Digital Wallet

// Posted by on 03/04/2013 (12:11 AM)

The idea of paying for things with a phone instead of your wallet is still unfamiliar to most people, but now Visa and Samsung Electronics are working together to make mobile payments easier. The companies said that many new Samsung phones would incorporate Visa’s payments software, called payWave. The software will come installed on all Samsung phones, which allows users to tap their phones against a payment terminal to exchange information.

As our daily lives become more and more reliant on technology the need for simple daily items such as carrying a wallet in your back pocket may be coming to an end.With the technology in place, the Visa payments app could potentially replace a customer’s Visa card. Outside companies, such as  retailers, could also choose to incorporate the payment system into their apps. Over the last year several companies have announced different attempts to mobile payment systems, but the technology has not caught on with American consumers. Analysts say that is in part due to the fact that businesses have not proved that paying with a wallet is more convenient than using cash or a credit card. But it is also because the tech companies, banks and carriers are competing to have their own system gain dominance, rather than working together.

For example, after Square formed a partnership with Starbucks to accept mobile payments, other retailers like 7-Eleven, Best Buy and Wal-Mart formed and alliance to make their own mobile payments network. AT&T, Verizon Wireless and T-Mobile have constructed their own mobile payments network called ISIS, while Sprint offers its own wallet system.

A partnership between major companies has the potential to break this pattern or just to add to the problem of an already ruptured market. Visa executives say there needs to be closer collaboration between companies supplying mobile payments, and the mobile wallet is still three to five years away from mainstream consumption. Jim McCarthy, Visa’s global head of product, said in an interview that working with Samsung, was a big step to helping mobile payments gain traction, given Samsung’s reach and the fact that consumers will not have to choose which payments app to download.

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Christopher said...

An interesting look at a possible future. Great piece.

// 03/04/2013 at 3:43 am

Sam said...

Really cool idea, especially combined with Square (imagine a couple of kids running a driveway carwash and accepting all major credit cards…even though the 2.75% per swipe seems a little high). That being said, I’d be hesitant to stop carrying physical credit and debit cards altogether simply from a practical standpoint. I already separate my cash from my wallet so that if one is stolen I’ll have the other. Having all of your payment options stem from your phone further compounds the “what if” situation of a stolen phone. Now, not only would you be completely without recourse, but it would be even easier for thieves to charge things to your account through a phone app.

// 03/04/2013 at 9:03 pm

Celia said...

I definitely side with Sam on this. I think the idea is practical but in actuality the implementation would be pretty inconvenient. Don’t get me wrong, I love the Starbucks app and its user-friendliness – it’s one less thing to carry. But…in the event of a lost/stolen iPhone (which is a pretty frequent occurrence for college students), someone could rob me for all the coffees I’m worth. I can’t imagine the implications of even more sensitive/costly information being stolen.

// 03/04/2013 at 11:02 pm