KUER Local News
3:11 pm
Mon October 1, 2012

UTA Embraces Smartphone Payment Technology

Would you consider using your smartphone to pay for coffee at Starbucks? How about your ride on public transit? Both consumers and stores have been hesitant to jump on board, but a joint venture between cell phone companies could boost the popularity of mobile payments in Salt Lake City. And one of the largest participating organizations is the Utah Transit Authority.

Gerry Carpenter of UTA shows riders the future of public transit. He gets on a bus, whips out a smartphone with something called Google Wallet downloaded onto it and before he finishes talking he’s already paid for his ride.

“So I’m just entering the PIN number. The payment is activated. And then you tap it to the device,” says Carpenter.

The devices that you ‘tap on and tap off’ with your electronic pass, they’ve been equipped to handle smartphone payments all this time.

But the transit agency hasn’t publicized it because only certain Smartphone models come equipped to do this. And they haven’t saturated the market yet, nor have contactless credit cards which all use the same technology.

“Right now only one percent of all of the riders actually pay for their trip using a contactless credit or debit card and an even fewer number are using mobile devices,” says Carpenter.

Some consumers had anticipated the iPhone5 would be equipped to handle mobile payments, but it’s not. But the Samsung Galaxy SIII has the special chip and can run the app using Sprint or Virgin Mobile.

More compatible models will be coming out on the market before the end of this year, says Al Chan, a former director of emerging technologies at Visa and a former program manager for Motorola.

“Technology has matured where it can now be incorporated into these mobile Smartphones and released into the mass market,” says Chan.

One of the challenges facing digital wallet manufacturers is getting consumers in the habit of paying with your smartphone. The Google Wallet app dominates this small but growing the market, and is accepted on UTA buses and train stations. But a new competitor made up of AT&T, T-Mobile and Verizon Wireless is coming. Officials from the joint venture would not confirm when the wallet would be available. It was originally scheduled to launch in Salt Lake City this past summer.

Chan says the challenge with these competing wallets is getting the merchants to accept them as a form of payment.

“When you walk into the store sometimes you see the Visa mark, the American Express mark (pasted on the window meaning they accept that brand of credit card. Wallets are the same concept... The stores are going to have to sign up to accept these wallets, in order for any particular wallets to gain momentum in the market,” says Chan.

One business that has agreed to accept ISIS as a form of payment is the Utah Transit Authority. But today it’s still unusual to find a rider paying with a Smartphone.

Patricia Diaz is a senior at the University of Utah who takes public transit daily. She’s says she wouldn’t mind switching over.

“I think it would be easy to convert. With now I just use my card, so it wouldn’t matter because I always have my phone with me,” says Diaz.

And if you’re one of those customers who think it’s easier to pay with a tap of your phone than to swipe a credit card, you’ll probably be adopting this technology sometime soon.