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Digital Wallets Have Yet To Catch On, JPMorgan Executive Says (reuters.com)
Despite major tech companies working aggressively on making digital wallet solutions available everywhere, these digital payment apps in our smartphones are yet to gain traction, according to Chief Executive of Consumer Banking JP Morgan Chase & Co. From a Reuters report: Apple Pay, Android Pay, and Samsung Pay are being used for less than 1 percent of payments at retailers, Gordon Smith said, citing industry data at an investor conference. Ultimately, the convenience of paying with phones will bring a surge of use from consumers, but it is impossible to know when that inflexion point will be reached, said Smith.
It's not from a want to use my digital wallet. In all aspects, it's far superior to the chip and pin system that the credit card companies want us to use. Those things are terrible and the deployment in the US is atrocious. Whenever I can pay with my phone, I do. It's so easy, much faster, and more secure than anything the credit card companies are offering.
Nothing could possibly go wrong with keeping all your money accessible via the Internet.
I bank with a decent sized local credit union. After they got finished patting themselves on the back for their technological advancement rolling out EVM cards, they refuse to support any of the digital wallets, including Apple's, Android's, or Samsung. Their reasoning (at least as of December 2015) is that no one is using them.
Well, it's kind of hard to use them if you don't support them and permit the card to be tied to a digital wallet. So we have a chicken an an egg problem. They won't be supported until usage goes up, and usage won't go up until they're supported.
Then the amount may significantly increase. I have at least 4 cards from chase that are not eligible for android pay. (Southwest, Marriott, Hayat, IHG)
Could it be everyone has been burnt by apps being buggy, insecure, unsupported crapware that leak you information like a wet rag and vanish into thin air a year after being introduced?
Could it be that the phones we run the damned things on are themselves buggy and prone to intrusion?
Could it be we are just waiting for a bank somewhere to step in and say "Yes, we will take full responsibility for any and all damages to your account should anything at all go wrong"?
That's what I think
I don't go out and about without my wallet, so my credit card is always on me. Using an app isn't any more convenient, its less so. And I have to figure out the risks and insecurities of a new method of payment. I'll just keep swiping my credit card instead, thanks.
I mean really- who the hell really thinks taking out your phone, unlocking it, moving it over a sensor, and typing your pin into an app is more convenient then taking a card from your wallet and making one swipe?
I still have more fans than freaks. WTF is wrong with you people?
The datamining at work on your average smartphone is incredible.
These "digital payment apps in our smartphones [have] yet to gain traction".
Yeah, I think we noticed because NONE OF US ARE USING THEM!!!
The end user wants a single system that will work at most of the places they buy things at, regardless of whether they switch back and forth from iPhone to Android, and regardless of which bank and credit card they have.
Until the various industry players swallow their greed and agree to get together in a strong standards definition and implementation process and revenue sharing process that gives users this kind of universality, the momentum will continue to stall.
Where are we going and why are we in a handbasket?
First, I don't trust the security of the phone. There is nothing on my phone that I would care about if a hacker got it. No logins, no passwords, no addresses. Just a couple apps and several phone numbers.
Second, I don't see why I should give big companies yet another chance to mine my data. Especially something as sensitive as my spending habits. I still use cash a lot for this very reason, every year my credit card company sends me a statement showing me exactly how closely they track my spending.
The MCX, which has Walmart and CVS in their membership, wanted to push their anti-consumer CurrentC app so they could avoid credit card charges.
CVS even had a working mobile wallet payment system working with Android, but disabled it when Apple Pay was launched.
When the world's largest retailer doesn't want to support something, it gets hard to adopt it.
http://www.macrumors.com/2016/...
Grammer Nazis - I mod you "troll" unless you actually add something on-topic. Yes, I know I have mispellings in my sig.
I fail to understand why I'd want to pay with my phone.
A) Cash never runs out of battery, and the merchant can always verify it's valid without a network connection
B) Credit cards never run out of battery, and there's a backup process for when the terminal can't call home to momma (although imprint machines scare anybody under 30 if they have to use them...)
C) Mobile OSs are subject to security holes that are being actively pursued
D) I have to carry a wallet anyway. Drivers license, health insurance cards, *cash*, etc. So what does it gain me?
Seriously, this is the standard "wouldn't it be cool if your smartphone could..." sort of thinking, without pondering if it's really better to do those things with a smartphone.
"impossible to know when that inflexion point will be reached" - who says it's ever going to get there? There's a LOT of skepticism about the security of this kind of transaction, coupled with the fact that it really doesn't solve a problem the consumer has - it's not simpler than a credit card transaction (you still have to take a token out of your pocket, and perhaps type a pin or whatever). It's not particularly faster for the consumer, and it doesn't cost the consumer any less money.
If you want something to take off, it's got to be BETTER in some way than what went before (or, you have to cut off the thing that went before so the consumer doesn't have a choice). Neither of those things is happening, so why does this guy assume that it's ever going to take off? I kind of assume it WON'T at this point.
A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
"the convenience of paying with phones will bring a surge of use from consumers"
How is paying with my phone ever more convenient than my credit card? My (Canadian) credit card supports chip+pin and contactless. Substantially all of merchants around here (Canada) support chip+pin and most support contactless. Unless the phone technology becomes so simple and widely supported that it becomes more convenient to *not* carry my wallet, I fail to see how paying with my phone is more convenient.
(Yes, I understand the context of the story is U.S., not Canada. But this technology is within your grasp...)
Paying with my existing card is literally so fast that I've committed to muscle memory pulling out the wallet, and then swiping (not inserting) the card. It's a system so incredibly fast that there's not really much more improvement.
I don't pay with my phone because I don't want to pay at a store using some contrived boondoggle.
Look - I understand that smartphones are useful. I use one literally all the time, however we seem to have gone into some weird dimension where the answer to every, single, problem is supposedly "A SMARTPHONE APP!!!!".
Exactly. I used to use Android Pay a lot until CurrentC killed it in a lot of places.
Now it's just not worth the hassle to decide whether this store has been infected by the CurrentC virus.
Peter predicted that you would "deliberately forget" creation 2000 years ago...
I need to agree.
I much rather use my phone to Pay. I do where I can... However a lot of places that have the features have them turned off. Heck a lot of the POS terminals have the chip reader disabled. Then you have all these places who are trying to get a personal App for their store. Which is rather stupid except for the ones that you go to all the time. However the questions asked to sign up for those services apps are extremely scary.
Apple Pay and Android Pay use existing technology, as well offer a secure payment method better than any other one.
But I have came across people who scold me for using my Phone to Pay, the call me things like a Hipster. And point to their displeasure of using a different way to pay for stuff. While they take out their swipe credit card. Take just as long and risk their info getting hacked into much easier.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
In fact, it's not worth shopping at anywhere but Amazon anymore anyway...
Peter predicted that you would "deliberately forget" creation 2000 years ago...
How can I decide whether I like a digital wallet or not when the likes of Chase - who is the largest bank out there - doesn't support these new options?
It's not from a want to use my digital wallet. In all aspects, it's far superior to the chip and pin system that the credit card companies want us to use. Those things are terrible and the deployment in the US is atrocious. Whenever I can pay with my phone, I do. It's so easy, much faster, and more secure than anything the credit card companies are offering.
I'm sorry but how is Apple Pay more secure? I haven't used it but from what I am reading, you upload your credit card info to your iPhone and then wave it near an NFC device to pay. That may sound faster but not more secure unless you need to enter your iPhone's PIN number before the transaction can occur but that wouldn't make it that much faster than punching a pin number. Credit cards also have NFC capability as well but limited to a certain amount and can be disabled to limit to using a PIN number which I find far more secure.
Apple, I trust within limits, and financial access ain't one.
Google already tracks far too much about me and profits from it, they don't need to know what the fuck I'm buying.
I'd trust Samsung, but then my money would burn a literal hole in my pocket.
Inflexion, really? I thought it was a lazy writeup by the submitter, but instead it is in the actual article.
Tokenization to protect your card from vendors and requires your fingerprint for security vs tap which requires nothing but the card.
Home Depot and Target can't lose the credit card info you never gave them.
That's a very nice step forward.
There are multiple reasons why I wouldn't want to use my phone to pay for stuff. The three most important ones for me are:
1. Paying with the phone is cumbersome when compared to paying with a contactless card
2. My phone battery sometimes dies, and I would hate to lose access to my money when it happens.
3. I use my phone for two factor authentication with my bank, and having the phone also have access to my bank account defeats the purpose of two factor authentication.
Of course, if I lived in the States, where they are just now implementing chip-and-pin and don't have contactless cards at all, paying by phone might look like an improvement. But it's just not the way to go. If you insist on paying with your phone, you can just get a contactless card in the form of a small sticker that you can stick on your phone or on anything else that you carry with you always. It will never run out of battery, and a hacker will never be able to access it through your phone.
When I hand over a bunch of dirty green paper, it just works. When I swipe my card, it just works (though there's a bit of confusion on whether to swipe or cram). Apple/Android Pay isn't there yet, and I'd rather use what I know works, rather than fumble with my phone and have it not work.
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
On the one hand, contactless payments are _everywhere_ because our cards generally do it. So it's totally trivial to pay with a tap and no pin or signature in the UK. Plus there's a maximum transaction size and there's good insurance based on that.
So does that make us more inclined to dabble with Apple Pay, or less? (I can't; no longer using my Android Pay capable phone, switched to cheap iPhone that lacks it)
It's about what retailers want consumers to use, and how they can squeeze more money from their customers. More secure standards get in the way of customer tracking, which is highly profitable.
Retailers can't track you by your credit card number with chip and EVM standards. They can with the older magstripe and CurrentC.
I know a lot of local retailers rolled out "membership cards" to track individual customers the day Credit Card companies told them to switch to using chip cards.
Later on, I think bean counters looked at the probability of losing money due to credit card fraud (a classic insurance calculation), compared it to the profits from selling their customer tracking data, and went with tracking customers for maximum revenue.
Chip readers & EVM cards were then disabled, and retailers blame the readers they can continue to track customers.
-- Sometimes you have to turn the lights off in order to see.
Can't say I'm surprised.
Give me cash any day of the week.
-- Tigger warning: This post may contain tiggers! --
I dont even have a bank account, its cash all the way down for me.
Nothing can stop me from buying shit with cash, digital money on the other hand can be restricted. And it will be, to stop terrists and child porn of course!
If properly implemented, and it seems Android and Apple do, contactless payment via your smartphone is a lot more secure than anything else. Some advantages it has:
1) A proxy number can be used for each transaction. Your real number need never be used at any time, as a proxy can be created for each transaction. The bank lets the phone know what proxies to use, and the phone lets the bank know when they are used. so even if the merchant gets completely owned, the information gleaned on you is useless as it was valid for that transaction only.
2) You have a device that can notify the bank of the validity of the transaction. Not only will the payment terminal contact the bank for payment, but your phone can let the bank know as well. Now there has to be some slack built in the system to make sure that it can work even if you don't have signal, but basically when your phone gets back on the network if the transactions don't agree, a flag can be raised.
3) You have some defense against a compromised terminal that overcharges (basically a merchant that has messed with their terminals to charge a different amount than displayed. Your phone knows how much the charge was, and shows it to you. If that is different from the amount on the screen, you can contact your bank there and then and stop the transaction.
4) The two-factor auth is taken off the device, on to your device. You have to unlock your phone to use the payment, so you have a 2-factor setup (your phone + either code or biometrics). However with chip+pin, the pin is entered on the terminal so if it is compromised, it can get your pin. The terminal can't get anything when a phone is used as the auth is on the phone, not the terminal.
It isn't flawless, but it is a decent step up from the security of just using a card.
While I have no problem with others that want to pay with their phone, I personally have NO interest in doing it myself.
I don't want any more of my info on my phone than there already is, certainly not my methods and ability to pay.
I prefer to use good old CASH for most of my daily, meatspace transactions. I take out a few hundred each week, and I can easily see what I'm spending in hard currency, rather than lose track easily during the week/month with the abstraction that is credit..
To me, a CC is like a chip in a casino, and it doesn't associate as well with real money spent. I think it is even worse on a phone as that you don't even have go throught the muscle memory action of physically pulling out a card, using it and replacing it in the wallet.
While I have no problem with folks that do wanna use their phone to pay, I can fully understand the myriad of reason one would not like to.
If nothing else, what happens to ones ability to pay if your phone dies?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Surprise: nothing happened!
What convenience does a phone payment system offer that credit cards or cash doesn't?
1) Dead batteries?
2) Easy surveillance?
3) Hackable from anywhere in the world?
With advantages like that... nyah..... Gimme the dead presidents.
The banks are holding us hostage.
If the transaction fails, at least I have something to eat.
love is just extroverted narcissism
Totally would do this, but:
1) Apps refuse to start on rooted/jailbroken phones.
2) There are about umpteen dozen payment systems that do not support each other.
3) Invariably retailers only support at most one or two (which your particular phone does not have).
4) Only a tiny fraction of retailers even support that one or two.
So the result is that you spend all the time setting it up on your device, and then walk around for months never seeing a place where you can use it. When you finally, finally do see a terminal that claims to support the network that your app uses, and you try to start it, you get a pop-up saying, "For security reasons you can not make payments from a rooted and/or jailbroken phone."
In short, people are willing to use it but the corporate world is fucking it up (again).
STOP . AMERICA . NOW
Strong in the running for 2nd oldest profession is "taxation". I'm not interested in paying the smart-phone tax. I like my dumb phone. I'm not interested in paying a transaction tax to a rival "government" that offers fewer protections than the current regime. I've had fraud occur on my credit card before. Cost to me: $2 because I had to use an ATM to get cash as an alternative. Would it have gone that well if I had been using the new tech?
If these upstarts actually manage to gain traction and overthrow the current system, I'll have to deal with it. Citizens are mostly price-takers in the market, and by and large blown in the wind of revolution. I see no reason to encourage such changes when common sense would seem to indicate it has no real chance of improving over the status quo, and a very good chance of making things worse.
Here's a list of places where my ewallet doesn't work:
So it really doesn't matter if I were excited about ewallets or not - since I can't use them at any of the places I shop, of course I too only have a 1% usage rate. So it's certainly not my fault, it's the poor implementation of ewallets.
A sample listing of merchants nearby that do not have a Mobile Payment (without naming names):
- Every single small business restaurant - Chinese, Sandwich shop, Breakfast Grill, etc.
- Almost every drivethrough chain restraunt - oh yes, let me hand you my phone for payment (or you hand me a card reader - even worse!)
- Gas stations at the pump
- Two chain grocery stores
- Pet Food Store
- Car Repair Shop
- Dry Cleaners
- Beer Store
Places that have it:
- Coffee shop
- Dollar store
- Drug store
- Hardware store
So I'm looking at a 95% or so of businesses I frequent who don't have vs. 5% who do. No thanks - not enough incentive to switch, much less set it up.
It will never catch on as long as providers insist on creating walled gardens. Create/use a fucking standard, you fucking twats!
I tried it out on my new Galaxy because - hey - I'm always up for a free $20 (GC after 3 trasnsactions). I was surprised how many placed had upgraded to NFC, especially given how rare the android pay and apply pay apps worked. Then on about the 5th transaction, I realized that is WASN'T NFC that was doing it - it was working on old swipe-only readers. So instead of swiping or dipping my card, Samsung was having Chase issue a unique, one-time-use card number and mimicing the mag stripe. Easy, universal, more secure than the original card. And since even chip and sign cards have no real second factor, the phone is probably more secure than anything in my wallet. I'm good with that.
Is it just my observation, or are there way too many stupid people in the world?
Your iPhone doesn't store your actual card number (termed a "Primary Account Number"). When you add your card to Apple Pay, your bank creates a "Mobile Device Number". Your bank keeps the association while your phone uses the MDN to pay, so that's the number the merchant sees. If their systems are later compromised, your bank knows something is wrong if they see the MDN used in a non-Apple Pay transaction.
Apple Pay doesn't require entering the PIN. You can also authenticate using your fingerprint. But since the phone doesn't transmit card details to the terminal until after you authenticate, it's more secure than using an NFC card. A merchant who upgrades their terminals to recognize CDCVM can allow contactless payments in excess of the limit for NFC cards (GBP 30 in the UK, $100 in Australia, etc).
End of Line.
paywave and paypass with credit cards use tokenisation as well so that isn't an advantage of your phone.
"Ultimately, the convenience of paying with phones..."
What is more convenient about paying with my phone vs paying with my contactless credit card again?
My credit card needs no wireless coverage in the
middle of the giant faraday cage that is the local big box retailer. It also does not need a charged battery. I also don't have to unlock it to use it to pay. All of these things are true for mobile wallets.
The simple truth is mobile payments are LESS convenient than contactless credit cards, and that is not going to change. The only thing that is going to make mobile payments and digital wallets really take off is if it happens in tandem with a new e currency like Bitcoin being natively accepted everywhere.
For historical reference, Samsung and Apple's payment solutions don't make the Visa/Mastercard banks money the way they make money on transactions.
They aren't going to adopt/develop something that only costs them money. There are other issues.
This. So much wisdom in this post. Pay attention kids and read it a couple times until it sinks in. Digital payments != cash in hand at the store.
I already have WAY more of my personal info on my phone than I'm comfortable with.
I, quite simply, don't trust either the wallet systems or the devices enough yet.
Moreover, I don't trust our government enough yet. Because if my phone is my sole form of payment and it's confiscated or damaged, I'm SOL.
Chas - The one, the only.
THANK GOD!!!
You live in the USA where the massivly outdated and insecure mag stripe is stil lthe norm ... ...in the rest of the western world Chip and Pin is more secure than this, ... but so is cash ...
Puteulanus fenestra mortis
My spending habits are known. I know roughly what I spend on food a month, what's in my bank accounts, what my card balance is, and so forth. I notice when I'm spending excess, e.g. when I start buying expensive meals more frequently than usual.
My finances get reviewed when I get paid. I check how much money was deposited, what's in each account, and what balances my debts carry. I shift money around. I review what I've spent money on each month, and project which expenses are transient and can be discounted for the future. I reduce my spending by paying off loans (including my mortgage, soon--it's been almost four years).
I review my spending when I make discretionary purchases. CPU upgrade, new bed, a $50 tea pot, a $180 punching bag. I have thousands of dollars of unspent income every month; I can spend freely, and still attend to this. The excess money is currently going to my 401(K) to catch up for the year (60% of my paycheck); typically, I build up to $10k of emergency savings, and then start tearing down my debts. Eliminating $700/month of expenses in 2017.
I don't handle cash. It's hard to assess my financial position if I can't see what I'm spending. As a bonus, everyone is charging you for Visa's fees, but I'm the one getting kickbacks from Visa thanks to my Platinum Rewards credit card. I'm aggressively using a credit card that takes money from you and transfers it to me.
Support my political activism on Patreon.
for everyone that have some values left use phony cash (useless paper) and be happy
Same here, I use it everywhere it is accepted, the problem is there are only 3 places near me that accept it: McDonalds, Walgreens, and Meijer. Of those 3 Walgreens has the best implementation since they integrated their rewards card into ApplePay. The checkout process with them goes: dump stuff on counter, use ApplePay to apply rewards card at start of checkout, use ApplePay to pay at end of checkout, done.
The biggest problem right now are retailers that refuse to adopt ApplePay, places like Target, Wendys, Wal-Mart, and so on that all want you to use their branded app so they can steal your personal info and reduce credit card swipe fees. All they need to do is implement a rewards card similar to Walgreens but they don't want to offer their customers convenience if it means they can pinch a penny.
The one place I wish would adopt ApplePay sooner than later would be Marathon gas stations, at the pump. Gas stations are one of the largest sources of credit card theft due to the pumps being outdoors and easily accessible to crooks.
I love how many places I go to with my Apple Watch or iPhone where the staff doesn't even know they accept it.
"That doesn't work..."
ka-ching!
"Oh.... Wow... That's neat!"
The only place I've seen that has terminals with the WiFi-like NFC logo that doesn't work is CVS, and I think they're in the same boat as Wal*Mart and Target in holding on to customer tracking via credit card numbers.
Until there is one, open, common, universal standard, this will never get beyond the fringe in terms of adoption. Credit cards with mag strips can be counted on to be acceptable payment the vast majority of the time, so people will almost always have one with them. The digital wallet support is so spotty/sporadic/hit or miss, that it rarely is the most convenient payment option. In fact, I have Apple Pay and even when it's available I usually don't think about it until my wallet is already out and my card is in hand and as I swipe I see the Apple Pay logo and think, "Oh, I could have used that." I think I've paid via Apple Pay once since it was debuted.
I would love to leave the house without a wallet, confident that any outlet or shop where I wanted to purchase something would accept Apple Pay. But we are not even close to this yet. Plenty of places in the UK still do not have the contactless facility for credit cards and some cards are still being issued without this facility. So I am stuck having to carry the wallet full of cards and cash anyway, and if I am doing that I might as well just pull out the card rather than fiddle with the fingerprint reader or PIN on the phone.
Were you born this stupid, or did you have to practice?
Here in the UK, a lot of places accept a whole bunch of digital payments but yet most people still use their debit cards or cash. There are many reasons for this but it is not because of outdated terminals, just about every Sainsbury's or Tesco accepts digital payments.
The reasons people don't use so-called "digital wallets" are:
1. They're just wrappers for existing products. To avoid the requirements banks have to adhere to, most will just charge to your credit card. If they held money for you then they'd have to be properly PCI compliant, instead they let your financial institution worry about PCI compliance and just serve as an intermediary for that service.
2. They're less convenient. Getting out your card and typing your PIN is faster and easier, cash is even easier and faster.
3. Layer of obfuscation, when tracking your spending you now have another party in the mix.
4. Ultimately they are more expensive. When you add more parties into the mix, they each have their hand out for a portion of the purchase. This means the merchant has to put their prices up to compensate for having to pay more fees to accept payment. This is why cash is still king. you don't have third party providers asking for a cut.
5. "Digital" means it runs on a battery, batteries run out.
6. People are scared of having their phones lost, stolen or broken. To be fair there is a bit of merit here, if I drop my wallet all of my cash and cards are fine, if I drop my phone I have to hope it still works.
Basically, digital wallets are a solution looking for a problem. Until providers actually decide they want to be banks rather than wrappers for your credit card and go full PCI compliant, they wont be a popular alternative.
In fact I think banks, who are notoriously conservative will take the initiative first and go digital. I believe a few Australian banks already offer cardless withdrawal services where you can get a pin code on your phone and type that into an ATM/Cashpoint to get out a small amount, A$50 or so from memory.
I prefer to use good old CASH for most of my daily, meatspace transactions.
As do I.
But I use all forms of payment, cash, debit, credit and direct debit/bank transfers. I use the form of payment most appropriate to what I am buying. Only a fool discounts a potential form of payment, only the heir to the throne of the kingdom of fools limits themselves to just one. That being said, I treat credit like the sugar of the personal finance diet. A little sugar is fine, a diet consisting of 90% sugar means you have problems.
Calling someone a "hater" only means you can not rationally rebut their argument.
The cash in my wallet cannot be hacked or electronically stolen, cannot be blocked or lost due to a software error or a hardware failure, or a drained battery. It also cannot spy on me, report my locations and my transactions to numerous 3rd parties, and it works EVERYWHERE, even in power outages and places where the internet is unavailable.
Tell me again: What's the benefit of electronic cash??? Oh, yeah: lazy idiots who cannot be bothered to think ahead and have the cash they need for the activities they are involved in are enabled, in exchange for loss of privacy and a huge boost in financial risk.
Like the old joke about standards, there are so many to choose from. None of them depend on NFC however. One worth mentioning is Paytm, which has recently launched QR code based cashless payments, which simply requires you to scan a QR code at the participating vendor outlet to initiate a payment.
Others using these solutions are movie theater chains and online shopping portals like Flipkart. Some of the other solutions are Momoe, Payzapp, Pockets. The last two are owned by 2 of India's largest banks. Momoe partners with restaurants, letting you view your bill in realtime and split it with friends.
"..One hosts to look them up, one DNS to find them, and in the darkness BIND them."
in countries that have remotely modern payment systems. In Canada at 99.9% of the stores I go to I can just tap my CC (through my wallet, even!) on the same reader that my phone would use and it's done for any transaction $100 with no additional work required. No nonsense of tapping on my phone, launching apps, etc... and has nearly universal support, whereas Apple Pay, etc... are supported basically nowhere.