CRF Blog

International Banking: Mobile payments

by David De La Torre

In A wealth of wallets, The Economist reports on new technology for making credit card payments.

There has been massive growth in supplying payments services to tradesmen such as plumbers or flea-market stallholders, which until recently could accept payment only in cash or by cheque. Yet cheques are bouncy, and although cash has its attractions — foremost of which is that it is easily hidden from the taxman — carrying large amounts of it is risky, and customers can spend only as much of it as they have in their wallets.

In America two firms, Square and Intuit, lead this market with small devices that attach to smartphones and allow even the smallest business or tradesman to accept credit-card payments. Both firms offer free card-readers to users and then charge them a fee of about 2.7% of the amount that changes hands. Both are growing at a rapid clip. [more]