Are There Just Too Many Mobile Payments Options?

October 3, 2018         By: Steven Anderson

Hoist with his own petard. That’s a quote that’s had classical literature students scratching their heads for years. Leave out the history of the small bomb known as a “petard” and the phrase boils down to “his own efforts wound up hurting him instead.” This is the concept that’s leading some to wonder if mobile payments aren’t actually hurting themselves by offering too many options to keep straight.

The concept has some surprising support. Mobile payments, for example, make up less than a whole number percentage of in-store transaction volume in the US. Moreover, the likelihood of customers actually using a digital wallet is either flat—as found by 451 Research—or on the decline, as noted by Auriemma Consulting Group.

The report further notes that mobile payments are doing well on some fronts. In-app payments, peer-to-peer, and online are seeing brisk business. It’s mobile payments at the point of sale that seem to be getting sluggish, and the report points to the fragmented nature of the market as perhaps the biggest culprit.

Not only were there customers for Android devices in general, but also users on various specific devices—LG Pay, Samsung Pay, and the rest—along with Apple Pay. Throw in a host of store-branded apps, and the consumer may well have choked on the flood of options.

Worse, there’s not even a clear problem to solve here. Americans were doing just fine with cash and credit cards, so mobile payments had to offer up a new selling point, commonly built around convenience.

Basically, mobile payments are solving problems. We’re seeing them used heavily for in-app and P2P scenarios, and with good reason. We’re seeing them used for online shopping thanks to the convenience factor. And we’re not likely to see them in stores until they actually solve a problem. Look at the use cases we’ve seen with people able to use mobile payments systems like a portable checkout stand. That’s where mobile payments will really shine.

It’s not a problem of too many options, but rather, a problem of too many options that don’t address a problem. Paying with your phone for its own sake won’t pull a lot of users. Paying with your phone to avoid the checkout line, now, that might pull some user count.