Mobile Wallets Need More Than a Payment Button
Mobile wallets command serious buzz in the payment and retail worlds, but at the All Payments Expo Tuesday in New Orleans, experts pointed out that the technology has yet to gain global traction and consumers will need more from such programs than the ability to make purchases.
The promise of linking payment card accounts to mobile device apps, enabling contactless purchases, bill payments, money transfers and other tasks, seems bright enough. George Garrick, CEO of Mobeam, a company that enables phones to redeem coupons, gift cards and other media using barcodes, said he cannot get his teenaged kids to pay with credit cards. “They want to pay everything by phone,” he said. Still, of the more than four dozen adult attendees listening to the panel discussion, only about 10 raised their hands when asked if they used mobile wallets on a daily basis.
Part of the problem stems from the lack of a uniform definition of mobile wallets. Garrick said to be considered a true mobile wallet, a smartphone must hold more than payment card information but also gift and loyalty cards, tickets, coupons and nearly anything else that now finds residence in consumers’ wallets and purses.
To get to that point will require significant technology advances. For instance, consumers will desire a uniform checkout experience via their mobile wallets, said Serge Elkiner, CEO of YellowPepper, a mobile payments service that focuses on Latin America. That would save consumers from, say, having three different checkout experiences from three different merchants.
But payment stands as the least important feature for mobile wallets, panelists said. That’s because consumers comfortable with their payment cards need a good reason to switch their transactions to mobile. Mobile wallets will have to enable consumers to receive offers based on their shopping and other habits, for example, said Mark Williams, senior vice president, loyalty and financial services, for Best Buy. “The fact that there is a payment button on there is convenient but it’s the least important factor,” he said.
David Luther, executive vice president and chief business offer for mobile payments platform Mozido, agreed with Williams. “It’s naïve to think people will shift (to mobile wallets) when they don’t see any value,” he said.
That value likely depends on geography, as mobile wallets are more of a local phenomenon than a unified global force. For instance, in countries such as Kenya and India, consumers with mobile wallets are more likely to use those apps to send P2P payments to relatives living far away than are consumers in the U.S.—even though young consumers in the West have shown an increasing enthusiasm for paying bills and reimbursing friends via mobile devices. That added value also might include gift cardsMobeam’s Garrick noted that consumers can buy gift cards from Blackhawk Network via the Samsung Pay app, which enables shoppers to store and use those cards via the mobile wallet.
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