The AFP Exchange Magazine that landed in my mailbox today contains an article about cash management in 2009 and 2010, which is based on interviews with six corporate treasurers. Not surprisingly, the conversations with this group align completely with the research we did earlier this year - counterparty risk overshadows all other concerns, cash forecasting must be improved, banking relationships will change as rates rise and FDIC coverage changes, and the need for efficiency is greater than ever as expectations of treasurers and their staff increase. Looking forward to 2010, this group plans to rationalize banking relationships, continue to focus on safety and soundness, and invest in technology to improve efficiency.

In the last two months, we have had three announcements of add-ons for smartphones that will allow users to read the magnetic stripe on a payment card, in effect turning the devices into wireless payment terminals.

On December 1, 2009, Twitter founder Jack Dorsey announced a private beta for Square, Inc. through his Twitter account and a few technology blogs, including TechCrunch and the Los Angeles Times.  Unusually, there has been no press release or mainstream press coverage.

On December 8, 2009, probably in response to the Square announcement, Verifone rushed out a press release announcing its own iPhone add-on, called PAYware Mobile.  Verifone is the largest seller of payment terminals in the U.S. (and #2 worldwide), and will be partnering with First Data, one of the two top merchant processors in the U.S. (the other is Chase Paymentech).

On January 20, 2010, Digital Transaction News covered an announcement by Apriva of AprivaPay which comes in both download-only and Bluetooth-enabled hardware versions.

Three announcements in two months equals a trend, but how significant will it really be?  While the technology definitely has its uses, I believe its ultimate impact will be limited for the following reasons:

There was a major article in the New York Times today - "How Visa, Using Card Fees, Dominates a Market" - about the controversy over the interchange fees merchants pay, which included some interesting historical context and provoked a lively debate in the comments area.  I posted a comment of my own (#246), which is reproduced below, for those of you who don't have time to sift through all the entries:

Dave Potterton and I attended Oracle's Open World event last week in San Francisco for the first time - and quite an event it is. With 10s of thousands of attendees (estimates place attendance at 43,000), it is impressive in scale alone. The largest conference for financial services that we can compare this to is Sibos, attracting between 6,000 and 10,000 attendees. Let me tell you, there is a big difference between 10,000 and 40,000 - especially when queuing up for lunch! But, the surprise here is that Open World's lunch logistics are far superior to Sibos - the food quality is better at Sibos - but when they run out and/or you have to wait 30 minutes for service, it's just not worth it.