On the eve of Apple’s unveiling of its new iPhone-based payment system, a top executive at American Express said that, so far, efforts to get consumers to pay using mobile wallets have failed, according to American Banker.
“On wallets generally, we have had wallets in the market for quite some time, and there has been fairly limited adoption of those wallets. I think ‘fairly limited’ is generous for many of them,” Josh Silverman, Amex’s president of consumer products and services, said at an industry conference in New York.
The problem, Silverman added, is that mobile wallets don’t solve a real problem because swiping a payment card isn’t a big imposition. “It’s my opinion that the swipe isn’t especially broken,” he told an audience at the Barclays Global Financial Services Conference.
Lack of enthusiasm by consumers has resulted in unwillingness by retailers to invest in new terminals to process mobile payments, he said. In addition, various companies in the payments chain, ranging from card issuers, to merchants and terminal vendors, have different ownership structures and different interests. “It’s difficult to get any really powerful new value proposition to market unless you can get most, if not all, of those components of the value chain together,” Silverman said.
His recommendation to merchants: “Don’t give 50 percent off to everybody in town. Give 50 percent off to the people who are likely to be your best customers. And they’re people who probably live near you, or work near you, who have demonstrated a sustained interest in your category.”