By Zachary Ehrlich  Mon Dec 31, 2012

Jumio Expands, But Mobile Finance Offers Little Opportunity

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Jumio has made tremendous strides with their credit card scanning software, and now more than 20 new companies will use Netswipe and Netverify for onsite credit card purchases. Jumio’s credit card scanning solution, which we detailed in July of 2011, has appealed to a mass of startups who will join the larger Travelocity and Western Union in using the software.

“The payment processing is safe and very easy to implement for any online company taking payments by credit card,” which is basically everyone nowadays, said Marc Barach, CMO at Jumio in a phone interview. GoPago, a company that has built their business based on the premise that coffee shop patrons need easier and quicker access to lattes through cell phone payments, has chosen to leverage the Netswipe technology.

If you thought GoPago was cool before this, you will never want to buy coffee with cash again. Anyone who has already decided to buy coffee before even getting into the store clearly has no time to type in any credit card information. And now they don’t even have to – Netswipe uses the phone’s camera to scan the credit card.

While these technologies seem to go hand in hand with one another, they still only marginally approach the mobile wallet vision. E-commerce, mobile finance, mobile payments and whatever other terms you want to throw in for good measure, seem to have hit a ceiling at providing really fast and convenient coffee orders. Where is the promised grocery store revolution, with no checkout lines and payments straight from the phone? What happened to giving your cellphone to your waiter to pay for the check after dinner?

While Jumio’s efforts meld seamlessly into the current mobile finance arena, the level of play is still infantile. We have yet to see a solution that will extend credit through a mobile payments app based on spending history. The so-called “alternative credit score,” based on on-time payments for utilities and phone bills, is still just a myth. While credit card companies have limited access to a crucial spending demographic thanks to the CARD Act, a company like Google has exactly the right platform to marry the two together.

Google does not have to become a payments company to extend credit. If it tracks the payments of its users through the phone, it should know whether they are creditworthy or not. A simple pilot program could extend credit to college students without access to credit cards and see how well they respond. Better yet, Google already has the physical card.

The mobile payments industry cannot sustainably rest on a community of coffee drinkers. The limited scope of payments and users almost harms the efforts by reporting back such narrow data. It also inadvertently leads companies like Jumio to enter and complement the trends instead of improving them. While Jumio has certainly made its mark by signing with Travelocity and speeding up and securing the checkout process, it doesn’t add up to the mobile finance space that we all dream about.

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