Mobile wallets have made waves since Google launched its version in 2011. Personally, I think it’s a great addition to the up and coming smartphone culture. People are rarely without their phones, why not also make it their wallet. It would be so convenient — the buzz word for millennials. The problem is security and getting consumers, merchants and manufacturers to embrace it.
Security issues are something the providers are aware of and actively addressing. Google holds information on secure servers and encrypts payment information with SSL. Isis, which announced a national rollout of its mobile wallet in July, places the card information on secure element chips on the phone with changing security codes.
As for the world embracing the technology, a recent whitepaper by Dominic Hofer, CEO of Loylogic, claims that loyalty programs will drive digital wallet growth. Adding the ability for consumers to redeem loyalty program points while paying with the mobile device will provide enough incentive for consumers to change their behavior, merchants to change their point of sale systems and handset manufactures to change devices. Already, this has begun. Mobile payment provider Isis has partnered with Coca-Cola so consumers using bottler vending machines, and who pay with their smartphone, can earn My Coke Rewards towards a free beverage.
USA Technologies also announced a new loyalty program with Isis — the ‘Fifth Vend Free’ program. Customers are eligible to receive free products from a vending operator based upon loyalty rewards earned by using the Isis Mobile Wallet™ for purchases at a qualifying terminal.
Most micro market kiosks already allow customers to pay by smartphone, usually through a connection to their personal micro market account.
For those who point to the rather slower-than-expected mobile wallet adoption, I point to recent figures showing an increase. A 2012 Toluna QuickSurveys poll of mobile payment adoption by age group showed those aged 18 to 34 were increasingly reliant on mobile payments with 44 percent reporting they preferred to pay with a mobile phone.
A recent statistic put the purchase of smartphones (iPhones specifically) higher than babies born per second, world wide — 4.6 compared to 4.2, respectively. And smartphones are popular across many age ranges, which can’t be said for other types of technology. Even in vending, the number of users who read VendingMarketWatch Daily Update or visit the Website from a mobile device has increased. Mobile to vending, or M2V is just a matter of time.