Why Mobile Wallets Are Doomed

redletterdave writes: "The other shoe has dropped for Square. The once-hyped mobile payments company is killing off its Wallet payments app and replacing it with a new app called Order, which will allow users to order food and beverages ahead of time at their favorite cafes and restaurants. For entrepreneurs, the concept of a mobile wallet seems so logical that the payments industry looks like it's ripe for disruption. If everybody is always carrying around a powerful computer in their pockets, it's natural to consider loading payment information onto that secure device as an alternative to cash or plastic cards. The problem comes when this logical entrepreneurial spirit merges with an industry segment that is classically illogical. The payments system in the United States is a mess of entrenched interests, fragmented business opportunities, old infrastructure (like point-of-sale systems), back room handshakes and cut throat competition. This behavior is not going to change any time soon, which means mobile wallets like Square are going to continue to struggle — at least until a more legitimate, easy-to-use and cost-effective solution comes along."

Comments

WTF does it do for me?

[alen]

why is paying by phone so much better than with plastic?
i do it starbucks for the rewards
only other reason is if a food truck took cards instead of cash. why do it anywhere else?

for the retailers its more money to spend with no return on investment

Re:WTF does it do for me?

[The Good Reverend]

Where are you buying coffee? All the Starbucks around here have phone scanners on the counter, and the exchange is at least a few seconds quicker than handing over a credit card or dealing with cash (and change).

Re:WTF does it do for me?

[alen]

i suspect that like with the internet of things, the consumer feature was secondary to the primary feature, to get your data

Regular Wallet

[PvtVoid]

If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual cash in it.

Re:Regular Wallet

[Noah Haders]

even if you have a mobile wallet, you'll still need your plastic CCs as well. and debit card. also, wallets have driver license, insurance cards, etc. and cash. so there's no way to replace your regular wallet with your phone. so what's the benefit to consumers?

Re:Regular Wallet

[Splab]

In Denmark, Mobile Pay is a massive success, users can transfer money to each other, split bill etc.

The value added as a consumer using Mobile Pay, rather than CC, is the fact that we can instantly settle our "debt". No more "I bought round number 4, so I'm not up for another now", someone goes and pays with their CC (or using mobile pay in the places that accept that) and can instantly deal with the bill among their peers.

Almost 25% of the population has adapted this solution in less than a year.

Why they're really doomed...

[Maltheus]

I barely trust using my phone to log into a social network, let alone anything that might cost me money. With every app attempting to spy on each other, I would never trust my phone for financial transactions. Not for many years to come.

Re:You mean....

[SpankiMonki]

Cryptocoins are a solved problem. It's being able to store them securely that is the problem.

IOW, the cryptocoin problem isn't solved.

What I love about credit cards

[Anonymous Coward]

Is that I have to plug them in to charge for 3 hours before I can use them to buy a coffee...

The first time I get stuck somewhere because my phone died and I was unable to pay for a bus or taxi is also the last time I rely on mobile payments.

Re:Doomed? They Were Never Viable.

[AmiMoJo]

E-wallets have been popular in Japan for years. They are extremely convenient, especially if you use public transport a lot (and Japan has good public transport). No more messing about with change at the convenience store either. Vending machines take them too. As an added bonus there is no receipt to throw away, that gets stored on your phone/online account automatically as well.

Business users love them because they can easily import the receipts into Excel and file an expenses claim. Everyone else just finds it easier to pay for stuff at the end of the month via their mobile bill, instead of loading up a stored value card or fishing for change every time.

I hate coming back to the UK and having to deal with all this crap just to buy stuff. Some places can just about cope with contactless debit cards now, but if you have more than one in your wallet you have to get it out or a random one will be charged. My phone is nice and separate.

Re:You mean....

[Archangel Michael]

Rapid Price Changes are part of a infantile system. As the system matures, and becomes wider spread, pricing will stabilize. The problem is what to do in the meantime. Right now, people with patience will make a minor fortune, provided that the market exists in the future. In the mean time, it is not for the faint of heart.

If I were a merchant, I would be accepting BitCoins as fast as I could, as the opportunity is there right now, with enough patience.

Re:Sure it is

[lister king of smeg]

Sure it is. If a hacker gets my CC info and makes charges, my loss is limited to hassle and frustration. If a hacker gets my BTC info, I lose my BTC forever. That makes BTC like cash, which sure can be stolen, but to steal my cash you have to walk up to me and get my wallet away from me. A wallet thief can only rob a handful of people per day, whereas a BTC thief can take a hundred million dollars from ten thousand people in one night.

There are lots of tradeoffs for all these different systems. None of them are exactly perfect but none of them are worse than all the others in every way. Each has different strengths.

Do you keep your entire life savings in cash in your dead cow wallet? no? then why would you keep it all in your mobile cryptocurrency wallet? have a offline wallet at home for you savings and carry you spending money in you mobile wallet problem solved.