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

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: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.

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.