Are Mobile Payments All Talk?
Come together … several years from now?
The reports of mobile payments taking off in the U.S. have been greatly exaggerated, according to a Mobile World Congress dispatch published by The New York Times Wednesday. If the giant mobile fair is any indicator of what’s to come in mobile payments over the next 12 months, it may not be so much.
Jenna Wortham of The Times writes:
“But this year, the [mobile payments] momentum seems to have slowed. In fact, it seems to have stalled.
What little news there is around mobile payments seems incremental at best. For example, Visa and Samsung phone owners who also happen to be at the 2012 Olympics pay for items there with their phones.
And what advances there are seem to be largely happening outside the United States. Intel, along with Vodafone, a wireless carrier based in Britain, announced plans to work with Visa on a mobile payments service for Vodafone customers.”
The need for nontraditional collaborations to take place among payment players, i.e. carriers and banks, is one of the major hurdles curbing mobile payments ubiquitously taking off in the U.S., identifies the news reporter.
We wholeheartedly agree.
Though we, like others, believe smartphone payments will take off in the U.S. – that fate still seems years off. In fact, a new report published Wednesday by Radius Global Market Research found that the majority of Americans still prefer leather wallets to electronic ones. Why the reluctance from consumers? Security concerns. Though that’s no surprise, what struck me from the marketing firm’s findings is that Americans are shy to embrace digital wallets because of the fragmented nature of mobile payment service delivery. Consumers seem to be nervous about the nontraditional partnerships.
“Consumers appear to be very aware of the entire delivery chain associated with mobile payments,” said Chip Lister, managing director of Radius in a statement. “The company you keep will be extremely important in marketing efforts. Individual brand reputations of retailers, device makers, software developers, service providers and financial institutions will be scrutinized. In consumers’ minds the complete transaction is only as strong as the weakest link, especially as it relates to security.”
