The Catch-22 of Making the Mobile Wallet a Reality

Credit cards.jpg

The idea of the mobile wallet is an enticing one. All of my important information can be stored in one place, on a device I already trust? Cool. I can finally get rid of all those pesky physical cards – credit, debit, insurance, loyalty, gift cards (and the list goes on)? Awesome.  I can make all my purchases at all the places I shop with the simple touch of a button or a swipe of my phone? Bliss.

Admittedly, there are some obstacles to this concept – what if my phone runs out of battery? What if someone hacks my account? What if I have bad internet connection in the store where I want to buy these cool vintage shoes?  What if I’m more of a wait-and-see person when it comes to new technology? But even considering these potential issues, consumers are still open to a digital payment infrastructure, as long as it will make their lives easier and more organized.

So if the people want it, and the technology capabilities exist, why are we still carrying around 20 different cards in our very tangible wallets?  This brings us to the biggest barrier to transforming the mobile wallet from a cool idea into a reality: Consumers won’t convert to a digital payment solution unless it’s widely available at the stores they shop, but the stores they shop won’t install the hardware and software necessary until those same consumers are already using, and perhaps demanding, the service.

And that’s just it – people aren’t demanding anything.  Sure, the idea of the mobile wallet is intriguing. But do we as consumers need it? After all, lasting innovation only occurs if real needs are identified and addressed. Is taking out and swiping a credit card so difficult that the masses will cry from the rooftops for a payment revolution?  Here in 2014 there may be some whispers or idle chatter (perhaps a bit louder out of Silicon Valley), but not quite loud enough for meaningful movement in the marketplace.

So it’s up to corporations to decide how and when to implement a wide reaching mobile payment system.  Some companies have already gotten the ball rolling; take the Merchant Customer Exchange (MCX) as an example.  Big boys like Target, 7-11, Southwest, and ExxonMobil (among many others) have come together to develop an app that acts as a “seamlessly integrated mobile-commerce platform” for consumers. The app can have personalized interfaces for each brand, and will be usable for payment by phone at all participating merchants.

MCX is certainly a move in the digital direction, following the footsteps of some similarly integrated services in Asia, like iD.  But will it be enough to reach the tipping point in the US and push the mobile wallet mainstream?  Will smaller and local businesses be able to follow suit? Only time will tell.  So for now, hold off on donating your designer wallets to Good Will or selling them on eBay – you’re gonna need them.

image from Flickr