Nowadays mobiles are being used as GPS navigation devices, TV screens, music players and so on. But the reality is that it has failed to create
a mark as a mobile wallet. Despite being the easiest method of payment
considering the fact that people carry smart phones all the time, mobile payment
has not gotten its fair share amongst the consumers.
The marketplace is flooded with
mobile payment applications. Three years ago, Google introduced Google Wallet,
a mobile app that lets consumers transfer money, redeem coupons or pay for
purchases with a tap of their smart phones. Consumers can also store their
credit, debit and retail loyalty cards as well as other information in the app.
AT&T, Verizon Wireless and T-Mobile launched a mobile wallet called Isis.
Amazon is testing Amazon Wallet now, and Apple is rumored to be introducing one
as part of iPhone 6. But despite this easy availability, mobile wallets are in
a dormant state. According to a study by mobile research firm Yankee Group, a
mere 16% of consumers used their phones to make an in-store purchase between
December 2013 and February 2014. Among these buyers, 73% made fewer than five
purchases a month. Such low rates of adoption have already killed off the
Square Wallet, a mobile app that was introduced in 2011.
It
is fairly clear that the developers of mobile wallet have not been able to
create trust in the minds of consumers especially regarding the security of
their account details. People are still skeptical about it. According to a 2013
study by Pricewaterhouse Coopers (PwC) people trust storing their loyalty cards
and discount coupons in a mobile wallet, but when it comes to money or digital
house keys, they will take a big step back, the PwC report says. Their main
concerns are theft and loss of access, such as when their phone loses battery
power or hits a technical glitch. They also do not want their mobile carriers
knowing what they are doing with their funds.
There is hesitation in the adoption
of any new innovation which involves money but that is overcome by the efforts
put in by the developers.
Another problem is that people do
not feel the need of mobile wallets. Their life is going on perfectly fine with
either cash or debit/credit cards. Hence, for its success, the current payment
methods need to be broken. If not, then there will be less compulsion to have
to adopt.
A new entrant in this segment is the
NFC. The focus is shifting to NFC since it is enjoying a lion’s share in the
market. According to the latest reports, the new iPhone will reportedly come
equipped with a near field communication system that powers a brand-new payment
platform. People need to get a taste of this wonderful technology and
then will they realize its benefits. And once they get addicted to its comfort,
the demand for it will increase leaps and bounds.
POOJA SONI
Systems and Finance (Batch 2014-16)
SITM
