Mobile payment still has way to go
Reliability, universality of apps remain issues
NEW YORK — PayPal, Apple and others are betting on billions in mobile payments.
But so far, trying to use my phone to pay at restaurants and retailers has been frustrating. It’s easier just to pull out my plastic credit card than to figure out which card works with which app and which app works with which store.
In theory, mobile-payment services such as Google Wallet are easy to use. You simply download an app and enter your card information.
In practice, the process it isn’t so smooth. I have several payment apps on my phone, but I open them only when I need a reminder of why they are so frustrating.
So what do PayPal, Apple, Google and others need to do to get me to leave my wallet at home?
More stores need to get necessary hardware
I once considered spending a week trying to pay for all my meals with my phone. I’d starve. I could get a burger at McDonald’s or a reheated hotdog at 7-Eleven, but mom-and-pop shops typically don’t have the right equipment. It’s convenient to have these apps on my phone only if I can use them.
With the launch of Apple Pay this month, several retail chains plan to start accepting such payments or expand the ability to do so. Having millions of iPhones capable of making such transactions will give smaller merchants an incentive to upgrade their equipment, too.
Figure out how to make every card work
Most places take Visa and MasterCard, and many take American Express, too. Not so with mobile services.
Here PayPal seems to be the winner so far, as it works with just about any card, as well as direct withdrawals from your chequing or savings account. I was excited when PayPal’s app told me I could use it at a restaurant I frequent for lunch.
Except ...
Payment systems change and loyalty points vanish
I briefly tried a payment system called LevelUp because it offered discounts for frequent visits. But when I returned to a pita place where I was racking up discount points, I learned the restaurant had dismantled LevelUp because few people were using it. So long to my points. Likewise, 7-Eleven has been phasing out support for existing mobile payment services while it develops its own system.
OK. Let’s say it’s a perfect world and every card works everywhere. There will still be two challenges ...
Typing in a PIN code takes time
Once again, it’s easier just to pull out plastic, especially as many transactions don’t even require signatures. The fingerprint ID sensors in iPhones and Samsung’s Galaxy phones will help. I’m more willing to tap a finger on a home button.
People will need to trust security of digital cards
The truth is, these apps are often more secure than plastic cards and their decades-old magnetic technology. Apple Pay, for instance, doesn’t store your credit card number, but rather a substitute one that works only with that phone.
If a merchant’s network gets hacked, as seen with recent breaches at Target and Home Depot, the hacker would need to have physical possession of your phone to use that substitute number.
And if you lose your device, no one can take it on a shopping spree because it won’t work without your PIN code or fingerprint ID. You can easily disable your payments account remotely, too.
Then again, many customers like me aren’t that afraid of hacks. Banks typically offer zero- liability protection, so you owe nothing for fraudulent charges, even if you do something stupid like leave your card at a bar overnight.
So until I don’t have to wonder when I run out for dinner or hop in a cab if my card is going to be accepted, I’ll likely keep paying with plastic.