Bump Pay – Exchange Money with Other iPhone Users

Image via Fast Company

Mobile startup Bump Labs joins the mobile payment arena last Thursday with its Bump Pay. The application basically enables users to exchange money by tapping their phones together. Compared to Near Field Communication used by Google and other mobile payment systems, the startup’s application requires physical contact between two devices.

It was designed based on the company’s core technology, wherein two smartphones using Bump apps can transfer data like contact information and photos by being tapped together. But in this case, the idea came from a “what-if” scenario. Instead of running to the ATM, what if a user can pay his or her friends back wirelessly in case he or she ran out of cash? Bump Co-founder and CEO David Lied shared:

“We’re trying to solve this problem of ‘Oh, I don’t have cash, can I put it on your credit card and pay you back?’ The idea behind this app is to make it as simple as possible to pay your friends back when you split a bill.”

How Bump Pay Works

Users can bring the Bump Pay into play by typing in how much money he or she wants to transfer to another user. He or she will then bump the device with another user’s smartphone. The application will determine which phones collided, and it will transfer the fund from the user’s PayPal account to another.

Simply put, a Bump Pay user must download the app beforehand, and link it to his or her PayPal account. Furthermore, the mobile payment app is only available for iPhone users as of the moment.

Bump Pay: Boon or Bane?

Although Bump Pay’s mobile payment method sounds cools, not everyone is pleased with it. Forrester Research Analyst Denee Carrington pointed out:

“Bump Pay is interesting because of its novelty, which may spur trial, but being within arm’s reach of the person you’re paying back is not always convenient and will limit its usefulness.”

But for Altimeter Group’s Chris Silva, proximity is the right approach in the US:

“People are just so paranoid about using any type of technology where there’s a transaction taking place and you’re not actually exchanging funds or a card. I think it makes sense for what people are going to feel comfortable using.”

In terms of security, Silva added that Bump Pay users could claim if they accidentally tapped another person’s phone. Thus, they could attempt to recover their transferred funds. As Silva added:

“There’s a risk, but it’s almost completely borne by the credit card issuers and the banks who are going to be stuck arbitrating those disputes.”

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