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2 minute read / Oct 15, 2013 /

The Two Characteristics of Seamless Mobile Payment Experiences

Paying for an Uber is a breeze. I step out of the car and go on my way. Behind the scenes, Uber has identified me, recorded my fare, added a gratuity, and sent me a digital receipt that I can easily forward to Expensify.

That’s the way I want all my payments to be.

Paying for Uber with a mobile phone is less work than using a credit card, which is the biggest competitor for share of wallet of in-person payments. As one of my partners likes to say, credit cards are fast, convenient and easy. We’re all pretty quick on the draw for our wallets.

Uber’s payment system works so well because it has two key attributes: high frequency of use and a priori identity verification.

Frequency of use is important because I can justify the friction of entering payment credentials once because I can amortize that cost over many transactions to justify the time savings.

A priori identity/payment verification means that a merchant knows who I am and trusts that I will pay. This is a fraud protection measure. Uber knows who I am and how I’ll pay when I request a cab. The same is true for when I pay a bill at an OpenTable restaurant.

But, Walgreen’s doesn’t yet have the technology to verify my identity in the same way. As a result, I can’t walk in to a Walgreen’s, scan a few items at the self-check out and walk out without being arrested for theft.

It might be a few decade or so before the credit card is a relic, left to collect dust in my back pocket or desk drawer. But in cases like Uber, that I use often and with whom I share my identity, the credit card has already been relegated to an afterthought.

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