Subway Signs Up to Accept Payment via Smartphones - Other News

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Credit Card Applications » News » Other » Subway Signs Up to Accept Payment via Smartphones

Subway Signs Up to Accept Payment via Smartphones

Subway Signs Up to Accept Payment via Smartphones

Pretty soon, hungry Sprint users will be able to grab a subway sandwich with a simple tap of their phone. MasterCard recently announced that 7,000 locations out of the 24,551 throughout the United States will be equipped and ready to accept payment via Near Field Communication (NFC) technology by the end of the first quarter in 2012. That represents 28.5% of Subways nationwide, according to internetretailer.com.

Until now, Subway was not set up to accept PayPass, the “tap-and-go” payments system MasterCard introduced in 2002. Google Wallet, Google’s application that gives a smart phone the same payment capability as a card containing an NFC chip, is compatible with the approximately 150,000 PayPass terminals that already exist in various stores across the country. It’s estimated that worldwide, there are roughly 100 million devices and plastic cards in circulation that have embedded PayPass technology and some 341,000 merchant location equipped to accept them. In addition to paying for goods and services with the tap of a phone, Google Wallet users will be able to redeem electronic coupons.

“This is important because Google and its partners are taking the first step in making digital payments on your phone a reality,” said a Subway spokeswoman as reported by internetretailer.com. “We believe Google Wallet will save consumers time and money as they shop and will give merchants like us new ways to forge lasting relationships with customers.”

In order for a consumer to have access to Google Wallet, he or she must carry the Nexus 4G smartphone which is exclusive to Sprint. According to Mark Beccue, a senior analyst specializing in consumer mobility at ABI Research, the number of those phones sold is somewhere between 400,000 and 500,000, reveals internetretailer.com. Google has not yet disclosed the number of Google Wallet accounts that have been activated since its launch. Google Wallet requires that at least one payment method, a credit card, for example, be added into the app from which funds can be drawn. Then, at any point of sale set up with PayPass hardware, the consumer can simply tap their Nexus 4G to complete the transaction.

Merchant participation is essential to the ultimate success of the mobile device payment industry. There are about 6 million U.S. locations set up to accept payment by a conventional credit or debit card with the magnetic swipe fee on the back. Converting to a NFC-compatible payment reader will cost a merchant between $400 and $500, according to internetretailer.com.

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