Competing Innovation in Credit Card Payments?

Two major developments, not surprises mind you, this week pertaining to credit card payments.

First, Square announced Square Register, the next step in their quest to free merchants from expensive POS terminals.

Square’s Disruptive New iPad Payments Service Will Replace Cash Registers

I’m a big fan of Square and its conveniently tiny little doohickey, essentially a portable POS gadget, that allows you to accept credit card payments from your mobile.

Square Register is a further disruption that allows merchants to use their iPads to replace cash registers and surprise, POS terminals, and deepen engagement with their repeat customers.

Then today, Google announced Google Wallet, which uses NFC on your smartphone, or a sticker if you don’t have an NFC-capable device, which applies to pretty much everyone, to facilitate card-less payments at POS terminals.

Coming soon: make your phone your wallet – Official Google Mobile Blog

Google Wallet will also store your loyalty card information, coupons/offers and gift cards, as well as your credit card numbers. All of this is pitched to merchants as a way to deepen customer engagement.

They have to pitch Wallet to merchants because it requires an NFC compatible POS terminal.

So, on one side, Square is encouraging merchants to dump POS terminals, and on the other, Google is encouraging merchants to upgrade POS terminals.

Interestingly, Visa is an investor in and partner of Square. MasterCard is a Wallet partner of Google’s and produces the NFC POS terminals it requires.

Apple is the elephant in the room at this point, and they are rumored to be working on an NFC solution of their own for future iPhones.

Neither of these solutions will make people dump their cards anytime soon, and for the foreseeable future, Square and NFC payment solutions like Wallet will coexist in harmony.

Still, this will be interesting to watch.