Payment technology

TSYS: Mobile wallet adoption lags without integration of personal ID

Mobile WalletTSYS recently released a whitepaper discussing the future of mobile wallet adoption and acceptance among merchants, indicating that until mobile wallet developers can fully replace the physical wallet, adoption will likely be hindered.

The study examined the mobile wallet market and the evolution of the mobile wallet to reveal consumer insights and needs.

“U.S. mobile wallet providers have struggled to win over consumers,” Chris Colson, the director of innovation at TSYS, said. “With this study we looked to discover what will compel the U.S. market to enthusiastically adopt mobile wallet applications. The findings were surprising.”

According to the findings, consumers want a mobile wallet that will not only allow them to store their credit and debit cards but can eliminate the need for a physical driver’s license and other personal identification.

“Federal government entities issue various personal identification documents, such as green cards, voter registration and licenses,” the study said. “This suggests that mobile wallet developers would likely want to partner with government agencies, particularly states’ departments of motor vehicles, when building their solutions.”

The study pointed to a high level of “perceived convenience” of using a physical payment card, indicating that the current push for mobile wallet adoption “may be trying to solve a problem that does not actually exist.”

“From a consumer perspective, the added convenience of using a mobile wallet for payments is absent if they still need to carry a physical wallet for other items they are reluctant to leave behind at home—particularly their driver’s license,” the study said. “If consumers have to carry both a mobile and physical wallet, adoption and usage rates of the mobile wallet are likely to remain low.”

The study showed that mobile wallets like Google Wallet, the Isis mobile wallet, and Apple’s Passbook do not offer a full scope of services to encompass all the purposes of a physical wallet. Additionally, Google Wallet and Isis require an NFC-based point-of-sale terminal, which are rare, according to the study.

While many retailers have not yet adopted NFC capabilities, the study pointed to data from telecom research firm Berg Insight, which showed adoption of the technology will grow at a compound annual growth rate of 46 percent between 2012 and 2017, and 82 percent of POS terminals in North America will accept NFC payments by 2017.

“The big thing missing from today’s mobile wallet solutions is the integration of personal identification…” the study said. “This could be solved, however, by collaboration between government agencies, mobile platform providers, wireless carriers and the financial services industry.”

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