Mobile Wallets: Future or Fad?

Near Field Communication (NFC) is quickly taking hold in the United States, and with it commerce has seen the rise of mobile wallets. What is a mobile wallet, you say? It’s an application for smartphones that allows a short, rapid transmission of credit card information to a receiving source, eliminating the need to swipe or even carry a credit card.

We all know that people love their phones. To some they’ve essentially become an extra appendage. So naturally another excuse to show them off to the world seems to be met with praise and excitement. Using phones as temporary credit cards allows convenience for customers, faster-moving lines at cash registers, and less frustration in remembering PINS and fumbling for the right cards. Mobile wallets also allow retailers to easily keep track of loyalty points, and offer user-specific discounts and promotions to customers.

Despite the up-sides, mobile wallets are still quite controversial. Many customers worry about identity theft as the signal is transmitted more openly than traditional methods. Other concerns come from merchants. Many are unwilling to purchase new readers to accept the application with its future so uncertain.

It remains to be seen whether mobile wallets are a future or a fad. As companies such as Sybase (an extension of SAP) continue to develop applications enhancing NFC security, and merchants come to recognize its advantages, the physical wallet may just become a thing of the past…Or perhaps just a hip trendy accessory.