Simple Swiping

(This is a response to an article in the New York Times titled "As Phones Become Mobile Wallets, Businesses Want a Share." The authors were Tara Siegal Bernard and Claire Cain Miller. You can find the article here.)


Credit and debit cards fill wallets. Known to be easily accessible and less bulky than a wad of cash, these small plastic cards have taken over the world. Visa, Mastercard, Chase, American Express and many other companies rule the buying power. Swiping a credit card takes seconds to process while pulling out the correct amount of cash can slow things down. Credit cards have proven to be vital to consumers, but a new type of buying method may be taking over. Cell phones could be the new credit card.

[Google]

Instead of swiping the credit card, the cell phone would simply have to be waved. The technology is out there to make this happen, but big companies are battling for who gets dibs on the most cash. The companies include mobile phone carriers, credit card issuers, banks, retailers and technology companies. The solution of where the money will go and how it will be divided must be decided upon before more steps can be taken. 


Chief executive of mFoundry, which makes mobile payment software for merchants and banks, Drew Sievers said, "“It all comes down to who gets paid and who makes money, you have banks competing with carriers competing with Apple and Google, and it’s pretty much a goat rodeo until someone sorts it out.”


Now that the technology for 'mobile wallets' has finally come about, the pieces are falling into place. Although it is still unclear how the players will get paid, meetings are being held with the biggest companies in order to come to an agreement. Currently, several companies are coming together in order to sort out the kinks. Verizon, AT&T, T-Mobile and Discover are creating their own mobile wallet that should be out in early 2012. 


Although the idea behind mobile wallets is intriguing, a lot of issues must be worked out. 
Executive creative director at the design firm Frog Design Jan Chipchase said, "“Is it possible to make a system that’s too easy to use, where you reduce so much friction from the transaction process that people aren’t necessarily aware of what they’re spending on something?”


After taking the Dave Ramsey course in high school, I learned that spending cash is neurologically registered as pain. People have a much harder time parting with their visible cash than charging the purchase to a piece of plastic. Many Americans are in enough debt as it is. Also, the problem with dividing the money between the companies will be a meticulous process. Retailers must also acquire the machines necessary to use the mobile wallets. Ultimately, the consumers will decide whether or not the mobile wallet is a hit or a flop. Until then, credit cards will be swiped.