Mobile Wallets: To Succeed, Forget About Payments

Mobile wallets were a well-covered topic a couple of years ago, and now the subject may verge on tiresome. But it lives on, be it in the tenaciousness of ISIS (which had enough problems before recent developments in Iraq and Syria) or the ubiquity of conferences and panels on the topic. And as more and more of what we do moves to mobile devices, we will at some point have less need for the stuff we carry in our pockets.

But for the moment, and the near future, the topic will remain of interest only to the fraction of 1% of the population that reads pieces like this one: the insiders, the technologists, the payments geeks. The vast majority of people, in countries where paying with plastic is widespread, don’t care. At all.

For such people, there is no benefit from paying with a mobile device, no matter how elegant it might be, how antiquated plastic cards are, how dirty cash is. For most of us, how we pay today works just fine. Because those of us who talk about mobile wallets are pretty much all payments geeks, we have a hard time understanding this even though we know it. Despite what rational observation tells us, deep down inside we just know that given the right combination of factors, the majority will recognize that we are right.

This affects the smartest of us, something I realized the other day when reading Karen Webster’s recent piece “Are the Best Days Over for Digital Wallets?“. Now of course Karen doesn’t believe the headline– she’s great at writing catchy ones– but couple of points really struck me. One, she complicates the topic–unusual for her but a frequent problem for those who know a lot about a topic. Editing is hard.

But more striking was the centrality of payments, and core payments participants, to her piece. Consumer and merchants get mentioned, but pretty much only as bits needed to make the payment stuff work.

I don’t mean to pick on Karen, whose writings I read with alacrity. The payments-as-lodestone view is endemic. Dave Birch, one of the best business thinkers I know, constrains himself in the same way.

This, I think, misses the point. For mobile wallets to succeed, payments need to disappear into commerce. Recall the Starbucks “wallet” started as a loyalty program, with payments being added late; the Chipotle app is all about getting a meal quickly. Uber is about better transportation. And the pure-play Square payment wallet is no longer being offered. I love paying with my face, but I am a payments geek.

Whenever the words “mobile payments” get used in my presence, I try and change it to “mobile commerce”. This, in a country like the US, will carry the day– not any particular technology. I tell merchants the less they have to think about payments the more than can concentrate on their core businesses: producing/selling goods and services. The sooner payments folks can accept that payments are not primary to adoption of digital wallets, the sooner we’ll be heard outside of our own payments world.


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