Did mobile wallets debut too early?

Anna Scantlin
Contributing Editor from Kansas City, MO
Published: May 8, 2013

This is the age where we are constantly finding solutions to problems, and even if there isn’t really a problem in the first place we still try to find some sort of “solution”. When it comes to payment methods, throughout history we’ve gone from using teeth and specialty trading to plastic cards that have an undisclosed amount of money on them – hopefully enough to cover the cost of the purchase. But now, in addition to credit and debit cards, we also have the introduction of mobile wallets.

What exactly are mobile wallets? Well, mobile wallets are actually very broad and a complex system that include several different methods of payment from mobile-to-recipient. You have methods like SMS-based transactional payments, direct mobile billing, mobile web payments, and one of the newest ones that I will be focusing primarily on: contactless NFC. In theory, it sounds like a completely convenient method of paying whether you're physically in the store or shopping online. Essentially it does cut out one more thing we have to remember to carry with us, which is our wallets. But what are the downsides to using a mobile wallet?

The first thing that popped into my mind when I first heard the term "mobile wallet" was that if my phone gets stolen not only does all of my photos and music get stolen but so does access to all of my money. This is also a risk with mobile banking (which I do use to keep track of money on my phone) but instead of all of my accounts having different passwords to figure out through different apps, it’s all under one convenient location with only one password to crack. Not only that, but mobile wallets using NFC depend on wireless interaction while debit and credit cards require contact with the magnetic strip to register – which do people trust more?

However, in my mind security isn’t the biggest problem. While security is important, you can’t make any payment method 100% foolproof from theft; at least in this point in time. The biggest issue seems to come from availability to actually use the method for its intended purpose – or lack thereof.

I was first introduced to the concept of near field communication while working at Sprint. Google Wallet was just rolling out through the Nexus line of devices (which comes as no surprise) and we were learning about just how NFC worked with Google Wallet. The problem was, and the problem that I knew would come into play when trying to use it as a “push” for sales, was that we had no way of showing the customers in store just how it worked. Our machines did not support NFC. By not having the feature available in our own store it really didn’t seem to make any sense to try and explain that concept to a customer. I always had more success with sales when incorporating visual learning – there is a point in time where if you talk too much it goes in one ear and out the other. Without a visual concept, you’re most likely just confusing/and or boring the customer.

Since that introduction I have not been in one retail situation where I have seen somebody pay using their phone with NFC. It seems like the concept was introduced before it was needed – a product before its time, if you will. People still seem completely content with paying via credit/debit card, as it is a simple and easy process, just like NFC payments. Swipe or tap? It’s all the same to me. It’s not like writing a check vs. credit or debit, where you can save upwards of 3-5 minutes of time with each transaction. This would really only save a couple of seconds, if that.

Will mobile wallets ever be popular? I feel like in the future the idea will somehow be reworked or honed upon to be more convenient, or perhaps more secure. It's an interesting idea, I’ll give it that, but it seems to be trying to fix a payment method that isn’t broken. The negatives outweigh the positives in its current state. As a result, people are hesitant to switch.

Readers, what are your feelings on mobile wallets? Do you use one, and has it changed the way you make purchases? I'm interested in hearing your feedback on this, as I’m sure there are plenty of perspectives on it. Let me know your thoughts!

Images via Uncrate, Droid-Life