Mobile payments still 2 to 4 years away, few customers excited

posted by Victor H. / Dec 22, 2011, 7:41 AM

Mobile payments still 2 to 4 years away, few customers excited

Back a couple of decades, many people thought that in the future people would be flying jetpacks, be fuel independent, have motorized shoes and use their cell phone instead of cash money or credit cards. Well, the years have passed and when it comes to mobile wallets they have not become a widespread reality and they’re not likely to go mainstream in the next couple of years either. Late last year, an NFC chip was built in the Nexus S and we held our breath for 2011 which - hopes were - was to become the year of mobile payments.

Now, the end of the year is close and only a few phones have the technology, but the problem is not only in the lack of massively adopted NFC chips - it’s the merchants who have to install costly terminals supporting the new method of payments and not everyone is in a hurry. The widespread opinion is that it will take another two to four years until we see a massive adoption of mobile wallets.

Customers are not in a hurry either. A KPMG study found that a mere 23% of consumers were enthusiastic about using their phones for payments, with the biggest percentage among young adults. Many doubt the practicality of it - after all a credit card isn’t that heavy to carry around. Additionally, while Google promises unmatched security, people still fear that losing their phone could turn out a costly mistake.

The prospects for the market are nonetheless huge. In 2012, it’s expected to reach $2.1 billion in scale and until 2015 that number is to grow more than ten-fold to $22.6 billion.

"2012 will be about a beta and expanding that beta test. It will take some time for these this to become mainstream," Thomas Kunz, senior VP at PNC Financial said. "There are 11 million merchants in the United States, and nobody's being paid to make this change. Using a phone instead of a card is not such a big deal, at least right now."

Currently, there are around 500,000 NFC reader terminals installed at retailers.

What do you think about using your phone instead of a wallet to pay for goods? Is it really the gamechanger it’s hyped up to be?

source: Reuters

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9 Comments

1. jbash

Posts: 345; Member since: Feb 07, 2011

I hope it will become mainstream, i want everything into one: my wallet, camera/camcorder, radio, tv, computer, and of course a phone.

posted on Dec 22, 2011, 7:45 AM 2

7. ardent1

Posts: 2000; Member since: Apr 16, 2011

Prepare for the worse case scenario if you lose your "all in one" device. The problem with an electronic wallet is dealing with theft.

posted on Dec 23, 2011, 12:46 PM 0

2. itsthenew

Posts: 13; Member since: Oct 22, 2010

I recently just used google wallet to pay for my lunch and while it was neat that it worked (and free since google gave me $10 dollars to start with) it really didn't seem like a time saver to be honest and I won't be putting my credit cards on my phone.

posted on Dec 22, 2011, 7:59 AM 0

3. ohiojosh78

Posts: 32; Member since: Oct 17, 2011

So you are worried.about someone getting your credit cards if they swipe your phone but...they would also have your credit.cards if they stole your wallet. At least if they were in your phone you could have password protection that would slow them down till you noticed your phone was missing. If they swiped your wallet the thief.would have immediate access to purchases.

posted on Dec 22, 2011, 11:39 AM 2

8. ardent1

What the credit companies don't tell their customers is there is a huge amount of fraud detection, your purchasing demographics, etc. If someone swiped my wallet and tried to make suspicious purposes: (a) I am NOT on the hook except for maybe $50 per federal law and (b) the credit card company will alert me as well.

posted on Dec 23, 2011, 12:50 PM 0

4. squeeb

Posts: 99; Member since: Dec 02, 2011

Nice feature, but the reality is we won't see it wide spread for some time...I mean look how long it took places like McDonalds to accept credit cards...2004!!!!

posted on Dec 22, 2011, 2:13 PM 0

5. Skidro13

Posts: 65; Member since: Jul 27, 2010

I just downloaded the XDA version of Google wallet to my gNex. I didn't put any credit cards on it, but I still had the free $10 dollars from Google. I went to go get breakfast from my local McDonalds and to my surprise there were 2 NFC readers waiting for me! The whole system worked flawlessly. I still will not put on credit cards but i will defiantly be grabbing some cheap gift cards to load up my mobile google wallet.

posted on Dec 22, 2011, 3:09 PM 1

6. ILikeBubbles

Posts: 525; Member since: Jan 17, 2011

if you can load up google wallet with gift cards that would be AWESOME! although i think in the end when it comes down to it the 'bad' guys are usually about half a step above the 'good' guys. im sure you guys have seen Hackers. :) anyway. my point is that the strong will consume the weak.. its sort of like viruses and malware on Android i think. what sorts of apps are malware? there are probably a few simple things that could increase security 100x... but maybe not.. its new enough that remains to be seen.

posted on Dec 22, 2011, 9:22 PM 0

9. Forsaken77

Posts: 553; Member since: Jun 09, 2011

I guess this is good just because it's an added way to pay for things but I don't think it will fully catch on at all. Most people are leary about digital purchases because they don't want their info stolen. Alot of people won't ever buy anything online. Plus... it's probably just as easy to pull out you wallet/credit card than it is to do it with your phone. The thing I'd really like to see would be to integrate my drivers' license into my phone with all past traffic violations, that affect my insurance rates, available with a single tap.