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Consumers have a "trust issue" with mobile payments, which could lead the Google Wallet and other projects to fail, a Fiserv Inc. executive said at a Federal Reserve Bank of Chicago conference.
September 27 -
Banks, credit card networks and technology companies like Google could be wasting money on developing mobile wallets and other smartphone payment systems. A Lightspeed Research survey found that the ability to make mobile payments is "very unimportant" to about half of credit card customers with smartphones.
September 21 -
Google Inc. may launch its much-hyped Google Wallet as early as this week, according to a number of reports.
September 19
Banks and technology companies betting on mobile payments have to overcome a very basic hurdle: most Americans still don't have smartphones.
Almost half of U.S. credit card customers use basic mobile phones, meaning they can call or send text messages but cannot connect to the Internet by phone, according to a survey this month from Lightspeed Research. Another 14% use "feature" phones, which have basic email and Internet connectivity but are not as advanced as smartphones.
"All evidence points to the fact that consumers want to do more and more on their mobile devices … but right now there's no question that mobile payments are still in their infancy," says Greg Flemming, a senior vice president in Lightspeed's financial services group.
Several industries are anxiously waiting for U.S. mobile payments to grow up. Big banks, credit card networks, telecom carriers and technology companies are all vying to develop ways for customers to pay with their smartphones at the checkout counter — even though most Americans currently think such mobile wallets are "
Consumers also
Google Inc.
Some credit card customers may be more likely than others to start paying with their phones, because they already have the technology to do so, Lightspeed found.
American Express Co. and HSBC, for example, have the highest percentages of customers with smartphones, in part because both companies cater to wealthier, tech-savvy customers.
"It speaks in part to the demographic and in part to the opportunity," Flemming said. "What that means is American Express has an opportunity to interact more with its customer base."
Meanwhile, 51% of Discover Financial Services cardholders relied on basic phones, which Flemming and other analysts said reflected the company's relatively old customer base.
"In general, if you skew older, you're probably going to be slower to take up the newer things," says David True, the executive director of consultancy MCAWorks.
