Boku Accounts mobile instore payment solution

PayPal has another new competitor to worry about today. Following this month’s launch of Pingit from Barclays, today Boku announced a new mobile payment solution – Boku accounts.

You’ll probably never hear the name Boku though, it’s much more likely that it’ll be presented as a branded product from your mobile telephone provider.

The way the solution works is similar to a pre-pay credit card (or could be simply billed on your mobile phone contract, although only the pre-pay option appears to be currently available). However it’s designed to work wherever you could use a credit card without the retailer needing any special equipment.

For those without NFC (Near Field Communication) enabled mobiles (and that’s almost everyone in the UK) NFC stickers will be provided which will enable you to pay in places like McDonalds just by waving your mobile at the NFC enabled credit card terminal. The service will also come with a payment card that can be swiped to support payments where retailers don’t have NFC enabled equipment.

Boku’s claim to fame is that neither the consumer nor the retailer will need to pay for any special equipment. If you’ve got a mobile cell phone capable of receiving text messages you’re good to go.

Should PayPal be worried? Well it’s worth remembering that PayPal are testing many solutions for in-store payments already. They’re testing a service in Home Depot stores in the US where you can pay by typing in your mobile phone number and a PIN into the merchant’s terminal. In the UK they have a Pizza Express iPhone app which allows you to pay without even touching a payment terminal.

PayPal also purchased Zong back in July 2011, Zong is a very similar proposition to Boku and similarly relies on mobile text/billing to facilitate payments. Zong gives PayPal the same 250 odd mobile carrier relationships that Boku boast.

Payments, and especially in-store mobile enabled payments are going to change how we pay in 2012. The only real question is which solutions will be most convenient. NFC appears the most likely solution to win, but that relies on retailers upgrading their equipment and on consumers getting NFC enabled mobiles.

Alternative solutions with no equipment upgrades look much more attractive but expecting retailers to install custom software or hardware solutions as Pizza Express have done isn’t a realistic proposition. Mobile instore payments need to work with no hardware upgrades, but still be accepted anywhere you could swipe your credit card, before they’ll be widely adopted by consumers.