Where might mobile wallet war lead?

Many experts agree that in the near future, millions of Americans will turn to their smartphones as a means of making everyday purchases on their credit card accounts, but there is a significant divide related to how that will come about.

Mobile wallet technology, much like mobile banking before it, is a hotly debated topic among experts in a number of industries, according to a report from the Huffington Post. Because there are now so many companies pouring into the field, and either developing their own digital payment system or helping to foster those being created by others, there has been a considerable amount of disagreement about which kind of technology, and which specific systems, might eventually capture the public’s interest and loyalty going forward.

Are these predictions accurate?

The problem with these kinds of predictions is that there is no real way to tell where the industry as a whole might go, and who might someday enter the game, the report said. For one thing, there are so few systems actually available right now that accurately judging them in comparison with one another would be extremely difficult. For another, because there are relatively few barriers to entry into the mobile wallet industry, and even fewer once the infrastructure is in place, innovation could come from virtually any company.

Right now, tech firms, mobile phone service providers, credit card payment processing companies and even major retailers are all developing their own systems, and all carry big names, such as Google, Verizon, Visa and Walmart, the report said. Because of this, it’s unlikely that any single mobile wallet system will ever become ubiquitous, or even gain a serious advantage over the others. And because of the wide variety of participants, there likely won’t even be a way for service providers to block use of competitors’ programs.

Mobile wallet technology is now seen in much the same way mobile banking was a few years ago: It can be extremely successful and helpful to consumers once widespread adoption takes off. Until that point, though, it’s unclear exactly how smartphone users will take to it. Fears over the security of these systems are seen as the biggest hurdle to adoption, especially because the current lack of availability of necessary technology won’t be a problem within the next year.

Posted in Finance
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