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Why Mobile Wallets Are Doomed 272

Posted by Soulskill
from the all-about-the-mobile-benjamins dept.
redletterdave writes: "The other shoe has dropped for Square. The once-hyped mobile payments company is killing off its Wallet payments app and replacing it with a new app called Order, which will allow users to order food and beverages ahead of time at their favorite cafes and restaurants. For entrepreneurs, the concept of a mobile wallet seems so logical that the payments industry looks like it's ripe for disruption. If everybody is always carrying around a powerful computer in their pockets, it's natural to consider loading payment information onto that secure device as an alternative to cash or plastic cards. The problem comes when this logical entrepreneurial spirit merges with an industry segment that is classically illogical. The payments system in the United States is a mess of entrenched interests, fragmented business opportunities, old infrastructure (like point-of-sale systems), back room handshakes and cut throat competition. This behavior is not going to change any time soon, which means mobile wallets like Square are going to continue to struggle — at least until a more legitimate, easy-to-use and cost-effective solution comes along."
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Why Mobile Wallets Are Doomed

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  • by alen (225700) on Tuesday May 13, 2014 @02:14PM (#46992505)

    why is paying by phone so much better than with plastic?
    i do it starbucks for the rewards
    only other reason is if a food truck took cards instead of cash. why do it anywhere else?

    for the retailers its more money to spend with no return on investment

  • Re:You mean.... (Score:2, Insightful)

    by Anonymous Coward on Tuesday May 13, 2014 @02:14PM (#46992513)
    Cryptocoins are a solved problem. It's being able to store them securely that is the problem. They draw hackers like moths to a flame.
  • Regular Wallet (Score:5, Insightful)

    by PvtVoid (1252388) on Tuesday May 13, 2014 @02:17PM (#46992543)
    If I have to carry something around in order to pay for shit, a regular wallet works just fine. With actual cash in it.
  • by Anonymous Coward on Tuesday May 13, 2014 @02:18PM (#46992559)

    so your the one guy in the line of 20 in the morning that sits there dicking around passing his phone back and fort while we all wait to pay with actual money in a timely fashion

  • by Maltheus (248271) on Tuesday May 13, 2014 @02:18PM (#46992569)

    I barely trust using my phone to log into a social network, let alone anything that might cost me money. With every app attempting to spy on each other, I would never trust my phone for financial transactions. Not for many years to come.

  • Re:Regular Wallet (Score:5, Insightful)

    by Noah Haders (3621429) on Tuesday May 13, 2014 @02:19PM (#46992583)
    even if you have a mobile wallet, you'll still need your plastic CCs as well. and debit card. also, wallets have driver license, insurance cards, etc. and cash. so there's no way to replace your regular wallet with your phone. so what's the benefit to consumers?
  • by onproton (3434437) <emdanyi@gmail. c o m> on Tuesday May 13, 2014 @02:21PM (#46992603)
    It's not like swiping your credit card in the 'traditional' manner is much better.
  • Re:You mean.... (Score:5, Insightful)

    by SpankiMonki (3493987) on Tuesday May 13, 2014 @02:23PM (#46992623)

    Cryptocoins are a solved problem. It's being able to store them securely that is the problem.

    IOW, the cryptocoin problem isn't solved.

  • Re:You mean.... (Score:4, Insightful)

    by GameboyRMH (1153867) <gameboyrmh@gmaiWELTYl.com minus author> on Tuesday May 13, 2014 @02:26PM (#46992663) Journal

    "Oh sorry you'll have to send me more money, the value of this cryptocurrency dropped 20% in the 5 seconds it took to process the transaction."

  • by Anonymous Coward on Tuesday May 13, 2014 @02:29PM (#46992695)

    Is that I have to plug them in to charge for 3 hours before I can use them to buy a coffee...

    The first time I get stuck somewhere because my phone died and I was unable to pay for a bus or taxi is also the last time I rely on mobile payments.

  • by NotSanguine (1917456) on Tuesday May 13, 2014 @02:34PM (#46992741) Journal

    Please. This is a "solution" in search of a problem. And not even a good solution. All the CC companies in the US are (finally) being forced to implement chip-and-pin. Do you really think they're going to switch off of that for something even less secure than a standard CC? Not that they really care about security.

    Besides, There are so many entities (not counting the malicious ones) tracking what goes on your smartphone, do you really want to trust your money to an app on one of these? If so, please use my app. It's complicated to set up, so please send me all your financial information and I'll get things going for you. You may notice some charges or emptying your bank accounts, but that just me making sure everything is working properly.

  • by fermion (181285) on Tuesday May 13, 2014 @02:37PM (#46992777) Homepage Journal
    Mobile wallets have not provided inconvenience for consumers. In most of these case where widespread adoption has not occurred it is because the entrepreneurs are trying to get the consumer to adjust to their business model instead of working a business model that suites consumers needs. We say this a lot in the late 90's when companies would create web sites that just mimicked the corporate org diagram. Unless you were part of the organization, there was no way to figure out where anything was. Bad web developers still do this.

    There are specific examples the implementation fails. For instance Starbucks has a good implementation, but many Starbucks does not accept the card. Why am I going to have something that is useless. It also by default wants to annoy you every time you go by a Starbucks. We see the same thing with CVS. It is nontrivial to pull up the card, and easier just to type in a phone number.

    Most of the digital wallet is just gather information on consumers without providing value in return. Like a grocery store loyalty card. Sure, some are going to use it. Some are going to shop at the store because of perceived value. But many are going to the store that just provides simple service. Walmart does not have a loyalty card.

  • by alen (225700) on Tuesday May 13, 2014 @03:02PM (#46993047)

    i suspect that like with the internet of things, the consumer feature was secondary to the primary feature, to get your data

  • Re:You mean.... (Score:5, Insightful)

    by Archangel Michael (180766) on Tuesday May 13, 2014 @03:07PM (#46993115) Journal

    Rapid Price Changes are part of a infantile system. As the system matures, and becomes wider spread, pricing will stabilize. The problem is what to do in the meantime. Right now, people with patience will make a minor fortune, provided that the market exists in the future. In the mean time, it is not for the faint of heart.

    If I were a merchant, I would be accepting BitCoins as fast as I could, as the opportunity is there right now, with enough patience.

  • Re:Sure it is (Score:5, Insightful)

    by lister king of smeg (2481612) on Tuesday May 13, 2014 @03:28PM (#46993307)

    Sure it is. If a hacker gets my CC info and makes charges, my loss is limited to hassle and frustration. If a hacker gets my BTC info, I lose my BTC forever. That makes BTC like cash, which sure can be stolen, but to steal my cash you have to walk up to me and get my wallet away from me. A wallet thief can only rob a handful of people per day, whereas a BTC thief can take a hundred million dollars from ten thousand people in one night.

    There are lots of tradeoffs for all these different systems. None of them are exactly perfect but none of them are worse than all the others in every way. Each has different strengths.

    Do you keep your entire life savings in cash in your dead cow wallet? no? then why would you keep it all in your mobile cryptocurrency wallet? have a offline wallet at home for you savings and carry you spending money in you mobile wallet problem solved.

Every nonzero finite dimensional inner product space has an orthonormal basis. It makes sense, when you don't think about it.

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