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• Alternative payment methods: Mobile wallets
The very point of sale don't support all alternative payment methods,
such as the automated clearing house, closed loop
and private label options. Merchants who switch
from these lower-cost payment schemes may incur
higher costs at the POS.
• Hardware and software requirements: Mer-
chants need to adapt POS systems to support near
57 mobile channels field communication (NFC). While many device
manufacturers have incorporated EMV (Europay,
Mastercard and Visa) contactless acceptance into
and nothing on merchant terminals, merchants must activate this
capability.
• Lack of universal NFC protocol: NFC-enabled
By Dale S. Laszig POS systems do not currently enable merchants to
select mobile wallets they want to accept. There is
ave you ever looked for a movie on Netflix no standard identifier or protocol (such as a wallet
and ended up merely scrolling through your ID) that supports acceptance selection.
playlist? After considering hundreds of titles
H and trailers, you decide there's nothing on. • Debit routing complications: Debit routing alter-
You clean up your list, delete movies you've already natives must remain intact in NFC-enabled termi-
seen ‒ and those other ones your parents recommended. nals. This may involve certification and deploy-
Then you exit the app. Like thousands of consumers and ment challenges.
merchants in the app marketplace, you shop, browse and • Earning consumer trust: Merchants may imple-
leave without buying. ment open wallet models, but they and mobile wal-
let providers need to earn consumers' trust.
Having too many apps on the menu is one of many
holdups for mobile wallets in the United States, according Remove barriers, improve security
to a January 2018 study by the U.S. Payments Forum. The "Card issuers are pricing transactions on some types of
white paper, titled Mobile and Digital Wallets: U.S. Landscape mobile wallets as CNP, and many apps require complete
and Strategic Considerations for Merchants and Financial Social Security numbers during registration," stated Sandy
Institutions, lists numerous impediments to widescale Travers, co-founder and co-CEO at DigiPay Solutions Inc.
mobile wallet adoption, including the following: "Until we solve these problems, we'll continue to see delays
• Cost barriers: One-time implementation costs may in mobile wallet adoption."
include software development, software and hard-
ware deployment, training, and promotion. Ongo- Travers understands the need for proof of identity to
ing costs may include maintenance, hosting costs, satisfy know your customer requirements but said mobile
licensing costs and transaction fees. wallet providers can request the last four digits instead
• Transaction fees: Many mobile payment schemes, of the entire primary account number. "The recent rash of
other than contactless, are priced as card-not-pres- security breaches has made consumers wary of sharing
ent transactions, which are generally higher than personally identifiable information, even with trusted
card-present transactions. parties," she said. "CNP pricing and PII requirements are
• Fraud liability: Although more alternative fraud inhibiting wide-scale mobile wallet adoption. Until we
remove these barriers, we may see increased mobile wallet
mitigation and prevention practices are available usage in select verticals, but not on a national scale."
in the digital space than previously, they require
merchants to incur additional investment costs and The U.S. Payments Forum confirmed merchants are usually
deal with ongoing risk considerations. liable for fraud in CNP transactions but noted they can
• Credit and debit mix: A merchant's mix of credit shift liability to card issuers by implementing 3D Secure
and debit payments may be different for digital and other security tools in smartphones that include device
transactions than for card-present POS transac- ID, geolocation and biometrics. "By leveraging these tools,
tions, which may impact costs due to varying merchants can improve their customer authentication
credit and debit transaction fees. Debit transaction decisions and better manage risk," they wrote. "However,
routing, which may involve network payment to- any fraud that does occur will predominantly be passed
kenization and the digital channel, may also im- on to the merchant in the form of chargebacks. Effective
pact transaction pricing. fraud mitigation efforts and chargeback management
require a combination of staff and tools."

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