Aug 06, 2013 Dave King
For the last several years, consumers and payment companies have been hearing about the impending mobile payment boom that is set to take place. However, there has been little adoption of such platforms to date, but it certainly has not been for a lack of effort.
The payment industry has been inundated by numerous mobile systems that have simply failed to catch on. From traditional electronic transaction firms offering new services to startups focused solely on mobile payments, there have been numerous platforms developed, with few seeing a reasonable amount of success.
Even so, economic experts are still expecting the technology to become a common payment medium in the near future, which makes many wonder just why there has been such a hesitation among consumers to embrace mobile transactions.
Buyers don't recognize benefits
According to Bloomberg, it may come down to the fact that e-payment companies have been unable to demonstrate the value of such technology. The source speculated that there is a latent demand - an unrealized or unrecognized need for a good or service - that has not been conveyed to consumers.
Bloomberg provided the example of E-ZPass, one of the few mobile payment services that has taken off. By allowing users to skip long lines of drivers paying cash at tollbooths, the company was able to show commuters that they needed the service to reduce the annoyance of sitting in traffic. In the same manner, mobile payment platforms can be effective in reducing time at the register and can even come with built-in rewards programs that are easy to access and manage by payment companies. However, the source noted that many transaction processing firms have failed to effectively market such benefits to consumers. In particular, there has been a lack of in-store reward initiatives for these products.
In order to increase the rate of adoption, payment executives need to find new ways to determine what drives payment usage among buyers. Then, they can construct ad campaigns and promotions that are focused on how the products or services make consumers' lives easier.
One of the major gripes that purchasers have regarding many mobile payment systems is that they are only offered in niche markets. For individuals who shop at a variety of retail outlets or travel frequently, it's unrealistic to use a service that may only be found in a handful of stores.
Isis coming this year
Potentially, a recent co-venture from Verizon, AT&T and T-Mobile could change that dynamic. The Financial Times recently reported that the wireless providers are launching a mobile payment service called Isis sometime this year. Using near field communication (NFC), Isis will allow customers of all three calling giants to make transactions on the go.
The source noted that 35 different mobile devices offered by the carriers will support the NFC technology. Also, a quarter of America's largest retailers are implementing NFC portals in their stores.
With the introduction of Isis, the mobile payment market in the United States may be given the shot in the arm it has needed.