Moving to Mobile Payment: Put the Right App in Your Digital Wallet

Lately, it seems like you can't go a week without hearing about how some new mobile payment platform is poised to revolutionize how you spend money.

No doubt you've already heard about some of the big players, like Square, PayPal's Zong and Google Wallet, that are slugging it out for space in your digital wallet. More recently, the Merchant Customer Exchange, a proposed mobile payment standard backed by retail behemoths like Walmart (WMT) and Target (TGT), announced its entrance into the fray.

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Now add another to the list. The e-commerce platform Braintree just scooped up social payment app Venmo, in the hopes of combining the former's established consumer reach -- it already handles $1 billion in mobile payments, representing 10% of all mobile commerce transactions -- with the latter's funky social features like one-click peer-to-peer payments.

With all this heated activity in the mobile space, it's no wonder that e-commerce granddaddy PayPal struck back with the announcement that it will issue payment cards to over 50 million consumers in the U.S. next year to be used at millions of stores across the country through Discover Financial Services.

What's in Your Digital Wallet?

There's no getting away from it: If you don't already make purchases using your smartphone, you will soon. Currently, 20% of all e-commerce purchases happen on mobile devices, and that figure is doubling and tripling year over year, according to Braintree's Ready. Ernst & Young predicts mobile payments will reach $245 billion by 2014.

With so many competing mobile payment options out there, it's hard to get a truly good reading on which will best suit your needs as a consumer. Check out the slideshow below for a look at the players vying for space in your electronic billfold.

10 Mobile Payment App Options
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Moving to Mobile Payment: Put the Right App in Your Digital Wallet

The brain child of Twitter creator Jack Dorsey, Square is an electronic payment service founded in May 2010 that allows consumers to have a card reader attached to their Apple or Android mobile phones to accept credit card payment. Consumers can also use Pay With Square, allowing them to set up tabs at various businesses and pay with their names alone.  Fees are 2.75% per swipe.

A Leg Up: Earlier this month, Starbucks revealed that it will be using Square to process credit and debit card transactions -- this in addition to the coffee giant's $25 million investment in the mobile payment company.

Started in 2008 by David Marcus, Zong became part of eBay in 2011. If a consumer is set to pay for something online, he just hits the red "Zong" button and enters his mobile phone number into the pop-up. The consumer will then receive a secure PIN on his mobile phone that he will have to enter online to complete the transaction.

The Acoustic Odds Against: Though Zong is attractive for your at-desk e-commerce needs, it's designed for precisely that -- a stationary shopping experience, not one on the go. Instead of the triumphant onomatopoeia "Zong," the company might have better named itself with a dejected and resounding "Bonk."

Google Wallet's mobile outfit works by tapping the back of one's phone to a near field communication point-of-sale terminal at checkout. It's available for use at any of the over 300,000 MasterCard PayPass locations and with Visa's payWave system. Google's (GOOG) app allows customers to use the credit or debit card of their choice -- the phone transmits payment to the point of sale -- and Google Offers allows the customer to redeem various deals.

The GOOG Factor: One of the most innovative companies in Silicon Valley has within its tentacles a major consortium of retailers from 7-Eleven and Best Buy to CVS and Sport Authority. It has the advantage of reach on its side, and that alone may be what matters with consumers who want to be able to purchase on their mobile phones anywhere. It's also expanding its capabilities with location-indicating technology that will allow consumers access to in-store deals.

Dwolla launched in 2008, has garnered considerable attention from users of the digital currency Bitcoin, because some Bitcoin exchanges allowed their users to convert to and from traditional currencies via Dwolla. Dwolla also charges a flat fee for transactions, as opposed to the traditional percentage of the sale that most others do.

The Nerd Appeal: If you are making only a few large purchases, as opposed to many little purchases, the flat-fee transaction was attractive. Also, if you are a future-leaning, goodbye-fiat-currency type, the Bitcoin legacy will strike your fancy.

GoPayment uses either a free app from the iPhone or Android app store or a card reader. It allows fees as low as 2.7% per swipe on Visa, MasterCard, Discover and American Express Cards plus $0.15 per transaction.

The Hassle: As far as frictionless transactions go, Intuit (INTU) inserts a bit of stickiness into its sign-up process: Intuit requires a credit check, a minor annoyance that can also chip away at your credit score. To its credit, Intuit has a fee that's 0.05 percentage points lower than Square's, but that might not be enough to steer people away from the mobile payment giant.

SAIL, much like Square, uses a card reader and has an app for Apple and Android phones and tablets. SAIL charges a 2.7% per transaction fee for Visa, MasterCard and Discover cards, and a 3.7% fee for American Express. But you can knock that transaction fee to 1.95% by signing up for a $10 monthly subscription plan.

Fear of Commitment With Innovation: The subscription option could be off-putting to some, and if you do the math, you'd have to spend more than $1,333 a month through the service to break even with the 0.75% discount. But the open platform, which allows app-creating gurus to build iterations tailored to their needs, may be silver bullet VeriFone (PAY) needs to survive amidst stiff competition.

CEO Marc Gardner created PayAnywhere for Apple, Android and BlackBerry devices with a 2.69% per swipe. Users can lock the app when it's not in use for added security -- a nice feature for those who worry about putting banking information into easily misplaced smartphones.

A Fraction of a Penny Saved ... Is Not That Much: With a fee just 0.01 percentage points lower than Intuit's GoPayment, PayAnywhere isn't going to win this battle on price. Intuit willl have to find some other angle to give it an advantage against its mobile payment competition.

CorFire, the m-commerce arm of SK C&C USA, and Payfone have decided to combine CorFire's mobile wallet app with Payfone's remote m-commerce platform. In contrast to many mobile commerce apps that focus only on in-person purchases, CorPay is designed for remote ones, too.

Wheeling and Dealing: Because CorPay is integrated with CorFire's Cor360 platform, it can facilitate promotions, gift cards and other discounts and deals on mobile transactions. This may be the joint venture's ticket to success -- allowing for substantial savings to allow for consumers to stomach the fee percentages on transactions.

Isis, a partnership between AT&T (T), Verizon (VZ) and T-Mobile in coordination with the four major credit card companies, is an app that organizes payment cards and merchant deals on a consumer's phone. In turn, it uses NFC technology to allow a consumer's phone to communicate with a checkout terminal.

A Tottering Goddess of Payment: In ancient Egyptian lore, the goddess Isis was the ideal mother, and the keeper of nature and magic, but whether this company can nurture mobile payment magic depends on whether the mobile network providers can compete with companies that already have a more wide-reaching payment infrastructures in place. Isis is the newbie, set to roll out next month in Salt Lake City and Austin, at which point it will start to answer that question.

When Apple (AAPL) recently announced its Passbook app would appear in iOS 6, it seemed to be making a bold statement it would soon enter the cloud wallet fray. Passbook allows consumers to save discount cards and tickets on their mobile devices and has location tracking technology.

Ill-equipped?: There's a rumor that the iPhone 5 will not have NFC technology -- the form of data transmission most mobile payment systems rely on. That might take a bite out of Apple's (fashionably) late-to-the-party stroll into the mobile wallet market.

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