From Google Wallet to Apple Pay, Mobile Payments Still Problematic

Sep 29, 2014

Article ImageYou have probably been hearing a lot about mobile payments, lately-thanks to Apple's foray into the market. As much as you may hear about mobile payments, I'd be willing to bet you've never used it-or seen anyone else flick their phone at the register. Apple hopes to change that, but there are still barriers to adoption.

"Customer adoption is the biggest barrier followed by price of hardware needed to adopt it," says Chris Ciabarra, CTO and co-founder of Revel Systems, Inc.-a point of sale system for iPads. The units needed at the cash register to make mobile payments a reality can be hundreds of dollars each-a major investment for retailers, especially if they aren't sure which solution will ultimately win out.

Convincing retailers there is value in making the change is no small task, but many seem to think Apple is up to the task. "It is more secure and it is by Apple of course. If anyone can get people to adopt the mobile wallet, it will be Apple," says Ciabarra. "It seems that businesses have been trying to do this mass adoption, but no one has been able to do it thus far."

One of the other major barriers to adoption is the lack of a one-size-fits-all solution. For consumers, the promise of mobile payments lies in security and a wallet-free lifestyle. But if you can't use the same solution at Target as you can at Walmart, and if your local mechanic doesn't accept mobile payments at all, well then you might as well just stuck with your debit card, right? That particular problem doesn't seem to be resolving any time soon. Walmart and Best Buy have already said they won't be accepting Apple Pay.

"One reason Walmart may want to create its own solution is because they usually stop these kinds of payments due to high rates. They have refused to accept even certain credit cards in the past because they did not get the rates they wanted for credit cards," says Ciabarra. This seems to be a common problem, even with existing solutions, like Google Wallet.

Ciabarra adds, "Paypal to this day is the only provider that I am seeing making the right choices. They allow all point of sale systems to integrate in. They are not dependent upon processor integration like Apple Pay is dependent which will limit Apple Pay because it forces merchants to get an account with one of only 3 choices; TSIS, first data, or Chase."

While the hype around Apple Pay may spur an initial interest in mobile payments, it's unlikely that the issues plaguing the industry will be cleared up enough to lead to widespread adoption in the near future. 

(Image courtesy of Shutterstock.)