GigaOM Pro

The New York Times’ Bits offers an interesting story this morning about GoPago’s effort to entice businesses to use its mobile payments system. The San Francisco-based startup offers merchants a free package including an Android tablet, Verizon web connection, cash box, receipt printer, app and support; vendors are then charged 2.85 percent per transaction. That model seems reasonable enough, but it overlooks one paramount factor: Consumers must use GoPago’s mobile app to make it work. So GoPago not only will have to offer consumers reasons (such as discounts or freebies) to actually use it. Oh, and it must somehow find a way to let consumers know who they are and what they do. Those hurdles are enormous, which is why I don’t expect any small player to compete with the Googles and the PayPals of the world.