Consumers and Mobile Wallets: Not Yet Ready for Commitment

Do you know who Jason Allen Alexander is?

Hint: He's not George Costanza.

No, this Jason Alexander is far less noteworthy. This Jason Alexander married pop star Britney Spears in a Las Vegas drive thru wedding back in 2004.

Their blessed nuptials lasted all of 55 hours before the marriage was annulled, and Jason has since faded into obscurity.

He may be forgotten, but he makes a fine role model for measured, intelligent approaches instead of rash decisions.

Consumer technology is full of Jason Alexanders. Businesses love to hype the next big thing and wait for consumers to meet them at the altar. But for every consumer innovation that finds everlasting love with users there are dozens that get left on the curb after a brief dalliance, like poor Mr. Alexander.

Laserdisc. The Nintendo Powerglove. The Segway. Microsoft Zune. Google Wave. They all had a certain coolness to them. All were definitely innovative. Some of them saw significant adoption, briefly, but eventually faded away because consumers just weren't ready for them. (Yes, I know you can see the occasional Segway cruising around, but they're very rare.)

Mobile wallets are at risk of being on that list.

(Click here to see how Access is helping one bank move their customers toward mobile payments)

There is some amazing technology out there, from cloud-based payments to NFC to algorithms that spoof the actual card swiping process. Developers have done a great job of building innovative and convenient systems that we wouldn't have dreamed of ten years ago.

But here we are in 2014, and mobile wallets are at the altar, ring in hand, waiting for consumers and merchants to rush down the aisle.

There's still a lot more work to be done before that's going to happen.

First, consumers need a reason to change their habits. This is why mobile coupons, loyalty programs, ATM access, and most importantly, merchant involvement are so important. There has to be an incentive to change, because right now it's still very easy and fast to pull out a credit card or cash.

The good news is 74% of consumers are now shopping with their smartphones and tablets and 40% between the ages of 18-54 are using mobile coupons to some degree or another, according to one recent survey. So people are getting used to the idea of using their phones in the purchasing process - a good start, but there's another missing element.

Second, it's time to go all-in on merchants. A diverse range of mobile wallet offerings has increased skepticism among merchants, who are eager to avoid expensive POS systems and upgrades when there's no guarantee it'll actually bring more traffic. Many of them are simply sitting back and waiting to see which systems emerge.

This is where mobile coupons once again enter the picture. By focusing on building out merchant content through light commitments such as coupons, mobile wallets will simultaneously habituate merchants AND consumers to using smartphones at the POS. It'll accelerate the dating period that precedes nearly every successful, long-lasting marriage.

One example: the new AmaZing Deals program from Zions Bank. The program engages both cardholders and merchants by enabling mobile commerce through coupons. AmaZing Deals may not turn into a payments program, but Zions will be in an enviable position with thousands of cardholders using their apps, and thousands of merchants who recognize and accept it.

People love their smartphones, but they're clinging pretty tightly to their wallets. If they're going to walk down that altar, it's going to be in baby steps. By focusing more on building the relationship through valuable content and merchant relationships, banks can avoid the unenviable position that Jason Alexander found himself in.