For mobile payments adoption, it's the same old story

Stop me if you've heard this one before: You're more likely to go back home to retrieve your smartphone than the wallet you left behind.

For years now, executives, industry analysts and the media have cited this overused — and misleading — statement as a primary driver for widescale consumer adoption of proximity mobile payments in the U.S.

Guess what? We're nowhere near that reality today. And now the Boston Federal Reserve is here to remind us why.

During a 12-month period between June 2015 and May 2016, the Boston Fed payments strategies group conducted a "mobile-digital wallet analysis project" in which six people tested mobile payments.

The test included proximity and remote purchases using a variety of methods, including Amazon, Android Pay, Apple Pay, Masterpass, Samsung Pay, PayPal and Visa Checkout.

Elisa Tavilla, an industry consultant for the Boston Fed Payments Strategies group, concluded in a report that while members of her team continue to use their mobile and digital wallets regularly, none is ready to leave his or her physical wallet at home.

And while mobile payments adoption has grown since the group concluded its test, some of the issues raised in the report persist as we approach the end of the first quarter of 2017.

Let's examine three key findings that stood out:

• Consumers and employees need more education on how mobile and digital wallets work if the market is to achieve mass adoption. Tavilla wrote in the report that "staff training on the Pay wallets varied, even within the same store location."
  
  Cashiers at one chain (and at different locations, no less) told team members that Apple Pay wouldn't work with their POS system, even though the terminals displayed the Apple Pay logo. In each instance, team members did, in fact, complete such transactions.
  
  Tavilla said that had those team members been typical consumers and unfamiliar with Apple Pay transactions, "they would have used an alternate form of payment and perhaps been discouraged from trying again."
  
• Features such as robust loyalty and rewards features can help to build adoption. While this has become a popular suggestion for increased consumer adoption, implementation has been inconsistent. However, this is starting to change.
  
  Samsung Pay added Samsung Rewards last fall. Blackhawk Network and Apple are working together to integrate loyalty rewards into Apple Pay, though we haven't seen any real-world examples of this partnership since it was announced in December.
  
  Tavilla mentioned in her report that Kohl's is helping to set a precedent with loyalty and rewards for big-box retailers. And of course, we all know about Starbucks.
  
• Consumers look for a retailer that sells what they want to buy, not one that accepts their digital or mobile wallet. Tavilla's conclusion is accurate, though I do believe there are exceptions.
  
  I've mentioned in previous commentaries how much I love Sweetgreen, not only for its salads, but also for its mobile app and associated rewards program. I will go out of my way to visit a Sweetgreen for these reasons.
  
  It’s possible that the right combination of product and rewards can change consumer behavior on a large scale.

In the end, I found myself nodding my head in agreement when I read Tavilla's report. Her team encountered many of the same problems I've faced when using mobile payments in-store.

When retail associates are uncertain how mobile wallets work, confusion is sure to follow. And constant employee turnover in the retail sector doesn't help.

I believe mobile payment and wallet providers of all kinds need to get more serious about their marketing efforts. A more hands-on approach is needed.

Why not do something like Visa did a couple of years ago at Super Bowl 50 in San Jose, California, when it showed fans visiting the game's fanfest how to load a payment card into Samsung Pay?

This kind of marketing could go a long way toward increasing consumer adoption.