Wireless Money and Mobile Payments

With Google Glass just around the corner, wi-fi connectivity practically everywhere, 4G mobile connections and voice powered semantic search, you’d think that having to take out crumpled pieces of paper from our pockets to make a payment would be a thing of the past.

Not quite so apparently. Consumers are not ready to bite the cashless society apple just yet and the reasons behind their reticence have more to do with behavior than technology. Tech is ‘cool’ not just because it does things differently or allows us to do something extra but because it makes life easier. This is a success-defining point. Tech that simply is, may get some traction because of novelty but it’s soon dropped the moment the shine wears off it. Tech that makes things easier however becomes embedded in our lives without us ever noticing it (search is a case in point).

We already use our phones to take photographs, send emails, text each other, read faxes, scan barcodes, make purchases (using credit cards), play music and watch videos so why can’t we make that small leap of faith required to get rid of clunky wallets and plastic credit cards and simply use our phones to pay?

Mobile Payments Require A Lot of Alignment

The answer lies in alignment. In order for you to take out your phone, touch an NFC reader and make a payment at the checkout of your local supermarket here’s what has to happen first:

  • The phone needs to be equipped with NFC hardware.
  • The phone needs to be equipped with NFC software.
  • The store needs to have the proper equipment and training in place.
  • The phone company needs to support this kind of transaction.
  • Banks and payment processors need to be in on it.
  • Credit card companies need to be in on it.

And in order for this kind of cashless transaction to become the norm, the above alignment must be widespread enough to actually make sense for us to leave our wallets filled with coins and notes, behind.

Right now, this does not happen. The alignment is not quite there yet. The few points that do support NFC payments are exceptions rather than the rule and the entire process of setting your phone up for it is cumbersome enough to hardly make it worthwhile bothering.

Google Wallet with its predication on the Google Account and Android-based security makes more sense here but for that to happen the last four steps in the list above still need to be in place, everywhere. They are not.

The current issues surrounding the difficulties mobile payments are experiencing serve to create the formula for success:

Prevalence + Convenience = Success

The moment mobile payments are as easy as texting and as ubiquitous as coffee outlets we will see a marked shift in consumer uptake.

PayPal, who can see their hold on online payments slip if Google Wallet takes off in a big way have taken a different approach to this using elements consumers are already familiar with: apps and personalization. Downloading PayPal’s app will, in time, allow you to order and pay for your latte before you even arrive. The approach allows the barista not just to prepare your coffee for you as you arrive but also know who you are and greet you by name, creating a more personal connection.

Will it work? The convenience element is certainly addressed in the approach. Prevalence is something else entirely. Right now the mobile payments market is up for grabs.

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