The growing adoption of mobile payment is driving a new wave of sponsorship activity.

As previously reported in IEG SR, e-commerce services, credit card issuers, telcos and other types of companies are increasingly entering the mobile payment fray, with many using sponsorship to promote their goods and services.

In short, consumers can use the technology to make purchases with cell phones, tablets and other mobile devices. On the flip side, the technology offers merchants a low-cost alternative to point-of-sale terminals and other pricey equipment. 

Most sponsorship activity in the category is focused on music, a platform that draws young, tech-savvy consumers and other early adopters.

Recent deals include PayPal and the Outside Lands Music and Arts Festival in San Francisco; Square and MusicfestNW in Portland, Ore.; and, more recently, Isis and the Nov. 2-4 Fun Fun Fun Fest in Austin, Texas.

And the number of deals should increase as mobile payment grows in popularity.  The transaction value of worldwide mobile payments will surpass $171.5 billion this year, a 61.9 percent increase from 2011, according to Gartner, Inc.

The information technology research and advisory firm expects the number of mobile phone payment users to total 212.2 million this year, up from 160.5 million in 2011. Gartner expects mobile payment users to total 448 million by 2016.

Other players in the category include Google, Inc. (Google Wallet), Intuit Inc. (GoPayment), MasterCard, Inc. (PayPass) and Visa (V.Me),

Case Study: PayPal and Outside Lands
The eBay Inc. subsidiary this year partnered with Outside Lands to accomplish three primary objectives: educate consumers about its payment service, build relations with merchants and enhance the festival experience.

The company activated the tie with an on-site experiential area that offered mobile device recharging stations, a convenience store and other amenities. Consumers that visited the store could use PayPal to make purchases.

PayPal also used the tie to build relations with merchant partners. For example, Jamba Juice Co. sold smoothies and snacks in the branded area.  The retailer this year began accepting PayPal at its brick-and-mortar stores.

Merchants used PayPal Here mobile card readers to accept payment, said Chad Issaq, executive vice president of business development & partnerships with Superfly Marketing Group, the marketing arm of festival owner Superfly Presents.

Attendees that visited the PayPal tent also could enter the Pin it & Win It sweeps that dangled a $500 gift card, branded sunglasses and other prizes. Attendees entered the sweeps by entering a four-digit number onto a PayPal PIN pad.

PayPal also activated the tie with a bracelet promotion that dangled same-day VIP instant upgrade tickets. The upgrades were distributed by a roving team of brand ambassadors who gave the tickets to attendees wearing the bracelets.

PayPal played up the safety of its service with on-site lockers where attendees could store their belongings or purchases. The company charged $5 for a medium locker and $10 for a large locker, with all proceeds donated to charity.

The company touted the sponsorship through a dedicated Web site that offered information on its mobile payment service. Consumers that visited the site also could sign up for PayPal to make purchases at the festival.

PayPal replaced American Express Co., which sponsored the festival last year on behalf of its Serve mobile payment service.