Hold On, Convenience Just May Lead Consumers to Mobile-Pay

"Convenience" is a tired selling point for mobile wallets, but it's one I'm finally starting to agree with.

The argument goes that tapping a contactless card or payment-capable phone against a special reader is so much easier and faster than swiping a card that a consumer would be eager to change their habits.

In reality, most people, of course, don't consider plastic cards all that time-consuming. Checks and cash may take a little more time than cards, but not enough to make most people demand some kind of relief.

My mind is being changed by two recent experiences — one at a grocery store, the other at an Apple store — as well as last week's test launch of the Isis mobile wallet.

When the Telco venture Isis began its consumer tests last week in Salt Lake City and Austin, Texas, it ran an ad on local television stations and YouTube featuring this "convenience" argument. The ad showed how using Isis to pay for purchases and manage coupons could prevent a chaotic series of events that led to massive property damage and even a small fire.

At the grocery store last week, my own experience was not too far off.

I was in line behind a woman paying with a check. This is not the nightmare it used to be — the store can fill out the check for the customer to speed things along — but it sparked a series of failures that reminded me very much of the Isis commercial.

First, the cashier accidentally printed the transaction details on the wrong side of the check, forcing the customer to fill the check out by hand. Second, the customer asked for $20 cash back, and for some reason, at just 7:30 a.m. the cashier's till had only two $50 bills in it. This held up the line until someone stopped by to make change.

Compare that to the process I experienced in returning an unopened keyboard at an Apple store. I handed the keyboard to a clerk, who then scanned a bar code on my receipt using a mobile device.

That was it. 

I didn't have to show him my credit card or my ID. I didn't have to sign anything or fill out any forms. I didn't even get a printed receipt. It was so fast and seamless that for a while I wondered if a return had even taken place.

What made the Apple example work was the merchant's complete buy-in to this new payment scheme. As some early Isis users are learning, many merchants listed in its mobile-wallet app aren't active participants in the trial. This is causing some confusion for consumers, particularly if any questions arise during the payment process.

Companies such as Square Inc. and eBay Inc.'s PayPal are promoting software-based wallets that similarly streamline the transaction by allowing users to begin the payment process by tapping an icon when they enter the store, rather than waiting until they get in front of a cashier.

A test last month of PayPal's system didn't produce a huge number of payments, but PayPal's partner ShopKeep POS said the few consumers who used it were satisfied enough with the experience to try it multiple times.

That's a slow but promising start, and although PayPal has certainly failed in the past at introducing new payment systems, it demonstrates that the "convenience" argument can be very compelling if the merchant is fully supportive of it.

Daniel Wolfe is Editor in Chief of PaymentsSource and a contributing editor at American Banker.