Across the US, and the world, how we pay for everyday items has evolved dramatically over the past 30 years. In recent years, our options regarding methods of payment have increased dramatically. This might soon include the option of paying with a simple wave of a hand thanks to Chicago based startup Keyo. However, as we move into the future, it appears that the US adoption of this new technology is not as quick as we might have expected.
According to headlines, the US is still lagging behind with its use of mobile payment technology. Forrester Research previously predicted in 2015 that mobile wallets would become a marketing platform in their own right by 2020, expecting growing adoption, reports Payments Journal. This has not been the case and giants within this industry such as Apple have actually lost customers.
Ironically, other forms of payment such as Bitcoin and other cryptocurrencies have whipped up a storm of attention, which has sent its price skyrocketing. It may be fair to assume that all the hype surrounding cryptocurrencies has drawn attention away from the potential of mobile payment technology.
To get a better idea of why mobile payments have witnessed such slow adoption, we spoke with Drew Sementa, CEO of Tidal Commerce, a merchant services company based in Illinois, who said “I think what really drives the low adoption rate of mobile credit card payments in the US is a lack of education about why these mobile wallets are beneficial to the customer, as well as the merchant. Compared to China and European countries, Americans don’t have an understanding of how these digital wallets work, and this hinders adoption.”
“Additionally, for merchants, the adoption of this technology often requires upgrades or replacements of existing POS systems. The US restaurant industry is seeing one of the slowest adoptions of EMV compliant payment terminals because restauranteurs are hesitant to replace their systems. If merchants aren’t adopting EMV compliance, they certainly aren’t adopting mobile payments like Apple Pay,” adds Sementa.
He also says “Finally, the US lacks one or two big players in the mobile payments space to spur mass adoption. Companies like Apple Pay or Samsung Pay or Google Wallet are vying for control of the market, where in China for example, Alibaba’s Alipay or Tencent’s WeChat Pay reign as kings”
Evidently, the idea of mobile payments is not dead, it is just slow. If we give it more time it may blossom into a cultural norm that is deeply entrenched in our daily routines.