Commitment to Near Field Communications (NFC)-based mobile payment systems has never been stronger from issuing banks, credit card providers, merchants and smartphone makers, but some industry experts predict that widespread consumer adoption of mobile wallets could take years.
A panel of mobile commerce industry leaders at the MobileCon mobile IT conference in San Diego last Thursday discussed the state of mobile payments and the challenges it faces in terms of adoption. Although the panelists were divided about exactly how long it would take before mobile payments become pervasive, they predicted consumers’ lukewarm reception of NFC-ready smart phones as a payment option will hamper rapid adoption.
Dekkers Davidson, the head of mobile commerce for Barclaycard US who sat on the panel, told conference attendees that it would be five to eight years before even a quarter of Americans make using mobile wallets a mainstream reality. Davidson agreed with other panelists who said part of the reason for slow adoption is because many consumers aren’t ready to move away from using credit cards.
Consumer demand for mobile commerce just isn’t there, explained panelist Ryan Hughes, chief marketing officer for ISIS, a joint venture between AT&T, T-Mobile USA and Verizon Wireless in the mobile payment space. ISIS is now deploying NFC payment terminals and related technology for use with NFC phones in Austin and Salt Lake City.
Companies that build mobile wallet systems shouldn’t automatically assume that consumers will embrace the concept of paying with a smartphone, added Mike Love, the chief technology officer for Mozido, which builds white-label mobile wallet systems for banks and other businesses.
In the next five years, insiders expect a majority of brick-and-mortar retail transactions to take place on mobile devices. Panelist Tayloe Stansbury, chief technology officer for Intuit, says small firms need to invest mobile payment technology to stay ahead of that trend. He points out that currently 55 percent of small merchants aren’t enabled to accept credit card or e-card payments.
Dodd Roberts, a representative for Merchant Customer Exchange (MCX) of major national retailers, added that consumers simply may not realize they could be better off by engaging in mobile commerce. To support his point, Roberts recalled that Henry Ford believed Americans didn’t know they wanted an automobile before it was introduced, and when asked what they wanted would have replied: a faster horse.
Davidson doubts the slow movement toward widespread adoption of mobile wallet technology will change, unless big mobile commerce players such as Google or ISIS do something significant to quicken the pace. Otherwise, he says, it will a very long time before there is a clear winner in mobile commerce.