In the States, mobile payment is one of those magical concepts where all of the relevant players are in complete agreement that this is a must-have. And yet, despite the fact everyone says they want it, it’s not getting anywhere.

In the States, mobile payment is one of those magical concepts where all of the relevant players are in complete agreement that this is a must-have. And yet, despite the fact everyone says they want it, it’s not getting anywhere.

There are many reasons why it’s not getting anywhere, but the biggest obstacle is, ironically, the inherent popularity of mobile payments. So many different key players — retailers, carriers, handset manufacturers, mobile operating system players, POS vendors, payment brands such as Visa and MasterCard, processors, etc.— are all launching their own competing efforts.

That is fragmenting the already tiny embryonic market. Then you have Apple. When it comes to retail mobile interactions, Apple is huge. It’s huge with retailers — large and small, including Ann Taylor, Lowe’s, PacSun and Urban Outfitters — where iPads have all but cornered-the-market as in-store retail hardware, thanks to some farsighted early deals Apple cut with almost every sled manufacturer. Even manufacturer NCR ended up having to use Apple hardware in its own in-store retail product.

Apple is just as huge with consumers. In various mobile trials open to consumers using either Android or iPhone/iPad, Apple consumers tend to be much more active. In recent mobile trials, apparel chain Eddie Bauer found that twice as many Apple customers responded, while online grocer Peapod found the Apple advantage to be closer to 90 percent.)

Put the two together and it’s clear that Apple needs to be involved. And yet it’s not. Apple has refused to allow any of the major mobile trials in the States — Google Wallet, ISIS, PayPal, etc.— to integrate with its systems, where Apple has any choice. Yep, Apple is considering getting into the mobile payment game itself.

The other mobile payment hurdle has been security. The version of Ebay’s PayPal mobile payment that it has been trialing with major retailers here — including Home Depot, JCPenney, Abercrombie & Fitch, Toys R Us, Foot Locker and Barnes & Noble — doesn’t even require a mobile phone. Shoppers can go into Home Depot, for example, and pay for an item by typing in their mobile phone number and a PIN. The problem is that mobile phone numbers are widely known — many consumers share them freely and, even if they don’t, it’s a number that is broadcast in the clear — and the PIN is only four digits and is easily captured by over-the-shoulder peeking.

Once both pieces are data are grabbed, there’s nothing to stop the thief from making a huge purchase and walking right out the door. There is a PayPal mechanism to limit multiple fraudulent purchases, namely that the customer gets a text or E-mail alerting them to the purchase, allowing for the account to be shut down.

The other security concern is the PCI Council, the Visa-MasterCard-American Express initiated group that handles policy on payment security mechanisms. The council has been vague on what would be acceptable and not acceptable. In short, retailers who want to experiment and deploy are running the risk of being later found to be non-compliant with PCI.

Late in May, though, this messy situation got even ickier. (That may not be a word, but it should be.) MasterCard on May 23 released formal guidance giving retailers a roadmap to implement mobile payment using smartphones, tablets and other devices equipped with a “card reader accessory.” The problem? The recommended best practices may not be PCI compliant and they conflict with MasterCard’s own rules, as the card brand acknowledges.

Then we have problems galore with the existing retail trials. Google Wallet opened last year with much excitement and retail backers including Walgreens, Macy’s, American Eagle Outfitters, Toys R Us, RadioShack and Subway. The trials seemed to, for the most part, proceed well from a technical standpoint. The problem was with customers: there were hardly any, a problem shared by PayPal’s trial with Home Depot.

After some months of trial, the CIO of Guess (apparel chain) said his chain literally saw “five or six” customers using Google Wallet. Over at Home Depot and PayPal, EBay CEO John Donahoe said in late April: “Frankly, the only people using it thus far are eBay and Home Depot employees and others that have happened to have seen it.”

There’s now word that Sprint, the only carrier that was backing the Google trials, may be planning its own NFC mobile wallet. (“Hey, kids! Buy now. Don’t be the last kid on your block to not have your very own NFC wallet.”) And given that Google Wallet needs control of the phone’s secure element, if Sprint launches, Google will likely then have to find a different carrier. That won’t be easy given that AT&T and Verizon are still backing ISIS, their joint venture mobile effort.

See what I mean by things getting a bit fragmented? This is like a middle school play where everyone wants to be in the play and someone says, “Somebody has to not be in the play or else there won’t be any audience?” When those kids grew up, I think they all went into the mobile wallet business.

About Evan Schuman

Evan Schuman is Editor of, a U.S.-based site that tracks retail technology, E-Commerce and Mobile Commerce issues and a Retail Week content partner. Evan Schuman can be reached at