Major mobile wallet providers not distinguishing themselves

 In Blog

We now know that Samsung Pay will launch in the U.S. in September after first debuting in South Korea. We also know that the Merchant Customer Exchange (MCX) will soon launch a public test of CurrentC in Columbus, Ohio.

After those two bits of news broke recently, I now can say with confidence that the current mobile wallet industry in this country resembles an elementary school play.

When I was in grade school, select classes produced one play per year. I participated in five plays (and had the lead role most of the time, thank you very much).

One thing I’ll always remember about each play is that, when it came time to do musical numbers, all my classmates flooded a small stage to participate. Everyone got a chance to shine, and no one’s voice stood out from the crowd.

The mobile wallet industry right now is that musical number, and no provider is really differentiating itself from the others, at least in the eyes of consumers.

Apple Pay leads the pack in media hype, but its success with consumers is difficult to measure at the moment because there are conflicting reports about it.

Michael Misasi, one of my old colleagues at Mercator Advisory Group who now works for payment gateway provider BlueSnap, recently wrote a blog post on LinkedIn and warned the industry not to put too much stock into separate Apple Pay surveys from Auriemma Consulting Group, Phoenix Marketing International, and InfoScout.

Misasi believes the results might be flawed because of whom the companies surveyed and when. And, while I agree with his argument, I think it’s safe to say we’re still in the first inning of what’s going to be one of those four-hour American League baseball games.

I’m not sure if the industry can handle such a marathon.

Jim Wells, a longtime industry executive, commented on Misasi’s post and summed up the current market in the best way possible:

The mobile payments industry has all but sabotaged itself, first by over-hyping a solution to a non-existent problem (taking a payment card out of an analog wallet) and then over-promising and under-delivering on capabilities (it will replace analog wallets).

How’s that for a mic drop?

Wells’ observation reminded me of my current view of this space: let’s have a discussion about proximity mobile payments in 2020. By then, we’ll be well into the EMV transition with more contactless terminals in the U.S., and it’ll give all the major mobile wallet providers more time to figure things out.

And that brings me back to MCX.

A lot was made of CEO Brian Mooney’s recent admission that a full CurrentC launch will probably not happen until next year. That certainly puts MCX farther behind its competitors in the industry. But who’s winning that race at the moment? MCX still has a shot at making some noise.

The Mobile Payments Today article about Gallup’s U.S. consumer pole which I wrote a couple of weeks ago said that not many consumers in the U.S. have a digital wallet on their smartphone. And who knows how many times they’ve actually used something like Apple Pay for an in-store transaction?

I’ve now owned an iPhone 6 for six months. In that span, I’ve only used Apple Pay twice in a retail environment: once at Whole Foods and once at Panera. There’s no incentive for me to use it besides the cool factor.

I don’t completely agree with Wells and believe the industry still has a chance to right itself at this point. Remember, remote mobile payments are booming. Apple Pay is great for in-app purchases when you just need your fingerprint to confirm a purchase instead of remembering a username and password. That’s great value.

But as far as proximity mobile payments are concerned, I’m sitting in the back of the auditorium and there are no stand-outs on the stage. I’m still waiting for that one singing voice to make me nod in approval.

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