Since the release of the Google Wallet last week many industry experts and analysts have honed in on the idea that “being Google” is just not enough to make mobile payments become mainstream, but it could get the attention of the mainstream. And we concur.
One of the more recent and compelling stories about the challenges facing Google Wallet focuses on the need to clarify the real benefits to the consumer and the actual costs to the merchant. And we agree. As we’ve stated on numerous occasions, if the value proposition isn’t more than just an alternative way to pay, then what’s going to compel the customer to use it; and as importantly, compel the merchants to upgrade their processing equipment?
Some additional challenges we believe the consumer, merchant and all industry mobile payment players need to address include:
- Universal standards. Merchants will want to integrate ONCE not multiple times to enable NFC enabled technology. It’s a costly and time-consuming process.
- Universal acceptance. Not everyone carries both a Visa and MasterCard and some carry neither. And the market share of smart-phones appears to be evenly split between iPhone, Android and Blackberry eliminating two-thirds of the market potential right off the bat. Multiple platforms will cause confusion and frustration.
- Communicating the value proposition. Retailers and solution providers will need to communicate the value of using NFC and mobile payments as an alternative to cash and credit cards. The consumer should ‘feel no pain’ in trying to use NFC and mobile payments. If consumers believe mobile payments are safe, easy to use and they will receive better pricing then adoption is possible. The right value proposition will be crucial for mass adoption.
- Security. The PCI Council has not yet openly embraced security requirements for mobile payments. Security standards and requirements will need to be established before developers and retailers can fully embrace mobile payments in general and before consumers feel safe from potential hackers.
Overall the mobile payments revolution needs a battle cry and right now, there just doesn’t seem to be one. It solves no immediate problems, it’s not as simple or cost-effective to implement at the merchant level as touted, and there seems to be little to no relevancy for consumers. Targeted couponing, loyalty and pricing discounts need to be compelling enough to make consumers wave or tap a phone instead of swiping a card.
The industry is making incredible gains in advancing the concept and technology behind mobile wallets and mobile payments and just needs to connect the dots to make it compelling for the end-users (consumers and merchants). Our eyes are peeled this summer on all the other alternative mobile payment options.