It's a weird time for mobile payments

| by Will Hernandez
It's a weird time for mobile payments

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Every so often, someone will say something at an industry conference that sticks with me for awhile.

That memorable observation or statement usually comes from a company executive or analyst. But one particular observation that has been stuck in my head lately came from someone in a demographic that financial companies focus on ad nauseam these days.

"Apple Pay's biggest rival is the little pouch you can put on the back of your phone [to carry your credit card]."

That observation came from a millennial student during a panel at last year's Bank Customer Experience Summit sponsored by Mobile Payments Today and ATM Marketplace.

This particular millennial made a great point, and it's something I hadn't thought about before she said it. I see a lot of my friends with those combination wallet/phone cases that can hold an ID and a few payment cards. Why tap at the physical point of sale when you can use your card despite the slowdown with chip card transactions?

The student's statement takes on even more significance today because we're at a weird time with mobile payments.

Consumer adoption is still not where the industry wants it to be as far as proximity mobile payments inside a store. In-app mobile payments are booming thanks to the likes of Amazon, Uber and checkout methods from the Pays and Masterpass and Visa Checkout. But this idea that smartphones will replace cards as a payment vehicle inside brick-and-mortar locations is stuck in neutral.

Of course, there are exceptions with something like Starbucks. But overall, proximity mobile payments adoption continues along at a snail's pace. The future looks a bit bleak as well, especially when you look back at what that millennial said during our summit.

We've also seen multiple studies over the past few concluding that younger generations (don't forget about Generation Z) are aware of mobile payments, but don't care much about them — a service such as Venmo being the rare exception. These consumers are fully aware that they can pay in-store with a service like Apple Pay, but choose to ignore this fact when it's time to make a purchase.

It's stuff like this that makes me doubt claims and studies that say we're on our way to a cashless society. No one can possibly know the tendencies of every adult in the U.S., let alone the world. While there are more options these days to pay for goods and services without cash, old habits die hard with many people.

However, there is some hope on the horizon for people who track and worry about such things.

Some 3.4 billion smartphones will be ready for Apple Pay, Samsung Pay and Android Pay by the end of 2017, according to a recent estimate from IHS Markit. The company expects this number to increase to 5.3 billion by 2021.

This is all well and good, but as IHS suggests, providers need to make their respective services attractive enough for consumers to care.

Oh, and there's also that little problem of the combination wallet/phone case. But that's a separate issue altogether.

Topics: Bank Customer Experience Summit, Contactless / NFC, HCE, In-App Payments, Mobile/Digital Wallet, Trends / Statistics

Will Hernandez

Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of, he spent two years as the content manager for, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

View Will Hernandez's profile on LinkedIn

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