Mobile wallets on hold [Telegraph-Herald (Dubuque, IA)]
(Telegraph-Herald (Dubuque, IA) Via Acquire Media NewsEdge) on the go Here are four examples of mobile payment systems. Google Wallet: A mobile payment system that enables users to store debit cards, credit cards, gift cards and other payment options in a smartphone Isis: A joint mobile payment venture between AT&T, T- Mobile and Verizon, announced in 2010. Lemon Wallet: An app that enables users to store digital copies of payment cards in their smartphone. PayPal: A business that performs payment processing for electronic consumer transactions.The day when most people go shopping and leave their wallets at home - as long as they bring their smartphones - remains an idea for the future and not the present.
Also known as mobile wallets, e-wallets or mobile payments, the digital wallet concept describes a system of cashless commerce using technology.
"It's been talked about for a while," said James Wester, a research director for the independent consulting firm IDC Financial Insights. "Mobile payments has been the 'next big thing' for several cycles of next big things."
Wester previously served as founding editor of Mobile Payments Today, a news site dedicated to mobile payments and commerce. He said such electronic-only transactions are complicated.
"For it to work, consumers and merchants have to feel comfortable, and all of that takes a lot of time," he said.
Mobile payment systems such as Google Wallet haven't piqued consumers' interests enough to become mainstream.
"What we need is for consumers and merchants to find a compelling reason to use digital wallets," Wester said.
Increasing smartphone use could provide one of those reasons.
"As long as we stay on track to continue using our smartphones as mini-computers - and the smartphones get faster and better, digital wallets will become more and more popular," said Alan Garfield, head of the Computer Graphics and Interactive Media Department at the University of Dubuque.
"The convenience cannot be beat, but the dangers are there as well."
The digital wallet concept includes software that acts like a physical wallet when consumers make electronic commerce transactions. The software typically includes encrypted payment information as well as purchaser's identification.
"Really, it's all about protection," Garfield said. "And we have demonstrated that we trust credit cards, given the protection we need to have, so we will use digital wallets as well."
Wester notes many consumers already carry cashless payment options in their physical wallets - in the form of multiple credit cards.
"For a new way to pay to become attractive, it has to be better," he said. "It will probably be something along the lines of making shopping cheaper."
Such a system might include instant offers, coupons or other enticements.
"Merchants will need to see those incremental gains in sales," Wester said. "That's what most digital wallet providers are working on right now."
Until then, Wester suspects widespread digital wallet usage will remain a future phenomenon.
"We're a couple years off before you pull out a phone to make a payment and it doesn't look remarkable," he said.
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