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Don't toss out your leather wallet just yet, Wal-Mart is innovating, and Project Oscar is a go.
Here are a few stories that caught my attention this week in the commerce space.
Gimmick to mainstream — the difference a decade can make
With Square teaming up with Starbucks, PayPal partnering with major chains like Home Depot and McDonald’s, and all the hype and speculation around the new iPhone having or not having NFC to facilitate payments for Passbook, mobile payments are getting a lot of ink. But when will mobile payments be fully mainstream? Not for at least 10 years, writes Christina Bonnington this week at Wired. Bonnington points to slow adoption and infrastructure holdups as the major bottlenecks:
“Forrester Research estimates only one-fourth of U.S. consumers will own an NFC-enabled phone by 2016, with 100 million shipping in 2012. Until a solid majority of consumers own such devices, merchants have little incentive to create an infrastructure as receptive to smartphone payments as it is to cash and credit cards.”
Bonnington notes that credit card companies are pushing for merchants to upgrade their systems to accept contactless payments, but as analyst Mark Hung told her, this alone could take up to a decade. Bonnington points out that even after that happens, mainstream mobile payments will still face obstacles similar to those that credit card payments face now: competing platforms that force consumers to carry multiple credit cards to accommodate merchants who accept MasterCard and Visa but not Discover, for instance. Imagine a merchant accepting PayPal and whatever Apple develops but not Google Wallet or Isis. Adding to the chaos, processing fee distribution between banks and hardware/software developers will need to be sorted out, she says, as will agreements on how data gathered via mobile payment will be handled.
In a similar vein, Chris Ziegler at The Verge also argued this week that mobile payments are not ripe for the mainstream and pointed to the ultimate hurdle: consumer frustration and distrust. Ziegler shares a personal experience that highlights the cumulative result of the issues Bonnington noted together with the unreliability of cellular networks: even mobile payments in stores that are set up to accept them don’t always work. Until mobile payments become as reliable and ubiquitous as cash and credit cards, he argues, they’ll remain a gimmick.