Mobile Wallet’s, where are they?

We are continuing to see new articles and news that we are going to see the disappearance of cash. The indications are this new technology will change the way we manage our money and finances. “Mobile payments and purchasing at the physical point of sale have experienced little adoption in the U.S. marketplace despite abounding innovation in mobile and payments technologies,” according to a report on the mobile-payments industry from Javelin Strategy & Research, a consulting firm in Pleasanton, Calif.

The report also indicates that only 9% of U.S. mobile phone owners have made a purchase with a contactless point-of-sale payment in the last year. In 2012, the mobile retail payment total was 20.7 billion, only $400 million, about 2%, came from POS mobile payment.

When we begin to take a look at why this is so, the research indicates that is because of the following reasons:

Our Phones Aren’t Ready

Phone manufacturers are slow to adopt the NFC technology (Near Field Communications), as only 3% of smartphones in the U.S. have this capability, according to the Wall Street Journal. The most significant challenge, as stated by industry experts, is when Apple introduced its “Passbook”, their own solution, on the iPhone 5.

Other methods have been introduced, like QR codes, to make the transaction happen on the smartphone. But, there remains no significant advantage in these methods to drive significant adoption.
What is the incentive to change?

The CEO of Sunrise Equity Partners thinks “A successful mobile payment solution will then need to add value in order to drive consumer adoption.” The advances of “Digital couponing is also extremely important. Imagine grocery shopping and automatically receiving any available coupons without clipping them or scanning each item as you put it into your cart, receiving an offer for a free trial from a competitor and then being able to pay going through a simplified self-checkout.”

The Retailers Aren’t Ready

Infrastructure of most stores to take mobile payments is limited. The adoption of large retailers could make an impact on the rate of change, but it must happen on a grand scale to gain any momentum.

“If it requires several steps to get to a full-featured platform, there will continue to be slow adoption,” Weinberg said. “Once people get over the cool factor, they will realize that it is still easier to pull out a credit card and swipe. If we still need to carry our physical wallets, most of us will probably revert back to swiping.” Regardless, though, the real challenge for mobile wallets may ultimately be that the current system isn’t half bad.