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Tech

Toronto-based company takes next step in mobile payment revolution

Posted by Erin Bury / March 5, 2010

Zoompass tagThere's nothing worse than waiting in a giant lineup at the grocery store only to realize you've forgotten your wallet at home, or finding that you don't have enough change after you've ordered your coffee (I always do this at Tim Hortons and have to dash to the ATM across the street). Ever wish you could just pay for something with the snap of your fingers? Well, how about the tap of your mobile phone? That's now a reality due to new technology introduced this week from the Toronto-based startup, Zoompass.

In December I profiled the Top 10 Web Startups of 2009 -- and among that list of rising stars was Zoompass, a new mobile payments service by local company Enstream. Last year Zoompass made quite the mark on the local community -- VP Strategic Partnerships Aran Hamilton attended and presented at events, they built the company's online brand through social media initiatives like Twitter contests that "Zoomed" money to Torontonians; and they were a finalist for the Promising New Company of the Year award at the Canadian New Media Awards.

If this week is any indication, then 2010 may prove to be an even bigger year. This week Zoompass introduced the first public Canadian trial of a wireless payment sticker, called the Zoompass Tag. Instead of using a debit card (so 2005) or cash (so 1950) to pay, the Tag allows consumers to tap their phones on PayPass readers at the checkout, and the money is taken directly out of their Zoompass accounts.

A Zoompass account is similar to a prepaid Mastercard -- the account has to have money in it in order for the Tag to work (so you're still out of luck if you run out of money before your next paycheque).

Since I tend to leave my gadgets laying around at conferences and events, I immediately worried about what would happen if someone swiped my iPhone with the Tag stuck on the back. Would I not only be disconnected from the world, but also unable to buy a coffee to console myself? Would my financial data be safe?

Toronto blogger and Thornley Fallis Account Director Dave Fleet said consumers need not worry. He told me that even if someone took your Tag they wouldn't have access to your financial data. And if they do go on a mobile payment shopping spree, the account holder would be protected by Mastercard's Zero Liability protection plan.

But if you have visions of buying this Saturday morning's cappucino with a sticker on your iPhone, you'll have to get in line. Currently the Zoompass Tag trial is limited to 200 selected Zoompass customers across Canada, and the success of the trial run will ultimately determine whether or not Torontonians and everyone else across Canada will have access to the technology.

I tried to find someone who is demoing the Tag to let me in in their experiences, but alas no one returned my Tweet. They must have been out shopping at one of the 9,000 PayPass-supported retailers across Canada. I do, however, have this video that takes you through the Tag experience:

It seems that this Tag is just another entry into the mobile payments space. Square is the most recent company to emerge, with powerhouse Jack Dorsey of Twitter fame behind it. My guess is that regardless of how the Zoompass Tag fares, this is the first of many applications we'll see trying to control our wallets -- and our phones.

Discussion

28 Comments

Name / March 5, 2010 at 10:06 am
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...you drink Tim Horton's coffee? Why?
Bartek / March 5, 2010 at 10:23 am
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Is that a sticker that goes on your phone? I want my pretty iPhone to not have residue ;-)

More importantly, I'm curious if we may see it fall/peel off. On the other hand, our only options coming out soon are little dongles (See: Squareup.com)

Looking forward to seeing this "Japan has had this for 10 years already" technology finally coming to Canada though!
Alison / March 5, 2010 at 10:30 am
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Anyone else remember that commercial from a few years ago where a dude's in a grocery store or something and he's putting stuff into his pockets etc and it looks like he's stealing, then as he walks out, his receipt prints. It was like everything had RFID tags and it auto-scanned everything when he walked out, and auto-charged his account. No lines, just walk out. I want that! But this is a step in the right direction at least!
Nick / March 5, 2010 at 10:33 am
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What an ugly, oversized sticker. Phones are fashion statements and people will not want / use it. It will need to be built into the phone.
Tanya / March 5, 2010 at 10:34 am
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Alison! Yes! That commercial was amazing! I want that too.
Jacqueline / March 5, 2010 at 10:37 am
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I don't see how this is really mobile phone payment since it's something you need to physically stick to your phone. It should be a program on the phone that I can load up and then scan- preferably paying from any of my already existing accounts (like a paypal). Having it behind my locked home screen would also keep it safe from theft. I'll be surprised if this catches on.
Mike I / March 5, 2010 at 10:45 am
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I seem to recall a failed attempt at this technology in Toronto called Dexit (www.dexit.com).

It was pretty much the same thing, except the monies came out of an account you'd have to load. I think it failed because it wasn't national, wasn't sponsored by a major company (like Pay Pass is), and wasn't really advertised very well.

I'm curious if they can make the sticker so small you can stick it on your battery and cover it up with the battery door. The RFID chip on an actual Pay Pass credit card is very small, and there's no technological reason this can't be done very small for such an application...or hey, how about a cellphone manufacturer offering a built in PAN card in the device itself that you provide the information to MasterCharge (or Visa, as their PAN technology is identical to that of MasterCharge).

TheVok / March 5, 2010 at 10:49 am
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My biggest problem with Dexit was it carried fees. It really shouldn't. Look at the Octopus card in Hong Kong; you just load money on it and use that money. It's in every business' interests, in terms of efficiency and operating costs, to support it. It started as a transit card and just grew enormously from there ... mainly because it's so user-friendly.
Jenn / March 5, 2010 at 10:58 am
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I agree that the sticker concept is outdated. It should really be a barcode that shows up on your blackberry that requires a PIN for added security.
Eric S. Smith replying to a comment from Jacqueline / March 5, 2010 at 11:14 am
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I agree -- I don't think that "RFID -- on a sticker!!" is exactly the "next step" in any "mobile payment revolution." Not sure if BlogTO or the Zoompass marketing department is responsible for that hyperbole.

I'll give them one thing, though: this approach is actually more flexible than phone-based payment, because you don't need a particular model of phone, or any phone, to use it. That's how I'd market it, instead of pretending that it's more complicated.
Jaytee / March 5, 2010 at 11:41 am
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If they can get the TTC to adopt it then I guarantee they wont end up like another Dexit. Good luck with that though.
Matt P / March 5, 2010 at 11:51 am
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I lived in Japan and had a cell phone lashed into both a credit card and bank account. You just selected which you wanted to pay from the screen menu and zapped away when done shopping. It worked in everything from 7/11, some department stores and even vending machines. Of course this was 5 years ago...and we still aren't even close to catching up. Indecently the phone was free and came with a 6 pac of beer that was the promo at the time. Maybe only the iphone beats what I got for free and a case of beer all that time ago.
dumb / March 5, 2010 at 12:27 pm
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why not just make it into a keychain
aaron / March 5, 2010 at 12:30 pm
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any reason it has to be stuck to a phone? could i not just stick it to my keychain? or my butt? that would be some entertaining swiping.
Adam / March 5, 2010 at 12:31 pm
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What a cloogey, inelegant and unattractive solution. Who wants some tacky, logo-ridden sticker on their phone?
chris / March 5, 2010 at 12:38 pm
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they have done this in Korea for ages...it isn't just for credit cards...you can reload at cash machines you don't need your debit card just your phone
Ummmm / March 5, 2010 at 01:15 pm
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This is hardly revolutionary at all. Toronto is slowly catching up to the rest of the world.

Like many of the above comments, an RFID on a sticker is actually taking a giant leap back.
joe / March 5, 2010 at 03:41 pm
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TTC! TTC! TTC!

Let this company outfit buses, streetcars, and stations.

The TTC wants to spend millions and millions of dollars developing "smartcard" technology... but why bother when it has already been developed?

N / March 5, 2010 at 05:03 pm
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Well, my credit card works fine as it is. I don't see why we need to fix something that isn't broken. sure, japan, korea... have had these ages ago, but i think it is not a priority. If a lot of people want to use it, they will introduce it and make money. If not, then it was not a good idea. I really don't see a point with this one (or the dexit) - i get points for using my credit card, get interest-free money for about 30 days and it is free to use it. For this you have to have money in their account collecting dust.
john / March 5, 2010 at 05:14 pm
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This will never take off so long as it is proprietary -- in this case mastercard.. are people going to have multiple stickers on their phones as different merchants go with PayPass (mastercard) or PayWave (visa).. it will only succeed if it is tied into the TTC system under the non-profit rubric of Interac, much like the Oyster card in London or the Octopus card in HK or Suica in Japan, or any others around the world...

Interac has been a boon to Canadians and merchants alike, and the govt is foolish to allow Visa and Mastercard into this space -- all it will do is raise prices over the long term.
hd / March 5, 2010 at 06:05 pm
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Can't we just get an app that's linked to credit or debit? No that's better then some sticker, seems dated at launch if you ask me.
jack / March 5, 2010 at 06:15 pm
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yea, it's called octupus card in HK, duh
michelle / March 5, 2010 at 07:25 pm
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another reason to steal an iphone
Ben W Bell / March 5, 2010 at 09:53 pm
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This isn't new, it's been done in Europe for many many years, and in the far east for nearly a decade now. In Japan you use your phone to buy everything from train tickets to vending machine snacks.
matts / March 5, 2010 at 10:20 pm
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Hey, look, over here, over here! I just invented a rotary phone! Oh, wait, this isn't 1800's. It's not 1990's either, so let's move beyond RFID, please and have a true, integrated mobile payment solution.
TheVok / March 8, 2010 at 10:25 am
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I can't believe you said 'solution.'
Matt / March 9, 2010 at 10:16 am
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Check out this Zoompass competitor, it might be better because you can use any credit or debit card and don't need a Zoompass prepaid account.

http://www.idiotbanter.com/2010/03/08/leaked-photos-new-mobile-payment-technology/
Jan Smith / March 14, 2010 at 03:25 am
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This new technology may work well in some countries but I can't see it going too well here in Australia until they revamp our telecommunications.

Right now, Australians who use a mobile (cell) phone have to pay for the call, then the connection, then up to .60C per 30 seconds. This would be far too expensive for people to use here.

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