Is the Debate About Mobile Payment Missing the Point?

Mobile payment is here and it is growing. There are a number of questions associated with that, many of them having to do with competing technological features. In the following op-ed in Mashable, Sam Shrauger, who is vice president of Global Product and Experience at PayPal and who helped design and launch their mobile payment system, asks why so many assume consumers will embrace this rather than asking what it is consumers are looking for.

"The transformation of consumer payments is a hot topic right now. The market is changing both on mobile devices and at the point of sale. Every day it seems like there is a big announcement from a giant in the tech, payments, banking or telecom space that is characterized as the next “big” thing to transform payments.

But, after reading a steady parade of these articles for what seems like months on end, I can’t help but be left with one simple feeling: That the entire debate raging before us is completely missing the point.

Why Do People Want This?

The current market discussion goes something like the following. Mobile phones, and specifically smartphones, are gaining rapid consumer adoption. Smartphones have become what the first PDAs aspired to be: the center of your life, in the palm of your hand. In effect, they’re meant to enhance all the things you do every day — communication, entertainment, content discovery and shopping. If mobile devices are going to enhance such activities, they should also enhance the act of paying for those purchases. Mobile devices are poised to eventually replace our wallets.

Unfortunately, this is the point where an interesting discussion seems to veer off into the trees. Rather than focus on the main issue at hand, the debate becomes about competing technology.

Several technology companies are vying for a piece of the pie. Some have an open operating system, while others have a closed one. Some are pushing near-field communication (NFC), while others are keeping their options open. Some will pay for merchants to have NFC terminals, while others are waiting for the market to adopt them, at which point, they will be poised to pounce. Some are building apps, while others are embedding wallets into devices. Some companies have lots of devices in the market, while others started late and are catching up quickly.

Meanwhile, no one is asking the basic question: Why would people want this? And more specifically, what are people looking for in a payment system that will compel them to actually replace their physical wallets with a digital one?

Until that question is answered, the debate about which device, which standard and which operating system are completely irrelevant. The shiniest, sleekest device and the best operating system in the world won’t get you anywhere if you can’t offer consumers a payment experience that they want and value.

The Digital Wallet

What do people want in a digital wallet? In a lot of ways, it’s actually pretty simple. Consumers want security and trust, which are absolutely crucial whenever you’re moving money. They also want convenience — something that is easy to use and saves them time, or money, or both. They want financial freedom and control — the ability to pay the way they want, on their own terms, for any transaction. They want ubiquity — the knowledge that their form of payment can and will be accepted by any other person or business they want to pay.

Those are the things that will determine success with consumers. People couldn’t care less which technology a hardware or software manufacturer would like to sell them. They couldn’t care less which technology merchants may or may not put in their stores. Ultimately, they just want something that makes their life better when it comes to buying and paying.

So, I’d like to issue a challenge to the industry: Let’s change the conversation and start talking about the customers for which we’re creating these products and technologies. Let’s talk about what might be right for them when it comes to a digital wallet and how we can make their lives better. At the end of the day, that’s what matters most.