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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.
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.
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 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.
as long as you don't install anything on your phone the issue is not that the retailer get access is that apps may get access to your financial details
retailer don't need to get card details with chip and pin either.
It is much simpler to secure an interface that does to challenge response (ok I don't believe chip and pin do this yet) when I do a physical action, than an internet capable general purpose computer that you install arbitrary software on.
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.
entire countries have been paying by phone for over a decade now
why are we so backward?
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?
Well unless you just keep cash all the time. Vulnerable to Fire and basic theft. Your money is accessible via the internet, whether you like it or not.
Those ATM are connected to the Internet. You local bank chain is connected to the internet.
The tools like Apple Pay and Android Pay, use your existing credit card, and send a unique number each time much more secure than a chip or magnetic swipe. Yep it going over the internet like the rest of your money.
Deal with it.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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.
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.
At least around here, if the terminal supports chip then you have to use the chip. It won't accept the swipe method, and the chip system is inordinately slow.
With Apple Pay I can just hold the phone to the terminal with my thumb on the home button, and it's done.
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.
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! --
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.........
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
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.
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.
"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.
most support contactless.
And in 3 words you've explained exactly why pay by phone isn't taking off.
Paying with my phone is far more convenient than with a card, if I don't have to carry the card. But because it's *most* and not *all* locations that support contactless payments, I have to carry both, and if I have to carry both anyway, I might as well just use the card.
Add to that the absolutely horrendous implementations that are out there for electronic wallets, and no wonder they aren't in use.
For specific examples of issues:
- My current bank's app takes long enough to load each time on the phone that I can start it loading, pull out my actual credit card, pay with it, put it away again, and the app still won't have finished loading to allow me to pay
- The Canadian Mint actually got involved developing it's own digital payment method, known as MintChip it sounded like a great idea, until you find out it's accepted by only a dozen merchants in the whole country, and has transaction limits of only a few hundred dollars per week.
- Half the banks don't yet have any mobile payment app at all (one notable Canadian bank claims to allow you to pay with your smartphone, but they don't mean an app, they mean that they will send you a large sticker with an RFID chip embedded in it that you can plaster on the back of your smartphone... talk about missing the point!)
- Whenever my phone NFC doesn't scan right the first time at any terminal, there's no option for a second try, it immediately forces you to insert your chip card, or swipe the magnetic stripe, which means you better have your physical card handy, so you can't just leave it at home.
- As mentioned earlier, although most merchant terminals accept tap-to-pay, not every single merchant does, and without all of them you end up having to carry your card anyway, so there's no advantage in that case to using the phone instead
So why are mobile wallets failing? Because the banks are making them fail. it's really that simple.
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
Most of those countries are in Africa, and they're paying by phone because the banks made it very hard for poor people to have bank accounts. There was a gap in the market and phones provided the hardware for doing it. We aren't doing it, because banks have been giving us (more or less) the service we want, so we've not had a market for a disruptive technology.
I am TheRaven on Soylent News
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.
Smart cards are computers with IO ports. When you plug one in, it gets power, takes data, generates a digital signature, and returns it. If it verifies, you're good.
Support my political activism on Patreon.
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.
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.
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.
er, no. I was talking about a first world country. Pull up the list of countries ordered by GNP, and let me know who is #3
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."