language of Steve Jobs during his announcement Monday (using "magical" several times to describe the interface), and that the system is iPad-based. But the launch partners themselves don't seem fully convinced that Square "just works."

At Everyman Espresso and another store in New York City, we immediately noticed that the cash register had not been replaced. One of the central benefits of Square, Dorsey said, was that you'd no longer need the ugly, clunky registers of yore. But they remained up and running just in case. (Another location we visited said they planned to get rid of the cash register soon, and fully run its business through Square.)

To see how the payment system worked, we first purchased an item using the most outmoded system of all: cash. Grabbing the goods, having the clerk ring them on up the register, pulling out a wad of bills, and waiting for change and a receipt took 43 seconds. (Yes, we actually timed it.)

Then it was Square's turn. We handed the clerk another item, watched as he clicked through the Square app, ran the credit card (this took a few swipes), and then asked how we'd like to get the receipt. After choosing the text message option, I entered my phone number, and waited. Time? About 1 minute and 5 seconds. (The payment is sure to be quicker going forward, as my number is now saved in their system. Plus, there are other benefits of the system besides speed, including having paperless receipts.)

But the real proof of Square's future is with its "card case." To set that up, I clicked a link in my text message receipt, entered in some information (username, password, pin number, etc.), and then tried to register for a "card" with Everyman Espresso. This took several awkward minutes, and ultimately did not work. (I imagine it would be even more awkward if there was a line.) I was hit with the following error messages, which seemed to pop up at random. I had full bars and could use other mobile web functions, but not Square. The same occurred when I visited Motek Creperie.

Neither salesperson was sure what went wrong, but both said they thought Square might be coming to upgrade the system in the next day or two. We'll be venturing back then to see whether the merchants can get it working. (Square tells Fast Company it is checking to see if anything is wrong at these two locations.)

The Square process is still being streamlined and will become much smoother in the future, the spokesperson says. "It's still very early, and it's going to take a little bit of time.... It's just that first time where you have to sign up and give information--but then you're good to go, and it's seamless."

For now, though, getting merchants educated and on board feels like a challenge that's bigger than a Times Square billboard. Without businesses' trust and support, Square's first users might only be dissuaded by the same kind of puzzled remark we got from one of Square's launch partners: "So … how does it work?"