Picture walking up to a department store counter, two shirts in one hand, smartphone in the other. There’s no need to reach for your wallet, because credit card information has been stored in your phone. One tap of the phone on a small mobile reader and you’re out the door.
Welcome to the world of smartphones that can double as wallets.
Currently, just one or two smartphones hold the souped-up microchip technology that’s needed. Consumers can scan phones across barcode readers to enter ballparks or to board airplanes, but using a phone instead of a credit card is in its nascent stages.
A joint venture established a year ago with AT&T Mobility, Verizon Wireless, T-Mobile USA, and some of the major banks and credit card issuers may make the mobile wallet mainstream. The venture, called Isis, is testing its mobile wallet with stores in Austin and Salt Lake City and with some nationwide vendors, including Coca-Cola Co., Dillard’s, and Champs Sports.
“The mobile wallet is going to be a heck of a convenience,” said Richard Mader, of the Association for Retail Technology Standards.
Isis joins Google and PayPal as companies trying to make it easier for consumers to use their smartphones for purchases.
Right now the sector is small: Internet payment companies such as PayPal have developed mobile apps, and Google is testing Google Wallet. But the market for mobile payments is expected to more than double to $670 billion by 2015, from $240 billion a year ago, according to Juniper Research.
“We’re still watching and learning,” said Jim Sluzewski, a spokesman for Macy’s, which is experimenting with Isis Mobile Wallet and Google Wallet in some stores.
The pace is slow for a variety of reasons.
Besides the small number of smartphones that are equipped to operate like a wallet, only a slightly larger number of retailers currently are using the corresponding technology.
The larger reason, however, is that it’s still just simply easier for consumers to grab the credit card.
“The way that consumers view payments now is not broken,” said Mark Beccue, a senior analyst for ABI Research. “For it to motivate [consumers], there has to be something else.”
Or, people may just not be ready.
“It’s too much,” said Moira Giles, at Atlanta’s Perimeter Mall recently. “What if I were to lose it?” Analysts say those fears will go away with time. Encrypted information, third-party data storage, and the ability to have a mobile phone company “lock” a phone if it has been stolen will keep information protected.