Have you ever had an irrational fear? I've had quite a few in my time, but today I'll confess to one involving car windows. When I had older cars with manually operated windows I had a phobia of cars with electric windows. My fear was that if I drove one of these new-fangled electric windows cars, I'd have an accident on a bridge or along a body of water, my car would break through the safety barriers and would plunge into the dark icy waters. I'd try in vain to open the door, but deformation from the crash would make that impossible. The waters would flood the car electrics also stopping the electric windows from functioning. So, as I sit in the rapidly filling car I would curse the day I stopped using cars with manual windows. You'll be pleased to know that I did get over my irrational fear it's now over 5 years since I began using cars with electric windows and I'm still here.
It's security stupid
When I look at the recent hoo-ha surrounding the security vulnerabilities discovered in Google Wallet it makes me think that others might too be suffering from an irrational fear. After all, for these vulnerabilities to be exploited, the miscreants need to have physical access to the phone itself. As such, Google's assertion that the Google Wallet is still safer than the physical wallet holds. After all, cards are totally unprotected in your physical wallet.
What is slightly less irrational is the fear that a rogue app downloaded from an official (or in some platforms unofficial) app store might allow the developer access to the wallet and it's contents. It goes back to the initial slow uptake of internet banking on people's home PCs. People will be weary, but if the industry players demonstrate that they are taking security seriously, it should happen.
Thus I don't think security fears are the key roadblock on the road to NFC nirvana. The two biggest issues driving adoption of wallets are the availability of NFC-enabled smartphones and the fragmentation of mobile payment technologies.
Show me the NFC phone/PED
The former point is illustrated beautifully by the fact that neither of the two biggest selling smartphones in the UK last year (Samsung Galaxy SII and Apple iPhone 4s) sport NFC. But 2012 may be a watershed year. Already all major phone manufacturers bar Apple have announced NFC-ready phones and the much rumoured next iPhone outing (iPhone5 expected in September 2012) is also envisaged to sport the NFC standard. On the other side of the equation 2012 also sees all major PED manufacturers rolling out NFC-ready models into the marketplace.
Together we stand, divided we fall
The fragmentation of mobile payment technologies though in my mind remains the single biggest obstacle to mass adoption of mobile payments. Everyone seems to be trying to build their own mobile payments fiefdom, with the newswires littered by press release after press release on the launch of a mobile payment trial or technology. This fragmentation not only makes life tough for handset manufacturers (who don't know what they should be supporting in their upcoming handsets), but they also muddy the water for the media and the public at large.
What we really need is an industry-wide effort ala Chip & PIN, which can give us consistent branding and a reliable user experience, which together with much greater marketing backing will really help drive adoption. A whole new industry is there for the taking......if they only heed the advice of Khan Kubrat!*
* The Story of the dying days of Khan Kubrat (from Wikipedia):
According to legend, on his deathbed the Bulgarian leader (632ad – 665ad) Khan Kubrat commanded his sons to gather sticks and bring them to him, which he then bundled together. He commanded his eldest son Boyan to break the bundle. Boyan failed against the strength of the combined sticks, and so did the other sons in turn. Kubrat undid the bundle and broke each stick separately. He then proclaimed to his sons, "unity makes strength", which has become a commonplace Bulgarian folk slogan and now appears on the modern Bulgarian coat of arms.
Do Consumers Dream of Biometric Payments?
The significance of choice
Time to put your money where your mobile is
Apple Pay a U.S. Market Share Play?
Is the market for Mobile Wallets about to open up?
What to expect when e-commerce turns forty