Good-bye Plastic, Hello Phone: Mobile Wallets On The Rise
As competition for consumer dollars heats up, some big names have stepped in to the fray. Walmart, Target and 12 other retailers have joined forces to form the Merchant Customer Exchange which is developing a mobile wallet app for use at participating stores. Meanwhile, MasterCard has updated its PayPass program so consumers can bypass their credit card and pay with their phone instead.
Not wanting to be left behind, Discover has announced a partnership with PayPal that will allow members of the online payment service to make mobile wallet purchases at any of Discover's 7 million merchant partners. That's good news for the 80 percent of respondents in the Carlisle & Gallagher survey who said they would like use PayPal as their mobile wallet provider.
Consumer obstacles remain
As seems to be the case with all new technology, some have questions regarding mobile wallets and security and privacy issues. Mobile security firm Lookout estimates a smart phone was lost by its owner every 3.5 seconds in 2011. Lost devices with mobile wallets that are not password or PIN protected could end up costing their owner more than just the price of the phone.
In addition, while mobile wallets can be convenient, they are limited by the number of retailers who are equipped to accept payments via the near field communication technology used by many apps. For example, start-up Square offers the app Pay with Square, but the app is only compatible with 75,000 small merchants nationwide.However, limited accessibility may be a thing of the past as major players like MasterCard begin to offer mobile wallets. In a New York Times article, Jennifer Miles of VeriFone, which provides merchant payment terminals, notes many businesses will likely be upgrading as they come under pressure from credit card companies. Are mobile wallets here to stay? Retailers seem to think so.
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