Whether or not customers are ready, companies and stores are gearing up to take cellphone payments in the future. Wal-Mart, Best Buy, 7-Eleven and other stores have joined to form a company that will set up a smartphone payment system, the stores announced Wednesday (Aug. 15).
The new cooperative is called the Merchant Customer Exchange and comprises retailers that draw in $1 trillion in sales annually. The exchange hasn't yet offered many details on how their system would work or when it would start, the New York Times reported.
The exchange joins several recent corporate moves into the mobile wallet market. Earlier this month, the mobile payment startup Square announced a partnership with Starbucks. Soon after that, all four major U.S. cellphone service carriers announced they're forming a Mobile Payments Committee with Google, ISIS, PayPal and other companies.
How likely are customers to take to tapping their smartphones to pay for purchases? In April, we reported on a survey by the Pew Research Center in Washington, D.C., in which two-thirds of the experts the center surveyed thought cash and credit would vanish by 2020 in favor of mobile payments. The remaining third of experts said worries about the security of the system and about stores tracking purchases would keep people loyal to the cash and credit card systems available today.
Mobile wallets were conceived of about decade ago, Reuters reported, but so far, people in the U.S. have resisted widespread adoption. (Meanwhile, the majority of shoppers in Asia say they tap-and-pay for most of their purchases.) Mobile payment technology in the U.S. is "symied by industry infighting, consumer tastes and regulatory hurdles," Reuters wrote. Nevertheless, banks, phone companies and technology companies continue to invest in mobile payments.
For mobile payments to truly gain ground in the U.S., there needs to be a universal system so people can pay the way they want to, no matter where they're shopping, Charles Golvin, a mobile analyst for Forrester, told the New York Times. Golvin also said he doesn't think the new Merchant Customer Exchange will cause a "fundamental shift" toward mobile payments, though it could be popular with people who shop regularly at the stores in the group.