Online to Offline: How Mobile Payments Will Shake Up Real-World Commerce

With Google queuing up the debut of its mobile payments system on Thursday and Square announcing plans to replace the cash register and the wallet in one fell swoop, there’s a lot of interest in the use of cell phones to pay for things in the physical world. This morning, we’re hearing a bit more about this hot area of investment at a panel at TechCrunch Disrupt in New York, which you can watch by livestream. Exploring the topic are Stephanie Tilenius of Google Commerce and Payments, Alex Rampell of “transactional advertising” platform TrialPay, and venture capitalist Lewis Gersh of Metamorphic Partners. TechCrunch editor Erick Schonfeld is moderating.

Q: How do mobile payments affect daily deals and other local commerce? Tilenius: We call it the age of mobile-local.Consumers will be able to walk around and get deals. You’ll see us embedding offers throughout our mobile experience. Gersh: We could retarget consumers [with advertising] who were in a retail store. It could be Groupon having local pickup for offers.

Q: How can you make local advertising work, beyond Groupon? Rampell: Local businesses would rather get a check than a click, and they’re willing to pay for that. Tilenius: Groupon is a great model, and congratulations to them for creating it. But Groupon has tapped into one element of it. Ultimately it’s going to be about customer management.

Q: What’s compelling about Near-Field Communication (which allows consumers to wave a cell phone at a product to get more information or to pay for it), which Google is backing? Tilenius: The ease of use is compelling. You could see a product in Gap and if it’s not in your size, you could use NFC to order one in your size and have it shipped to you tomorrow.

Q: How soon will mobile payments catch on? Tilenius: It’s going to happen quickly. There’s already a ton of activity in this space (though a lot of it is overseas). In Singapore, everybody uses NFC for payments.

Q: How would NFC help local or e-commerce? Gersh: If you go to a local coffee shop and say I can promise you 1,000 new customers if you install this device, they’ll probably do it.

Q: What do you think of Square’s latest announcement? Rampell: Square is really competing with cash. If you want to make a $500 purchase at a flea market, this works better than cash. They can manage the fraud problem. Tilenius: Square isn’t trying to compete with Visa and Mastercard. They’re servicing really small merchants and displacing cash. It would work well to pair deals with that.

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