Even With New Payments, Volumes Can Decline – Can Mobile Overcome?

In an article ostensibly about a new mobile pay program introduced by a little company called Google, there is interesting challenge that mobile payments needs to overcome to go truly mainstream. Volume decline…

As the race for new payments expands (mobile, virtual card) and traditional payments plateau or decline (paper/cash), new payments can see initial decline, also known as the chasm affect. The chasm happens when an initial product is adopted and implemented but then stalls.  After the decline, the real challenge is to identify how to get out of the chasm.

On the mobile front, the Android “tap” procedure and Apple Pay scan are both pretty easy to use for even the least tech-savvy among us.  So what’s the problem?

Lack of scanners, equipment, and participating retailers? Hardly. Android Pay lists as retail partners Babies R Us, BJs, Bloomingdale’s, Disney Store, Duane Reade, Express, GameStop, Foot Locker, Macy’s, McDonald’s, Office Depot (among many, many others). Furthermore, Google says that Android Pay is accepted at over a million stores across the U.S.

So why are even once-formidable Apple Pay usage numbers coming down?

Surprise – – it turns out that HABIT is hard to overcome – – specifically, the habit of “swiping” vs. Android’s “tap-to-pay.” When asked why they weren’t currently using mobile payments even after having done so a few times, their answer is: “I forgot.”

Google hopes to create a new habit by offering rewards like a free Chromecast or free songs, movies, or subscriptions on Google Play in exchange for using Android Pay at local stores.

Will it work? Is HABIT the hurdle?

Sometimes habits extend the life of traditional products, like paper checks. Corporates have a habit of writing checks due to existing AP systems and float management process. As we wait for mobile to take over the world, we’ll keep processing checks via straight-through-processing techniques, advanced recognition technologies, next day clearing exchange networks and introduce new image validation technologies.