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There was a time when the launch of a new mobile payment system from one of the world’s largest and most dynamic technology companies would have been a massive event. Yet when Google rolled out Android Pay in September, there really wasn’t too much buzz. And that lack of excitement says more about the state of mobile payments than a hot new product might.

First, let’s acknowledge that Android users haven’t exactly been waiting breathlessly with excitement about a new mobile payment capability. For one thing, they can already make payments and more with their Android devices—Google Wallet has been around for years. It even enables users to send money to anyone in the country with an email address. Samsung Pay is another option, and in some ways even more user-friendly. With this app, payments can be authorized just by scanning a finger on the home key. There are independent alternatives too, like Venmo and Square.

Still, Android Pay is different, and in some ways more fundamental. While Google Wallet and Samsung Pay are both apps, with all the advantages and headaches that implies, Android Pay is embedded in the operating system. The minute the device is placed next to the credit card terminal, it signs on. It even offers prompts to use available loyalty or gift cards. Just tap, pay and benefit.

The security levels are quite high as well. Android Pay doesn’t send a credit or debit card number with the payment—it uses a virtual account number to represent the financial information, which makes it easier to keep the card details safe. And just like those apps, it builds on near field communication (NFC), which most Android devices recognize.

But there are some obstacles to widespread usage too, at least for now. By using the debit and credit cards in the transaction, Google Wallet and Samsung Pay could be processed just about anywhere. To use Android Pay, however, the merchant needs to actually support Android Pay. Sadly, the list of retailers and other business currently featuring that capability is still quite small.

There’s a reason for this seemingly backward step: Transactions in Google Wallet show up as Google purchases, not tied to specific card companies, which negates the advantage of potential cashback offers and other rewards. Android Pay brings them back in the fold, while maintaining a high level of security—a custom PIN, pattern, or password lock is required to use the service.

Most importantly, the entire practice of mobile payments is ridiculously easy—all it takes is for a user to add a credit or debit card to the account, and a mobile device. For a generation weaned on technology-enabled instant gratification, it’s the ultimate goodie.

So why is adoption still so sluggish? Why isn’t everyone using mobile payments?

It’s true that many vendors lack some of the capabilities needed to manage online payments, particularly since many of the technologies keep moving. The Payment Networks’ Liability Shift for the EMV standard was long designated for Oct. 1, yet a survey out in September noted that only 27% of all U.S. merchants were ready. (For the record, the number is expected to be closer to 50% by the end of the year.)

But the problem may be more fundamental than that. There are times when a new technology capability drives significant behavioral changes, and others where an app or service is rushed out to meet market demand. In this case neither of those is really happening—the technologies are available, the need is there, and everyone stands to benefit, yet growth is still remarkably6 slow. Apple Pay was supposed to set the market on fire, but it just didn’t happen.

Could it be that there are simply too many options for the market to coalesce around one, which is what’s needed to drive mass adoption? Or are consumers more careful with money issues than they are in other practices, and just the launch of another option won’t make a big difference?

We know mobile payments will become routine at some point; the benefits are too great for it to fail. So any guesses on when that will be?


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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Brad Strothkamp

Neill Harris

Neill Harris is product marketing director for ATM solutions at NCR. He travels extensively to many of the world's leading banks and financial institutions, articulating how self-service technology and innovation can inform and support strategies and solve challenges.