Everything inside the modern-day billfold we've been carrying since the 1950s could go inside our smartphones. Physical credit cards, ID cards, loyalty cards and more could all go away, making our lives a tad simpler.
Fear of the mobile wallet
So why aren't we clamoring for this convenience? Fear and a lack of trust. We don't believe the mobile phone industry will protect what's inside our wallet better than our back pockets or purse.
We're certainly aware of mobile applications like PayPal Mobile, Google Wallet, Starbucks and Square, and the potential convenience is appealing. Also, there's nothing app developers, wireless service providers and smartphone makers would like more than to have access to our cash and credit.
Nevertheless, the trusty wallet stays until people believe there's security in the smartphone. What we worry about is liability if the phone is lost, stolen or otherwise compromised, a recent survey by professional services firm PricewaterhouseCoopers found. People also fear becoming a greater target for crooks who will see smartphones as an electronic goldmine.
Of course, wallets are not immune from any of the above. They get lost and stolen and thugs rob people for them often. Nevertheless, the wallet is something we're familiar with and we know how to protect. The mobile wallet takes us into the scary unknown.
What companies can do
If companies want to change people's thinking, then they will have to offer rock-solid protections. What people want is the ability to wipe smartphones clean and replace mobile wallets easily and instantly, according to PwC. They also want fingerprint ID technology to gain access to their wallet.
In addition, people want their mobile wallets accepted everywhere. Before they leave their billfolds home, they want to be able to use the digital version in retail stores, gas stations, restaurants and doctor's offices. They even want law enforcement agencies to accept the electronic version of their driver's license.
Banks and credit card companies have the best chance today of easing people's worried minds, PwC says. Despite the bank-created financial debacle that brought us the Great Recession, we still believe financial institutions are the most experienced and trustworthy at handling our financial and personal information. Without the backing of these institutions, retailers and wireless service providers don't have a chance.
What's also needed that isn't covered in the PwC study is innovation. Rather than deliver clever features for taking and sharing pictures, the mobile industry has to tackle the much harder problem of delivering effective security that's easy to use.
Security in smartphones is still in the early stages. Buyers do not have it at the top of the features they look for in a phone, so manufacturers don't have it on the top of their lists.
That kind of market-driven thinking has to change. It's time for the mobile industry to shoot for real innovation in security and then crow about it. Otherwise, the mobile wallet will continue to be trumped by 60-year-old technology made of leather and thread.