In the last several months, there has been a significant amount of talk about the inevitability of mobile wallet adoption among consumers, but experts say that banks may want to speed up the process, and will need to provide incentives to do so.
Late last year, Google unveiled its mobile purchasing platform, Wallet, to a considerable amount of fanfare, and perhaps with good reason, according to a report from Bank Systems and Technology. The Web giant's offering was the first major mobile wallet system to be launched in the U.S., and came with agreements with some of the world's largest payment processors, including Visa, MasterCard, American Express and Discover.
And soon, Google Wallet will face competition from the joint initiative known as Isis, a mobile partnership between cellphone service providers AT&T, T-Mobile and Verizon, the report said. For its part, that payment platform has already worked out deals with Chase, Capital One Financial and Barclaycard, and seems poised to at least pose a threat to Google Wallet.
However, experts have also expressed concern about whether the inevitable adoption of mobile wallets so many have spoken about will actually be coming any time soon, the report said. This type of technology has been available in major Asian countries like South Korea and Japan for nearly a decade, and it took a considerable amount of time for any one mobile wallet program - in this case, Tokyo-based DoCoMo - to be adopted on a widespread basis. Currently, the service has more than 59 million customers in Japan, but has been available since 2003. In many of the other countries around the world where this type of service has been introduced, adoption has been slow, and typically is viewed as a novelty rather than a viable payment option.
Some experts in the field believe the reason for this is that consumers have no real reason to make such a switch, the report said. If the way in which they've always made credit and debit card purchases has never proved problematic in the past, what reason would anyone have for switching?
"Our system is not broken," Kumail Tyebjee, senior principal of the mobility and digital practice at Infosys, told the news site. "It works really well. I can take out a card, swipe it and in an instant can transmit funds to a merchant."
For this reason, companies developing and pushing mobile wallet systems will have to be more conscientious in incentivizing the use of these programs and highlighting why they should be preferable to traditional cards. Some may choose to partner with event ticket issuers so that consumers can use their phones to get into concerts and sports games, and others may choose to showcase the security features mobile provides that traditional cards do not.
Nonetheless, analysts predict that when adoption comes, it will come quickly, and the mobile payment industry could be worth tens of millions of dollars or more annually by 2015.
