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CoverStory
mobile wallets. Twenty percent said
banks, and 10 percent said Google
Mobile payment adoption Inc. But the largest share – 64 percent
slows – said they didn't trust anyone. These
consumers said they had no plans to
While bitcoins drew plenty of buzz in use smartphones in lieu of traditional
2013, the one big payment trend that payment form factors, like plastic
seemed primed for takeoff this year cards and cash.
– mobile payments – didn't make
significant progress. In January 2013, Another problem: the proverbial
Forrester Research Inc. predicted "chicken and egg" dilemma in which
a 48 percent compounded annual consumers represent the chicken
growth in U.S. mobile payments and merchants the egg. "Consumers
through 2017, when the consultancy won't demand a payment technology
expects a total of $90 billion in mobile [like mobility] unless it's accepted
payments driven largely by in-store by their favorite retailers. Retailers
transactions.
won't invest in a payment technology
unless consumers demand it," said
Yet despite a flurry of activity this year April Schmaltz, Vice President
– including the long-awaited launch of Marketing at TMG Financial
of Isis, a mobile wallet backed by the Services, which handles card-issuing
three leading mobile companies and for thousands of credit unions and
adopted by card issuers American community banks.
Express Co. and JPMorgan Chase
& Co – mobile payments have been "I see an evolution of mobile where
slow to make converts out of U.S. it becomes more of a marketing
shoppers. According to the research engine than a vehicle for payments,"
firm Berg Insight, Americans used said Pradeep Moudgal, Director of
smartphones to make $500 million Emerging Technologies at Mercator.
in purchases in 2012, and most of
those sales were rung up at Starbucks Even if retailers were ready to
Coffee Co. Starbucks claims 3 million make the technology investments
mobile payments a week from necessary to accept mobile payments,
consumers using a smartphone app there's no clear-cut winner among
developed by Square Inc.
supporting technologies. Near field
communication (NFC) underlies
So what's holding back mobile numerous contactless payment
payments? Some experts point schemes involving smartphones, but
to a fixation on creating virtual newer schemes rely on quick response
replacements for the traditional codes that most merchants can read
wallets consumers generally carry using existing POS equipment. One
around with them. "Consumers big problem with NFC: Apple Inc.
just don't think that way," industry has declined to add the technology
consultant Paul Martaus stated in to its popular iPhone line of mobile
"The competitive, diversified mobile devices.
wallet landscape," The Green Sheet,
Nov. 25, 2013, issue 13:11:02.
As a consequence of this state of
flux in technology, several new
Michael Misasi, Senior Analyst at mobile solutions have emerged. One,
Mercator Advisory Group, said called Loop, was created by serial
merchants need mobile solutions entrepreneurs George Wallner and
that do more than mimic credit and Will Graylin. Graylin founded two
debit cards. They're more interested successful early players in the mobile
in solutions that incorporate rewards field, ROAM Data Inc. (which he
– iron-clad security, too, he said.
sold to Ingenico) and Way Systems
Inc. (sold to VeriFone Inc.). Wallner
Security is also an issue. In 2013, the founded and ran POS terminal
British firm Consult Hyperion Ltd. manufacturer Hypercom Inc., which
asked over 1,000 U.S. consumers was acquired by VeriFone in 2011.
who they trusted most to provide
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