Mobile wallets seem like the way of the future. A smartphone is harder to lose than multiple cards and cash. However, a recent post on Morrison & Foerster’s Tech Blog explains some of the hurdles to using a smartphone to pay for goods and services.
“[M]obile payments represent the convergence of business, technology, and banking,” writes the author. Issues like cybersecurity, the source and settlement of funds to determine the applicable regulatory framework, authentication and the privacy of consumer data are all on the proverbial virtual plate. Here are some of the top issues:
- A plethora of choice: Mobile wallets are the basis of mobile payments—but right now there are so many of them, all designed for different uses, with competing technologies. “Many observers expect that the market will consolidate into a smaller number of providers and technologies,” notes the author, but until that happens, it’s a melee of mobile payment options, which can cause consumer and corporate confusion alike.
- Young consumers are hesitant: Research indicates young consumers—the bellwether of consumer attitude—are unsure about this trend currently. “Only 15 percent said they would prefer to use mobile payments over a credit, debit or prepaid card today,” according to MoFo’s research.
