Slideshow App Store Turns 5: A Look at Payments Apps' Bumpy Evolution

Published
  • July 09 2013, 4:04pm EDT
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(Image: Bloomberg News)

PayPal, Past and Present

The text-based mobile payment system PayPal introduced in 2006 "wasn't meaty enough for consumers to use," the company said years later. Its iPhone app, which launched when the app store did, saw faster adoption. (Image: Bloomberg News)

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Getting Bumped

PayPal's app had a few bumps along the way, including its use of software from Bump Technologies to move money by tapping phones together. This feature, launched in 2010, was dropped two years later. Bump launched its own app shortly thereafter. (Image: ThinkStock)

Testing, Testing

After a two-year test of Obopay's mobile person-to-person payment system, Citi decided to drop the technology in 2010. "The market just isn't ready for it yet," an executive said. Both companies predicted mobile money transfers would be more palatable if integrated with a mobile banking app rather than offered as a standalone product, and Citi has since integrated Fiserv's Popmoney. (Image: ThinkStock)

Starbucks Gets Savvy

Starbucks' first attempt at mobile payments was a standalone Starbucks Card app that displayed a bar code to scan at the point of sale. The company was fast to adapt its offering, eventually integrating it with the full-featured Starbucks app, which is used for 10% of the company's U.S. sales today. (Image: Starbucks)

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Square Takes Shape

Even as most Square users had to wait for the company's mobile card reader to arrive by mail, they could sign up right away from the app store and start taking payments by keying in card numbers. Square's inventive approach inspired countless rivals that sought to compete on price and features. Pictured: Square CEO Jack Dorsey (Image: Bloomberg News)

A Smurf's Tale

Tiny Smurfs exposed a big problem in Apple's in-app payment policies: because users did not have to type a password every time they made a purchase, parents were shocked to find their kids buying virtual "Smurfberries" at up to $99.99 a barrel inside Capcom's Smurfs game. The issue force Apple and Capcom to change their payments policies.

Passbook Premieres

With last year's introduction of Passbook, Apple attempted to make sense of the growing madness in mobile payments by creating a wallet that stores other mobile wallets. (Image: Bloomberg News)

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Gift Idea

Dunkin Donuts, Pinkberry and others added digital gift cards to their mobile apps, but for Square it was a short-lived concept. Square's digital gift card offering, launched in December and integrated with Passbook, was phased out half a year later.

Cutting Out Credit Cards

LevelUp's app pulled the ultimate coup — it got a customer, Rosie's Café, to stop taking credit cards, instead using the LevelUp mobile wallet at the point of sale. In February, several other customers went on a one-day "credit card diet," refusing credit cards and enrolling more patrons with LevelUp.

NFC a No-Show

Apple's stubborn refusal to build an iPhone with a Near Field Communication chip has forced payments companies to consider other technology for mobile payments. Starbucks, LevelUp and others use bar codes, whereas Square and PayPal use the cloud. (Image: ThinkStock)

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Bigger Territory

The 2010 launch of the iPad created a bigger market for mobile payments. Companies such as Square, ShopKeep POS and Groupon offer technology that transforms Apple's tablet into a permanent point of sale terminal. (Image: Groupon)

Stormy Times

Payment apps proved a boon and a burden after a natural disaster. Square's app helped some businesses stay open after Superstorm Sandy destroyed their landlines. ATM apps didn't quite adapt — some listed ATMs in as active long after the storm wiped them out. (Image: ShutterStock)

Twitter

Social media sites like Twitter thrive through the use of their apps, and companies such as American Express and Chirpify have sought to turn mobile microblogging into mobile payments.

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Beyond the iPhone

Apple's app store inspired rival stores on Android, BlackBerry and other devices. These stores have their own mobile payment systems, including Google Wallet and Isis, that aren't available on the iPhone. (Image: Isis)

What's Next?

Apple's next move in mobile payments will be the iCloud Keychain, a system for storing users' credit card details for access across Apple devices. Passbook will get the ability to scan bar codes, and of course the notoriously secretive company may have even more up its sleeve. (Image: Bloomberg News)