Why Mobile Payments Will Fail

If you aren’t familiar with the concept of mobile payments, here’s a quick little rundown of how they work.

First, you must sign up with any number of services out there such as Google Wallet or Isis Wallet. These serve as your “bank” in which you can deposit money or have it transferred from your “real bank,” the one that you can touch and walk into. The services I’ve used have also given me up to $30 on my accounts just to get things going and to see how convenient it is. Free money.

Second, you need to have a compatible smartphone equipped with NFC (Near Field Communications). Using your virtual bank’s app, this allows it to communicate with the point-of-sale PIN pad and will deduct the purchase total from the balance on your account.

Finally, you need to find a retailer that is capable of processing payments via NFC and more often than not, each service’s website or app will find every one that is around you.

And that’s the start of the trouble.

Don’t get me wrong; I love the concept of mobile payments. I’ve used it on a number of occasions and it’s quick and easy – when it works. I’ll get to that later.

But first, let’s look at vendors. One of the first things I noticed was that it’s not everywhere and mostly, not in places I’d frequent. For example, looking at one app’s map of vendors, the following are listed:

• A smoke shop
• Dry cleaners
• An eyebrow threading service

I’m pret-ty sure I won’t be using any of those soon, and the places where you’d think mobile payments would be handy don’t have it. Grocery stores would be one of those places and there’s only one local chain that is mobile wallet-friendly (and it’s not my company). In short, there’s just not enough useful NFC POS vendors around. Not even any of our local coffee houses, including that evil Seattle-based giant, accepts them. On the other hand, there are some soda vending machines that accept mobile payments and that could come in handy should you not have any cold, hard cash on you.

The second and final reason I think this concept will fail is this: not enough vendor education. I’ve been to places that accept mobile payments and when it came time to pay, the employees looked at me as if I was Mr. Spock standing there with a lightsaber (yeah, I know, blah blah blah). While there are only a handful of places that do accept them, finding an employee who actually knows how to process them, let alone knows what the hell it is, is indeed rare.

This happened to me yesterday at The Flame Broiler. I placed my order and when it came time to pay, I showed the cashier my phone indicating that I wanted to pay via my mobile wallet.

Deer in headlights. Complete silence. Utter disbelief. Smeckeldorfed.

They had absolutely no clue how to run it so I had to pull out my debit card and pay with real, physical plastic. I wanted to avoid this because I got $20 added to my virtual account when I opened it so I thought, “Hey, free meal. Dinner is on me tonight!”

Yeah. No. And this wasn’t the first time this happened to me, either.

While a great concept, I get the feeling that these problems will ultimately lead to its demise. Don’t say I didn’t warn you.