For those of us skeptical of technocrats’ and marketers’ ability to bend consumer habits to their will, the saga of mobile payments is the story that just keeps on giving.
I have been covering this one since 2005. Back then the NFC chip industry already had the tech in place to make all of this work. No one seemed to care.
Through the years, it's been the same old lament: Consumers are unimpressed. Credit card, carrier, mobile phone and tech upstarts all tried to claim first mover advantage and cluttered the field with solutions to problems no one had. And everyone claimed to hold the same conventional wisdom: payment isn’t enough. Consumers wouldn’t sign on and change behaviors until mobile wallets offered real value and advantages.
And here we are years later, with Android and Apple Pay deployed, and contactless payment terminals popping up everywhere. And consumers are generally still underwhelmed by the prospect of holding a phone up to the swipe machine instead of a credit card. Go figure.
I love when this happens.
Mobile payments and mobile wallets continue to enjoy that indomitable presumption of inevitability. A Nielsen post this week recounts a panel discussion on mobile wallets at the Consumer 360 Conference. “There’s no doubt adoption will come,” the post quotes MasterCard Group Head, Mobile Media Ben Jankowski, echoing everybody in the mobile field for a decade.
This panel did make the point that emerging markets will be the main users of mobile wallets. In many countries, cash is just too inconvenient. These are economies where carrier billing got a toehold as a form of payment. How, when and where that migrates to developed markets is anyone’s guess.
IBM’s Alberto Jimenez made the provocative point that merchant-based wallets are showing the most growth, so keep an eye there. Well, I get that he may be referring to Starbucks -- but I'm not sure where else merchant wallets are getting traction.
Nielsen itself offers up some early metrics on wallet use: about 18% of average smartphone app users opened at least one wallet in the average month in Q1 2015. Nielsen tells me that Apple iOS Passbook is not included in this count, which stuck to apps that are used mainly for payment. That likely includes the Starbucks app, which by some measures is responsible for much of the mobile payment going on.
Nielsen says that 29% of U.S. mobile wallet users are 35-44, while 20% are 25-34. Again, I am thinking a lot of Starbucks customers are in there. Starbucks is among the top 25 apps for monthly active users, according to Mobidia. But I'm being skeptical. Some of the guys on this panel Nielsen reports on are still talking about technology being the main hurdle for m-payment adoption. Please!
Not surprisingly, Nielsen finds that mobile wallet users are more affluent and heavier users of banking products -- so of course they're ripe for financial service marketers. The segments that show the most interest in adopting mobile wallets in the future are Millennials (39%) and Hispanics (38%).
So are mobile payments and the wallet coming? Ok, sure. But let’s not kid ourselves. We all know the kind of integration and conveniences most of us will need to adopt these methods of payment seriously. Aggregated loyalty programs, promotions and coupons, perhaps easier access to banking and financial services, and probably five other things really need to work well together in one spot for these apps to make a credible case against credit cards.
And the fact of the matter is that until Apple got into the picture with the scale, security and seamlessness of Apple Pay on iPhone 6, this whole effort was a clown car.
Still, I don’t think I am alone in having used Apple Pay a few times at launch for the experience and not at all since. I'm pretty sure I haven’t missed a thing.