Mobile Payments Will Fail Without User Benefit

There’s another mobile payment system launching, this one in the US (or more specifically, just in Boston). But instead of using contactless technology like RFID or FeliCa, it’s a decidedly low-tech operation: users in participating merchants, of which there are currently about 40, call up an 800 number from their mobile phone, punch in a merchant ID number and PIN, then give the merchant the last four digits of their phone number. Some undescribed magic then happens, allowing the customer to leave with their goods and a receipt, with the purchase being charged to their credit card or debited from a prepaid account they can set up with individual merchants. The problem with services like this is they don’t really offer much benefit to the user. It’s hard to see how the process above is any easier than standard wallet-based payment technologies (ie cash or debit or credit cards), and the network’s promise of some sort of loyalty program and coupons isn’t likely to be enough of a draw for people to overlook the setup and use of the system, no matter how easy it’s made to be. Successful mobile payment systems all have one thing in common: they’re useful. They offer a benefit to users. It’s hard to see any system without that succeeding.

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