According to a report this month from Carlisle & Gallagher, which is based in Texas but has its largest employment hub in Charlotte, some consumers remain apathetic about mobile wallets. Some consumers also worry that the technology is not secure, the report says. Eric Risberg AP
According to a report this month from Carlisle & Gallagher, which is based in Texas but has its largest employment hub in Charlotte, some consumers remain apathetic about mobile wallets. Some consumers also worry that the technology is not secure, the report says. Eric Risberg AP

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Bank Watch

Consumers aren’t rushing to use mobile wallets

October 26, 2015 12:04 PM

When was the last time you used your smartphone to buy something at a store, instead of a check, cash or plastic card?

A new report shows customers aren’t exactly rushing to use so-called “mobile wallets.”

Just in time for the one-year anniversary of Apple Pay, Carlisle & Gallagher Consulting Group, a Texas company whose largest employment hub is in Charlotte, has issued a report identifying “roadblocks” to consumer adoption of Apple’s service and other mobile wallets.

A mobile wallet is a smartphone app that uses wireless technology to interact with a reader device at a store’s checkout counter. You pay by holding your phone next to the device, eliminating the need to swipe a card and punch in a PIN.

Apple Pay, which has been closely watched since its launch last October, accounts for just 1 percent of all U.S. digital transactions, according to the report, which describes that adoption rate as “slow.” Other experts have also said mobile wallet adoption overall remains sluggish, despite a variety of apps being available to consumers for years.

“They’re used to pulling out their (traditional) wallets,” Peter Olynick, a Charlotte-based payments expert for Carlisle & Gallagher, told me. “It’s what they’ve done their entire lives.”

Some consumers worry that mobile wallet transactions are not secure, the report says. For its part, the mobile payments industry says mobile wallets are harder to steal or duplicate than cash or plastic cards.

Olynick also says some businesses that accept the mobile payments aren’t always making that fact obvious to customers.

The report also notes that some businesses aren’t accepting mobile payments yet, though more are joining the list. Just this month, Apple announced that Starbucks will begin accepting Apple Pay at some of its locations in a pilot program this year. KFC and Chili’s restaurants will start accepting Apple Pay next year.

Expectations have been high for Apple Pay, which some have predicted will be the tipping point for much wider adoption of mobile wallets. Charlotte-based Bank of America and San Francisco-based Wells Fargo both were quick to make Apple Pay available to their customers in time for last October’s rollout.

Olynick says 68 to 70 percent of all mobile transactions are taking place on Apple Pay, “a fairly high percentage of the market.” But many who use Apple Pay are not becoming habitual users, he said.

In a statement, Apple told me Apple Pay is “off to a great start” and seeing continued, double-digit monthly growth in transactions since its launch.

Apple Pay’s competition includes PayPal’s mobile wallet. This year, new wallets Android Pay and Samsung Pay have also been launched.

Olynick believes mobile wallet use will grow in the coming years. Helping drive that, he said, will be an advertising push already taking place on social media to promote the wallets. Olynick also expects merchants to start doing a better job making it clear that they accept the payments.

“Consumer habits can absolutely change and have changed,” Olynick says. “At some point, it’s going to be what everybody does.”

Deon Roberts: 704-358-5248, @DeonERoberts

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