Are mobile payments just technology for technology’s sake?
My wallet contains a few things that have questionable futures: gift cards to various stores, loyalty cards from a few retailers and even – gasp! – a library card. Sorry, I’m showing my age again.
These things will all be digitized sooner or later, if they haven’t been already and I just haven’t gotten around to installing the requisite apps.
There are also a few permanent residents. My driver’s license, health card and medical insurance card go with me wherever I go, because you never know when they’ll be needed.
There’s also my bank card, for withdrawing cash. That money is also a wallet mainstay, although it does a good job of escaping despite my best efforts.
The ID and insurance cards have a relatively safe future because, if there are two entities that can be counted on to stay well behind the times, it’s government and health care.
Cash isn’t going anywhere either, mainly because there are situations where it’s still king: quick transactions where you don’t want to go through the hassle of hauling out your credit card; for small amounts where that makes even less sense; or even for tipping.
All of this is to say that the physical wallet – that leather thing that men carry in their back pockets and women stash in their purses – will continue to be part of our lives for the foreseeable future, despite the encroachment of its digital equivalent on smartphones.
In October, Apple will launch its effort in the space, Apple Pay, which uses near-field communications technology and the iPhone’s fingerprint sensor to allow for quick, tap-and-go transactions. The company has partnered with several U.S. banks for the initial go and has lined up a number of retailers, including McDonald’s, Toys R Us and Bloomingdale’s.
The assumption is that mobile payments will soon become mainstream because, well, it’s Apple that’s doing this. Sure, NFC-enabled payment systems have been around for years on Android, but this is Apple we’re talking about. Millions of iPhone users will flock to the new system.
Apple Pay’s success is not a safe assumption, for several reasons. For one thing, as Neil Irwin writes in the New York Times, mobile payments are seeking to solve a problem that really isn’t one. Paying for things with cash or a credit card really isn’t one of life’s major inconveniences, a fact that colours mobile payments as technology for technology’s sake.
More to that point is everything mentioned above. Unless Apple can somehow convince governments and health care providers to digitize their identification documents – and a sincere “good luck” on that one – and unless it can somehow eliminate cash entirely, which is perhaps the even taller ask, there will always be a reason for people to carry wallets.
And if they’re already carrying wallets, which likely already contain cash and credit cards, do they really need to add a third?