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August 9th, 2011 
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Pago Mobile, a new mobile payments solution, has launched right in Google’s hometown, as the field of competitors grows a little more crowded.
The new mobile payments services, also based in Mountain View, Calif., enables customers to pay for goods and services at brick-and-mortar establishments using an app on their phone. Fifty-three local merchants are participating in Pago’s service, secured with the help of Mountain View’s chamber of commerce.
Consumers use Pago’s mobile app to place orders and pay, while merchants use an iPad to track incoming orders, redeem coupon services like Groupon, accept payments and track and reward customers through integrated loyalty programs.
Pago combines elements of other e-wallet services like Google Wallet and payment devices like Square, and also brings together loyalty programs and coupon services at businesses’ point-of-sale. Pago may streamline financial transactions and integrate them easily with loyalty programs, but still must get customers to sign up for and download the app.
It goes up against a burgeoning group of competing services in the rapidly growing mobile payments field, ranging from Google Wallet, to services like the Serve platform for Sprint and Verizon customers, to a comprehensive NFC-based solution by a consortium of mobile carriers and credit cards called Isis.
The growing number of services offer a range of ideas and solutions to how customers may pay with smartphones, but none have picked up steam with consumers yet, indicating the field is wide open.
“This is the hottest space, but I’ll tell you what: There’s a lot of players, and yet, no one has figured it out,” said Leo Rocco, Pago founder, who previously worked at IBM. “There’s a battle of ideas from Visa, MasterCard, American Express, PayPal and Google on how do you make payments on the phone ubiquitous.”
The battle may be leading to a wide set of ideas, apps and services, but the resulting balkanization may bewilder consumers. A widely adopted mobile payments solution that earns the trust of consumers will likely require a large degree of coordination between a highly varied set of parties: phone makers, mobile carriers, financial institutions and merchants.
Rocco said the inspiration for Pago came at a baseball game in San Francisco’s AT&T Park, where he went to watch Barry Bonds break the home run record. But Rocco missed the historic moment because he was standing in line at the concession stand of the ballpark, waiting to pay for his food.
Merchants participating in the Pago launch received a limited introductory offer as well as a subsidized iPad, but Pago will eventually take five percent of all transactions, which is about double the normal transaction rate. This may also slow adoption on the merchant end, but Rocco says merchant access to data and the ability to communicate directly to customers through the app to tailor coupons and deals may compensate.
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