Despite the hype, mobile wallets have not yet spread like wildfire among U.S. consumers. Many consumers still haven't yet been convinced that paying with a mobile device is any more convenient than using their credit cards, or even cash.
I recently spoke with Tom Kunz, SVP of digital channels for PNC Bank, about the state of mobile wallets for the upcoming September digital issue of Bank Systems & Technology. He believes mobile wallets will only achieve widespread consumer use when the different players in the mobile wallet ecosystem cooperate on some basic standards in order to bring the technology to scale.
"I do see convergence happening, but it's probably a couple of years away," Kunz says. "I think the plumbing of the cooperation will be laid over the next year or so -- figuring out things such as standards, security, network rules, card not present rules -- and then what will be left is the business arrangement."
Kunz also believes that mobile wallets will catch on with consumers in a greater capacity when providers and merchants more fully take advantage of the technology available in mobile devices to offer functions not available with plastic cards, such as using geo-location technology to alert consumers of deals at nearby retail locations. Kunz also does see the cloud-based wallet as the "end state" and becoming the most popular mobile wallet technology, though he adds that "the QR code has a longer shelf life than any of us expected, and NFC has a longer tail than anyone predicted."
Ultimately, Kunz believes the mobile wallet will become the primary payments method for consumers, simply because mobile is already transforming many other aspects of how people live their daily lives.
"Mobile is a catalyst in every industry to reinvent the way you do business with your customer," he says. "Payments will be a by-product of that."