Clinkle Entering A mobile Wallet Bubble or Bursting Through?

Mobile payments are nothing new – it seems everyone is trying to get into the game from PayPal to credit card companies and of course Google. Can any company be far behind the move from messy, dirty physical money to electronic currency?

It seems inevitable that the move will happen – the questions worth asking are, how long with the transition take and exactly how do we hide electronic money under our mattresses after the next financial crisis? I leave the latter question to Silicon Valley entrepreneurs to figure out but it seems Clinkle wants to be the company that helps bring mobile payments really mainstream.

Over a dozen students have left Stanford to start the company and many of them have been working on it part-time as they went to school for the last few years. The company recently raised $25M and they have a unique technology which uses high frequency sounds from mobile devices to facilitate financial transactions. There is no word as to whether the tech is dog-safe but questions remain as to how you get retailers to accept Clinkle as easily as they accept Visa. For Heaven sakes, I still can’t get all the merchants I buy from to accept American Express – who knows how long it will take them to embrace the mobile wallet.

Then again AMEX takes a nice cut of transactions while Clinkle takes nothing – for now anyway. The company has an app which takes your money and converts it to Clinkle money which can be used to make purchases.

Taking a page out of the Facebook playbook they are starting at colleges and taking a page out of the dotcom bubble playbook they are offering cash and prizes as part of a raffle to those people who sign up.

The interesting thing here is lots of celebs have joined in on the funding round which may mean they have a vested interest in its success which in turn may mean they will give some free publicity to the sort-of new start-up.

So what does this remind me of? When Ooma the free VoIP device/service launched some years back Ashton Kutcher was a backer and public supporter of the company. The challenge was the Ooma model back then was to share PSTN connections between devices, in-effect launching a free p2p telco. The challenge with the idea was that these calls being sent from Ooma devices in homes could be eavesdropped on – although the company denied the claim.

Turns out the blogging community got it right and Ooma changed its model and Ashton seems to be unconnected to the company at this time.

This gets me thinking about this “wireless transfer method” using high frequency sounds. Even if it is secure it sounds amateurish. Will it get hacked? Will competitors use this knowledge against the company in ads? Will anyone care?

We’ll see.

What we know for sure is mobile banking is huge in places like Africa and it is a matter of time before someone cracks the mobile banking and payments code in the US.

African telcos are very successfully acting as banks but it seems telcos elsewhere will not be joining the banking party anytime soon.

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