The last couple of years brought about lots of change and hope into the payments industry, especially in the area of mobile payments. ApplePay, AndroidPay and SamsungPay mobile wallets got released to the general public. Often with too much fanfare, heavy marketing push by payment networks, mass media and with high expectations. But mainly it has been series of disappointing launch experiences across the board so far. None of this ‘EMV on top of NFC' rebranding (yes all these are EMV derivatives - one way or another) into ‘WhateverPay’ has delivered expected breakthrough usage statistics and transaction volumes so far.

Although there is still lots of enthusiastic people around who believe that something will miraculously change overnight, I am cautious about the whole thing now. Let’s face it – it is a basically the same struggle that the payment industry has been facing and going thru since the very early days, back in the early 2000s, when handful of excited payment enthusiasts started playing with utilitarian Nokia 61XX NFC capable phones. However nobody (outside of inner technology circles) cared much about mobile payments back then. The UX on those phones wasn’t great anyways. So mobile pioneers thought maybe that was the main reason for general public lukewarm (non)reaction.

After powerful smartphones came about, mobile payment industry’s hopes got significantly higher again, but nothing really materially changed over the years - still it seemed that nobody (outside of our technology circle again) cared much about mobile payments. Yes, UX got significantly better and vastly improved, but innovators all thought (oops, sorry again trying to find excuses) that it is simply because Apple did not support NFC in their iPhones of the time and also because the MNOs, Payment Networks and Issuers could not agree on the sensible business models around NFC enabled SIM ownership and control, on Android side of things. Made sense, right? 

Finally Apple embraced NFC (back in Fall of 2014) and Google incorporated HCE framework support in Android 4.4 and beyond. Both ‘culprits’ and obstacles behind the alleged adoption resistance got removed. New iPhones now support NFC and have embedded Secure Element, plus issuers do not need to worry about collaboration with MNOs, since on Android platform they can simply use the HCE and go around SIM SE. Finally moving the needle? Not really, since it still looks that the mobile payments continue to struggle, relative to the opportunity at hand, simply because the whole thing has been approached in an ad hoc, potentially egoistically erratic and non systematic way.

Why is Apple trying to portray itself as mobile payments company by pushing ApplePay? Why do we have AndroidPay and SamsungPay pushed as separate mobile payment brands as well? Why do MNOs and card issuers try to rebrand themselves also as mobile payments providers? Most of these players have in fact painfully failed to capture critical mass of consumers so far, despite their respectful high tech pedigrees and vast payment industry expertise.

Perhaps time is coming for reviewing lessons learned. I hope so. To me it is becoming painfully obvious that average smartphone users may not care particularly about ApplePay, AndroidPay, SamsungPay, SureTap or any of the card issuer’s provided mobile wallets. Why would they? What does it give them? Just opportunity to replace their wallets with smartphone wallet? Hm maybe, but they are not connecting with the official marketing message obviously and I do not see they will anytime soon. They still need to carry around their leather wallets for 20 other non-payment cards. Why bother then?

Now let’s take another look around the corner - at Starbucks use case. They have very basic mobile app primarily for collecting and managing Starbucks points, with clumsy (non mandatory btw) QR code based payment functionality addition, as an option. It is based on closed loop, basic proprietary prepaid type payment rails. No rocket science. Starbucks will also happily accept all types of payments - cash, plastic card, Starbucks's own QR code payment or payment using any available third party NFC mobile wallet. But loyal Starbucks customers primarily use Starbucks mobile app. Interesting. No push, no desperate incentives like ‘20$ for you or free this / free that if you use my app’ to lure consumers toward their app. The switch toward Starbuck's app simply and quietly happened, without any media hype and also not overnight, but with masses of Starbucks customers using it everyday, because it appears to make sense to them every time they use it. Pretty much none of these consumers switched to more advanced mobile wallets based on NFC, regardless superior security of NFC and IMHO much better payment experience (tap vs scan). Many of the alternative NFC mobile wallet options have been certainly available for a long time already. And let us make no mistake – Starbucks customers are probably the most tech-savvy and most of them know for sure everything about NFC, Apple/Samsung/GooglePay(s). But they keep staying loyal to low tech Starbucks app.

This is basic common sense and important lesson learned. Let it go Apple, Google, Samsung, MNOs and card issuers. For you it will always be much harder to motivate average users to switch to current caustic and dry mobile payments wallet apps. Nobody cares just about having mobile payment form factor at the front end – and also pretty much no consumer cares what happens after payment is initiated. Consumers just want to pay to the goods they just purchased from the MERCHANT. As such, payment steps (although still prominent) are pretty much invisible to most of consumers since it’s been natural part of the overall SHOPPING EXPERIENCE, even with their low-tech leather wallets – despite the need to pull their payment device of choice and use it. It’s like driving the car – you naturally keep pressing accelerator and brake pedal, steer the wheel, turn the wiper blades on/off, all without sometimes even being aware of it. We did not scream in last 15 years we need pedal-less and steer-less cars, did we?

Maybe it is time to leave it up to the individual MERCHANTS to fight it out and bring consumers to THEIR mobile apps over time (for shopping in their online or physical stores), because consumers usually react positively when something appears to be useful and beneficial for them. MERCHANTs may be best positioned to offer meaningful things to consumers. In my opinion, Apple, Samsung, Google, MNOs, payment networks and card issuers shall instead refocus and help MERCHANTS (behind the scenes) achieve that goal, by providing an INTEGRATED FRAMEWORK with standardized mobile payment wallet APIs that merchants would use to enable consumers paying with their mobile phones thru MERCHANT APP as part of the overall SHOPPING EXPERIENCE, seamlessly and naturally, online or in-store, whenever, wherever - omnichannel.

Apple/Samsung/Google/MNOs/Issuers should rethink pushing THEIR BRANDED and pretty much useless mobile wallets and instead shall work with payment network and issuers to provide to merchants invisible mobile wallet API plumbing on the front end and reliable and cost efficient payment rails behind the scenes on the backend. Let the consumers decide which of the merchant’s app would be useful to them, which of their cards they put into the 'invisible' mobile wallet behind the app (depending on the phone platform), and which one is at the top of the wallet. And the 'invisible' mobile wallet would be plugged-in to every single merchant app on the consumer's phone.

I know this maybe easier said than done, since high tech and payment industry execs’s egos might be at stake, plus card issuers want THEIR cards being at the top of any wallet, etc, etc. However truth is never easy to swallow and it seems that simply pushing consumers toward currently available mobile wallets provided by NON-MERCHANTs doesn’t work. Sooner this paradigm shift in thinking about mobile payments happens it may be better for the mobile payments adoption.