Why wallets waned: a Q&A with John Haro, CTO of Vibes

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John Haro discusses mobile technology

Remember when the mobile wallet industry was supposed to take the tech world by storm? Back in 2011, Google Wallet, Square Wallet, and PayPal Wallet all launched, essentially copycatting Amazon's mobile version of Payments, which debuted in 2009. Apple followed suit in 2012 by launching Passbook.

With so many major players invested in mobile wallets, we were supposed to be on the cusp of life-changing technology that would signal the end of credit card plastic. Some projections estimated the mobile wallet industry would topple $5 trillion by 2020.

But wallets have waned. Square recently announced it would discontinue Wallet. Rightly or wrongly, 63% of US consumers told Harris Interactive they would be uncomfortable using a mobile app that would store credit card information, allowing them to make purchases at a retailer as they would with a credit card.

John Haro explains

I spoke with John Haro, Chief Technology Officer at Vibes, a mobile marketing and technology company. Haro's got a deep background in digital marketing and mobile technology across everything from software engineering to data warehousing to mobile relationship management. He explained what's happening in mobile payments technology and what businesses should look for in terms of where mobile payments innovation is headed.

TechRadar Pro: It seems like excitement about mobile wallets died down in recent years. In 2010 and 2011 we saw a slew of mobile wallet/mobile payment launches and everyone was predicting the end of the credit card era.

However, we're all still using credit cards and the average consumer likely isn't getting rid of them any time soon. Were we all too enthusiastic about the speed to implement this technology on the business-side or did we overestimate the consumer's ability to adopt mobile payments?

John Haro: I think some overestimated the consumers desire to adopt mobile payment solutions more than their ability, and mobile payment providers have offered them no well designed solution. I can pay for my lunch just about anywhere with a credit card in less than 10 seconds because I do not have to sign and I don't care to get a paper receipt. With Passbook, Apple designed a great consumer experience for everything in your wallet, except payments.

I still think there is a lot to be excited about there, and I'm excited about ways that wallet providers can make payments invisible...a method so well designed that the payment just happens...as it does with services like Uber.

TRP: So what do the more niche mobile wallet companies like Square, LevelUP, and Loop do now? Is it about incentivizing adoption or do they have to move on to the next big mobile payments idea?

I assume, because your company, Vibes, works with mobile wallet providers like Google and Apple, that you're helping them to incentivize adoption by making mobile wallets more user friendly and more organic to how transactions are conducted.

Haro: Current mobile payment systems tend to be solutions to problems that do not exist in that it has to be easier than swiping a plastic card. However, with recent security breaches at major retailers many understand that the plastic card with a magnetic stripe is a serious security problem. Focusing on innovation and design of the consumer experience is the solution.