This weekend, I embarked on a 3.5 day wallet-less adventure to see if I could survive on mobile (iPhone) payment apps in place of cash and credit. My experiment was insightful and enjoyable! That said, the past few days in San Jose, San Francisco, and Napa, CA have proven that there is still plenty of work to be done before mobile payments are widely accepted. In the meantime, be sure to carry your ATM or credit card, or cash safely in your pocket!
Main issues I encountered during my wallet-less weekend:
- Few merchants accept mobile payments. PayPal and Square both have location-aware features to help you locate accepting vendors, but your favorite restaurants will likely not take payment from your smartphone. Consistent with Steven Bertoni‘s “wallet-less day” adventure, the eating options I saw consisted of pizza and independent fast food shops, and I would’ve had to drive out of my way to eat somewhere higher quality. Furthermore, almost no other merchant types in the area are accepting PayPal or Square payments.
- Merchants lack incentive to adopt mobile payments. Mobile payments have not been around that long compared to cash and credit. Using new technology, possibly in addition to their legacy POS systems, confuses storeowners. One restauranteur I spoke to told me, “I might do it in the future, but not now because I’m too busy during rush hour. Credit card and cash work well for my process and 85% of customers love using their credit card.” Additionally, fees associated with mobile payments tend to be higher than those assessed by traditional merchant card vendors.
- Credit cards have a unified processing system, whereas mobile payments operate in silos. One credit card terminal can read a multitude of different cards. In stark contrast, PayPal, Square, Google Wallet*, and other mobile payments providers may require merchants to run proprietary software, and potentially more than one suite, to allow for customers’ varying apps. This adds to the overhead and reduces adoption by merchants. *Google Wallet is also incorporated into some NFC POS terminals.
Some funny and aggravating excerpts from my weekend include:
- Day 0 (Emeryville IKEA): My first obstacle was trying to buy dinner at the IKEA Cafe. When I asked the cashier if she accepted the PayPal App, Square Wallet, or another mobile payment option, her response was, “I don’t think we’re sophisticated enough for that yet.” If only she knew she was foreshadowing my entire weekend!
- Day 1 (coffee shops): Twice on Day 1, I was able to buy my sanity using my phone. First, I started my day using the Starbucks app to pay for a croissant and coffee, and also leave my barista a $1 tip. Starbucks’ app is widely recognized as the most successful payments app in the market, and I use it frequently. Then, at the end of the day, I stopped into Philz Coffee to grab coffee for a late meeting. I was able to very easily pay using Square Wallet, and the next time I go I won’t even have to take my phone out of my pocket (because I toggled an option to auto-checkin via Square when I arrive). Brilliant! The only downside was Square doesn’t allow tipping, so my barista wasn’t as pampered.
- Day 2 (BUST): There was no escaping cash and credit. I even took the time to drive a bit further to have a tasty Greek lunch, in a restaurant identified by PayPal’s app. After I ordered and told the cashier I’d be paying with PayPal, he responded with, “We don’t have that. Only cash or credit.” A quick chat revealed even deeper confusion- the restaurant believes PayPal set them up without their permission. My gut tells me it’s reflective of the learning curve issue I mentioned earlier, not malice.
- Day 3 (San Francisco): I used the Pay by Phone app to pay for my parking meter South of Market. I use Pay by Phone and Park Mobile frequently without issue, to fill parking meters in San Francisco and Oakland. Tonight, I paid for my parking, went to a meeting, and came out to a $74 parking ticket! Clearly, there was a breakdown in SFMTA’s process, and I’ll be disputing the charge.
Stay tuned for another wallet-less weekend this summer! I will be taking a different tact: testing the system through use, versus trying to survive my normal routine with only mobile payments. I’ll be going out of my way to leverage mobile payments, to see how my efforts are received by merchants!
In closing, here’s a play-by-play of the past weekend:
- Croissant and coffee at Starbucks, plus a $1 tip for my barista, using the Starbucks App! Shake to Pay.
- Bouchon bakery only accepted cash or card, so pulled out my AMEX and indulged.
- ottega lunch paid by friend, in exchange for a future lunch date.
- Philz’ Philtered Soul and Mint Mojito coffees to go, paid for using Square Wallet! No tips allowed, my cheery barista will be forever poor.
- After parking in the SF Mission Garage, borrowed money to pay at exit. Even my AMEX couldn’t save me.
- Took AMEX out of wallet, grabbed a more reliable, boring card (Visa).
- Safeway trip in the morning before hiking Mission Peak. Paid with credit card.
- Lunchtime trip to local restaurant listed in PayPal app, paid with debit card after merchant said PayPal set him up without his permission, and PayPal wasn’t a payment option!
- Empress of China birthday dinner, paid friend back using PayPal App.
- ATM trip to pull out cash for remainder of evening.
- Breakfast. McDonald’s would have accepted Google Wallet but shunned my silly iPhone, McGriddle Breakfast be damned.
- Lunch at Subway, paid by card.
- Finished up my weekend with a business meeting at Epicenter Cafe in San Francisco. THANKFULLY, paying with PayPal worked perfectly. And to my surprise, my first coffee at Epicenter was on the house after a $5 perk!