At last, the bank-backed ISIS mobile payment system will debut next week via trials in Austin, Texas and Salt Lake City Utah. Oft quoted skeptics argue that mobile payments won’t succeed in the US because plastic credit cards are already easy for consumers to use. This is true. What the skeptics are missing, however, is that plastic cards can’t tell you anything about their benefits or limits while mobile devices can.
Here’s a real life scenario: You’re moving to a new home and stop off at a Menard’s home improvement store to pick up a few items. You swipe your American Express card and nothing happens. The cashier says, “I’m sorry, we don’t accept Amex. Do you have another card?” Well, you do. But you like to funnel everything through your Amex because you’re building up a boat load of points. Sure, you have other cards in your wallet – but which one is just carrying the balance transfer you recently made, and which one gives you the best benefits for using it? And is the balance on your debit card enough to cover this purchase? You don’t know, so you just select a credit card at random…
Now, cut – Let’s try that scene again. You tap your mobile phone against the POS terminal with your Amex card set as the default. Your mobile payment app tells you right away that not only will Amex not work, but your next best choice is your Mastercard that has no balance and offers you 5 percent cash back on home improvement purchases. You then make an informed choice about which card to use because your mobile phone just kept track of all of your conflicting, confusing, and otherwise opaque card benefits for you along with your balances, loyalty rewards, and limitations.
That’s a different sort of convenience. Whether it is more convenient to swipe or tap just doesn’t seem as important as being empowered to take informed actions that maximize your benefits. If mobile payments are going to succeed it will be because they bring credit and debit cards (or, more appropriately, accounts) into the on-demand information era into which nearly everything else has already migrated.
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