SAN FRANCISCO – While millions of Americans use smartphones to perform common tasks like hailing a taxi or checking in for a flight, they have not embraced phones as a payment tool, the New York Times reports.
“For years now, the promise of a so-called mobile wallet … has led to a host of American start-ups trying to cash in … Those companies, though, have faced nearly as many hurdles as they have competitors, including the most basic ones: Many people are not aware of the new payment systems, others are confused by the many choices, and some see no benefit in the mobile option over using cash or credit cards,” writes Brian X. Chen in a recent article.
As a result, payment companies have been scrambling to find a profitable business model, while the feeling grows that mobile payments will not replace traditional wallets any time soon.
“[Mobile payment] was never going to be a revolution,” said Denée Carrington, a Forrester analyst who studies the mobile payments market. “It’s definitely more of an evolution.”
Despite the lag of consumer adoption, there are no shortage of ways to pay via smartphone, such as apps or mobile payment options by larger brands such as Google Wallet.
The research firm Gartner estimates that consumers spent $235.4 billion worldwide through mobile payments in 2013, compared with $163.1 billion in 2012. But in North America, the totals were only $37 billion (2013) and $24 billion (2012).
Analysts maintain that before mobile payments become widely adopted, significant problems must be overcome. There are many different parties involved in the payment process, and a merchant who wants to accept mobile payments is unlikely to support all the possible types.
Meanwhile, Aditya Khurjekar, a former Verizon Wireless executive who worked on mobile payments there, said he believed consumers do not find it bothersome to carry or use credit cards and cash. “There isn’t a problem to solve,” Mr. Khurjekar said. “The mobile payments experience has to become the hook for some other commerce shopping experience.”