Mobile payments: please stop using credit cards

Prominent players in the mobile ecosystem would really like it if you’d stop using cash and credit cards and instead used your mobile phone to pay for everything. On the ride home from work yesterday I caught a Commerce Weekly article from O’Reilly that in turn points to an article from ReadWriteWeb on Revolutionary Technology & The Transformative Effect On Currency. Did you know that smartphones might transform our society from cash-based to digital?

Ok, first, I’m not sure I buy (sorry) that our society is still cash-based. Credit cards have been around for years; aren’t they already hard at work transforming commerce into an exchange of information rather than an exchange of actual physical cash?

Second, given that most people already have multiple credit cards they always carry with them, what makes people think that offering the opportunity to use their phone to pay (which they also always carry with them) will somehow make them give up cash? What’s that you say, that swiping a credit card is too much work (uh, as opposed to pulling out cash?)? Ok, then why did all those physical proximity credit card payment options fail? People do remember those, right? (It does occasionally seem like pundits have astonishingly short memories.)

So what’s really different about mobile wallet solutions? Let’s see what ReadWriteWeb says.

• [T]he consumer gets the value of electronic receipts and the ability to receive coupons, offers and loyalty rewards. Ok, none of that is new. Credit card companies already offer similar things.
• [T]he retailer knows who that person is. Also not new. Pundits do realize that credit cards have names on them, right?
• [T]he mobile wallet provider gets information about what was bought when and where and by whom. Ding ding ding ding ding!

There you have it, the real motivation for the mobile wallet push. Mastercard and Visa are getting all sorts of data about where and when you’re buying things, and other entities want that information: Google, the mobile carriers, etc. In other words, mobile wallets aren’t necessarily better for you (in fact, they might be worse depending what regulations end up governing the use of information about your purchasing behavior), but there’s a lot of money potentially available from being in control of the flows of information.

So hop on the mobile wallet bandwagon and become a better product today! Advertisers are waiting to pay for information about what you’re purchasing. They’re just not waiting to pay you. Sorry.