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When will Mobile Payments Surpass Credit Cards?

For all the mobile payment hooplah as of late, many experts agree that you’re not going to be seeing a whole lot of people buying big-screen tvs in the store tonight just by waving their phones over them. They argue that traditional credit card use is entrenched and isn’t going to evaporate just because there’s a new technology around the corner.

Experts have projected that by 2015, the mobile payment industry could be worth as much as $44 billion annually. Even as more companies are pouring a considerable amount of assets into developing and testing digital wallet systems, adoption should still be slow enough that credit card users will still be swiping their plastic the old-fashioned way for at least several years to come, according to a report from the Wall Street Journal. It’s going to take a lot of nudging and incentives from the merchant and processor side to get consumers to change their behavior. Plus, it may take the industry several years to issue enough phones embedded with the necessary technology to make a dent on the marketplace.

Part of the problem is that so many companies are rushing to come out with their own mobile payment systems, and each one says theirs is the best approach. It will take both competitive shake outs, and cooperative working together, to come up with even one viable and scalable solution.“There will be a period of co-existence for a long while,” James Anderson, MasterCard’s head of mobile product development, told the WSJ.

Not all US smartphones have the right technology either. Near-field communication (NFC) allows for mobile payment processing just by holding a NFC-enabled device close to a transaction terminal, and it looks like this will be a breakout year for NFC-enabled gadgets. But it’s not the only game in town. Either way, only half of available smartphones are expected to be mobile-payment capable by 2015. Not to mention that many retailers aren’t set up to do mobile payments. However, in a number of those cases, the terminals would only need a software upgrade to become capable of accepting mobile payments.

“The challenge is you’ve got to get the infrastructure built and the people out there to use it before it makes sense,” Charles Golvin, an analyst with research firm Forrester, told the newspaper. “People aren’t going to rush out to buy a device with this capability that they can’t use anywhere.”

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[Related Article: Boku Brings Pay-By-Phone To The Checkout Counter]

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