Cash becomes mobile

This week, Starbucks joined forces with Square, a technology start-up that lets you pay for things with a smartphone. Coming from a company whose cafes seem to be on every corner, that's a powerful endorsement. Does that mean your phone will soon replace your wallet? 

    That's hardly certain, because any company offering mobile payments faces a big challenge: convincing people that paying with a phone is safer and more convenient than using cash or a credit card. 
    But the partnership will clearly give a lot more exposure to Square, a company in San Francisco with about 300 employees, and to the idea of mobile payments in general. 
    Square isn't yet near getting the big numbers it needs to become a mainstream replacement for the wallet. To date it has 75,000 merchants using its technology to accept payments. It refuses to disclose the number of consumers using its Pay With Square app, presumably because there aren't enough to brag about. 
    "The biggest friction has been places to pay," said Jack Dorsey, the founder of Square, in an interview. He said that with so many different companies trying to get a piece of the market, paying with a phone has been a "fragmented" experience. But the Starbucks partnership should widen the use of Square. 
    Indeed, businesses of all kinds, including big companies like Google, Microsoft and Sprint and small start-ups like GoPago and Scvngr, are hoping to profit from mobile payments — if only they can figure out what kind of system appeals to consumers and merchants. 
    Google has developed a mobile wallet app that uses a technology called near-field communication, which allows a phone to communicate wirelessly with a nearby cash register. GoPago has an app that lets customers place an order before arriving in a store; it shows up on a tablet on the merchant's counter. 
    Starbucks has already been accepting mobile payments through its own bar code app. With one million app transactions a week, Starbucks is the most successful example of mobile payments to date, according to Denee Carrington, an analyst at the research firm Forrester. She said the partnership should make Square the biggest player in mobile payments. 
    "Now in addition to the neighbourhood coffee shop, they'll be at every corner of New York City." NYT NEWS SERVICE