The concept of mobile wallets has yet to take off in the U.S. and Europe as quickly as in some other markets.
Despite forecasts that by now, many consumers would be using their smartphones as wallets, the concept has yet to take off in the U.S. and Europe as quickly as in some other markets. North American consumers especially have yet to adopt the idea in significant numbers, whether it’s because Apple has yet to include wallet-enabling NFC chips in its phones, because transactions still entail multiple steps in some cases or simply because they’re happy with analog wallets.
That hasn’t stopped companies from continuing to bet on the technology. AngelList, an online platform for entrepreneurs and investors, lists nearly 700 mobile payment startups seeking funding. But the catch-22 remains, as Square Wallet developer David Byttow noted in The New York Times last month: More consumers are likely to use a service if it’s widely available, but retailers aren’t willing to install the technology unless they’re assured that many customers will use it. Square finally killed its Wallet earlier this month.
There are signs that consumers are curious about the technology: Isis, the mobile wallet app backed by three of the big-four U.S. telecoms, says it averaged 20,000 new enrollments per day in April. But consumers will clearly need more incentive to use mobile wallets over traditional payment systems. Jamba Juice, for instance, last year offered Isis users a free smoothie for using the payment system, and PayPal has been working hard to help store associates enable more mobile wallet transactions. American Express has also offered discounts and cash back to people who used their accounts loaded on Isis.
Which brings us to Apple. CEO Tim Cook has called mobile payments “an interesting idea,” noting the company already has 800 million credit card accounts on file through iTunes—enough scale to encourage retailers to invest in the technology—and fraud protection services through its TouchID fingerprint identification system. Couple those with Apple’s iBeacon system, which enables retailers to pinpoint consumers’ locations for deals and possible transactions, and many are speculating the next iPhone will embed wallet technology.
“I realize that there are some companies playing in it, but you still have a wallet in your back pocket and I do, too, which probably means it hasn’t been figured out just yet,” Cook told The Wall Street Journal recently—which only fueled the flames of speculation.
Image credit: Business Wire