Why Your Mobile Device Isn't Your Wallet (Yet)
For years now mobile developers have been announcing the "year of the mobile payment" or more accurately the "use your cell phone to pay for stuff" movement. Some retailers have jumped onboard, namely Starbucks with their mobile app, but overall people still aren't using their mobile devices to pay for stuff and I think the reason is two-fold.
First, it has to do with trust. For years consumers were weary of buying anything online. They didn't know who was getting their financial information. Respectable companies like Amazon and Paypal spent years earing the trust of consumers, but there is still so much bad press about leaked financial information that no one is anxious to put their credit card on any device, let alone one that can easily be snatched out of their pocket or left behind after lunch. When the worst that can happen is someone buys a $4.00 Mocha using your phone, that's not a huge deal, but the goal of retailers is for consumers to start buying upscale impulse items, like event tickets or apparel just by pulling out their phone.
The second reason consumers are weary of using mobile devices to buy has to do with reliability. Mobile devices losing connectivity is nothing new, but losing connectivity when you're trying to process a payment, that's a disaster. Imagine if you were buying something significant, like concert tickets at $80 a-piece. What if the transaction was interrupted and you got charged twice, or worse yet, it failed and you lost the tickets altogether. This (rational) fear is keeping mobile payments from going main stream, and the fact that mobile carriers are highlighting their own inefficiency isn't helping. Hey Verizon, guess what? Your attack ads (and at&t's rebuttal ads) have set back mobile payments years, just saying.
Despite these setbacks there are still some promising sectors where mobile payments are seeing increases. Charity has seen an increased use of mobile for donation. After natural disasters, aid organizations have harnessed the power of the text message to capture donations through the simple process of sending a text message, something most mobile users do constantly. This sector has had to respond to the trust issue as well, as some would take advantage of others charity, by setting up bogus entities to receive donations. It's pretty sad really. This article by Econsultancy also talks about how advertisers are using mobile integration effectively to give consumers quick access to small purchase like a TV program, or a pizza right from their phone using technology like QR Codes and Microsoft Tag.
As I see it, mobile devices will be used for financial transactions, it's just a matter of time before consumers reach a level of trust with the brands and the mobile carriers establish their reliability. Until then, I'm excited to explore the waters of mobile transactions by taking advantage of new technologies and see which strikes the right balance between inciting impulsive buying and building an atmosphere of trust and reliability.
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