Mobile payment solutions are few at the moment, but that will surely change in the next couple of years, according to panel of e-commerce and tech executives at the Open Mobile Summit in San Francisco on Wednesday.
A credit card loaded on a Nexus S phone through Google Wallet. (Credit: Sarah Tew/CNET)
But don't expect a giant war of mobile wallets just yet. Most of the panellists generally agreed that there might be room for multiple solutions, depending on the varying needs of consumers and merchants.
"It's kind of like 1994, and we're calling it the 'website wars'," said Osama Bedier, vice president of payments at Google. "I believe there will be multiple wallets, and I think that's good for consumers, good for the space."
Inevitably, the solutions that consumers will react to are what will drive adoption, he added. From a Google perspective, Bedier explained that his team is looking at building richer experiences, saving time (ie, skipping the line at Starbucks) and fulfilling consumer needs.
Visa's global head of mobile, Bill Gajda, agreed that there will be a number of wallet strategies as the market grows.
"But for the vast majority of merchants, it's going to be based on the vast broadness of the commerce experience," Gajda posited, explaining that there will also be certain categories of merchants (ie, mass transit agencies) where speed will drive a real desire for — and even need for — mobile wallets.
Gajda offered a couple more reasons as to why mobile wallets are starting to grow: the cost of infrastructure is coming down, as well as the broader business case where merchants can have more real-time, richer experiences with customers driven by mobile technology overall. He also threw in that Visa recently introduced an incentives plan for merchants who are proactive about installing the technology.
Dickson Chu, managing director of global enterprise payments at Citi, asserted that from Citi's standpoint, at a really kind of minor level, it's really just an evolution from paper and plastic to ATMs, e-commerce and now mobile.
"A lot of our customers conduct their everyday life on this rich, powerful device [the smartphone]." Chu said. "That's becoming a point of transaction. Our customers are engaging in that, so we want to be a part of that."
Nevertheless, when it comes to consumers (at least in the United States), many of them prefer to stick with just one vendor in a particular industry.
"We're going to have multiple wallets offered to us, but, as individuals, we're each just going to pick one," predicted David Marcus, PayPal's vice president of mobile. He added that at the end of the day, people are just replacing a plastic card with silicon on a smartphone.
"Merchants are experiencing more and more of the multi-channel reality," Marcus asserted, whether it be online, in-store or beyond, explaining that they want to enable features to know their consumers better.
But Chu pointed out that not every merchant is engaged in the kind of business that is driven by offers and the like, and, for them, driving more discounts is just the way to the bottom.
Bedier argued that what will happen is more simple than that; merchants will respond to whatever generates sales and how efficiently it does that.
Naturally, when it comes to anything related to mobile payments these days, the discussion turned to near-field communications (NFC) technology.
Gajda pointed out that PayWave is a product that is focusing on this for the near-term. Although it's generally not used by even close to the majority of consumers — either in the US or worldwide — Gajda theorised that mobile wallets have the potential to go where physical cards don't today.
Bedier later added that NFC is a type of technology that fills a very unique gap — not to mention that it's the power behind Google Wallet.
A primary example of where NFC could really make a difference would be person-to-person payments, which still mainly take place via cash or cheque. For the time being, mobile person-to-person payment is a method that doesn't really exist yet, with the exception of third-party and accessory solutions from developers, such as Square.
PayPal, for the most part, has been skirting around NFC, and made it clear that they have other solutions that could work just as well — at least for the near future.
"If NFC works, great. If not, we'll have other methods of payment available for customers," Marcus said. "We're not going to wait until NFC comes of age. There are so many industry companies that are looking at this in different ways."
Via ZDNet US