Mobile payments may face slower embrace by customers than hoped at global trade show

Try as it did to promote the new world of mobile payments, this year's Mobile World Congress in Barcelona showed that using a smartphone to make purchases is still a tough sell among consumers.

The world's largest annual cell phone trade show drew more than 72,000 attendees from the mobile, technology and payments industries in 200 countries. Much of the recent expo focused on the ease of making payments with debit, credit and prepaid ACH cards through smartphones.

But as the Associated Press reported, many of those who attended the event weren't willing to set up their phones to become their keycard allowing them in and out of the show's turnstiles. For those pushing for adoption of "tap-to-pay" near-field communications (NFC) to replace payment cards and tickets to events, that may have been a disappointment.

Even Reed Peterson, who is in charge of the NFC initiative at wireless trade group GSM Association, acknowledged that a lot of pieces have to fit together for tap-to-pay retailing to work. The phones need to be outfitted with both hardware and software compatible with NFC and service from phone carriers, retailers must be equipped to accept the technology and consumer demand has to warrant the connection.

"I want to get to the point where the consumer goes into the store and says 'Show me only the phones that have NFC,'" Peterson told the AP.

Obstacles faced by NFC
One obstacle to consumer demand is the lack of NFC capabilities in Apple's iPhone, the only major brand smartphone without the technology.

Another is a battle brewing over where the phone's secure element, whic transmits ACH card information and other documents, will be stored. GSM Association, which represents mostly cell phone carriers, argues the information should be stored on a customer's SIM card for the greatest flexibility. SIM cards are issued by phone carriers.

But at the Mobile World Congress show, Visa announced it struck a deal with Samsung Electronics to be in charge of the secure element in their latest phones. That means any bank that allows mobile payments to be made through Samsung smartphone will accept the payment through Visa exclusively.

For PayPal, a leading proponent of mobile payments, the focus is on the best shopping experience for consumers, not on the payments themselves.

"We feel this is going to leapfrog the efforts of NFC," said David Marcus, the president of PayPal.