“Digital Wallet” Is Slow to Catch On
Three companies that are usually battling it out to sell phone service are working together on a venture that launched this week in Austin. AT&T, Verizon and T-Mobile created Isis, a “digital wallet” system that lets customers buy things with their smartphones instead of using cash.
Is opening an app and typing in a PIN easier than reaching for your wallet and using cash or credit? Well, no, not really, but Verizon regional president Frank Antonacci thinks it will catch on anyway.
“It’s a safe and convenient way of making a payment, which we think will then allow customers to buy more things more often,” Antonacci said.
Americans spend $4 trillion shopping each year. Getting a piece of that pie, even a teeny, tiny sliver of it, is an MBA’s dream. Companies are creating digital wallet systems like Isis in hopes of someday getting a piece of each retail sale, brokering discount offers, and gathering valuable data about what you buy.
Who’s busy creating these mobile payment systems? Everyone, it seems: Amazon, Starbucks, Walmart, Target, American Express, and Internet companies like Google, PayPal and Square.
The 7-11 convenience store at 26th and Guadalupe, on the edge of the UT campus, is listed on the Isis website as a retail partner. Supposedly, it’s a place where customers can pay with their Isis-enabled phones, instead of cash or credit. But store clerk Dennis Rainford has never heard of Isis and says no one has yet tried to pay with their phone.
“I would have laughed at them if they told me that,” Rainford said. “I didn’t know you could use your phone for money. I thought all it did was cost you money.”
Same story at two other places listed on the Isis website, a taco truck and a 24-hour drugstore. The taco truck cashier never heard of Isis. The drugstore manager says he’s heard of it, but it’s not available at his store.
Nearby, Sean Faires serves up coffee and sandwiches at a busy campus snack bar. This is not an Isis affiliate, but its customers are young, phone-carrying college students. Perfect digital wallet candidates.
Faires says no one has ever come in and asked to use their cellphone instead of money. He likes the idea though, and says he would rather use his phone than carry his wallet.
“It would be convenient to not have to carry cash or a card,” Faires said. “You’re always going to have your phone on you. Sometimes you’re going to forget your wallet. When I walk out the door it’s like attached to me.”
If you use an iPhone, there’s no digital wallet for you, yet. Right now the only phones that can go cashless at the checkout are phones equipped with a tiny chip called NFC, for near field communication. Fewer than 10 percent of phones sold have NFC chips.
So for now at least, cash is king.