So often we hear about mobile payments being the holy grail for things like splitting a lunch bill - but I am here to tell you that so far it just is not that simple.
I am all about convenience. In college, I thought about building a single machine that could wash, then dry clothes so that I could put my laundry in one machine, fill it with quarters and come back to clean and dry clothes. As I started down this path I quickly learned that it was not that simple. While the technology is there, there are lots of reasons why the all-in-one washer dryer are not common, particularly in the US. First, they are terribly inefficient. Second, they are generally smaller than what most Americans are used to using today. Finally, and probably the most important, the industry would probably prefer that we keep buying separate washers and dryers.
So what does my college dreams of an all-in-one washer dryer have to do with banking? It is that things are never that simple, and even though in our minds we believe that this should be so simple, the reality is that there is always more to it. Recently my colleague James Wester and I were working on a research project. We got hungry and we walked over to the cafeteria and got our food and proceeded to wait in line. As we got to the front of the line, I remembered that they only take cash, and when I turned to James he said"Dude, I am a payments analyst - I never carry cash". Luckily there is an ATM in the lobby, so I ran to the ATM and took out cash so that we could pay for our lunch.
While James and I were eating, I said to him "OK Mr. Payments, how are you going to pay me back?". He pulled out his mobile phone and e-mailed me my money. Sure enough, I instantly got an email saying that I got money from James. So far, so good and it was quite simple. But then the wheels fell off. Once I opened the email, it said it needed to verify that I was in fact me. It asked me some questions, I answered them and it appeared that I was good to go, but there was more. After that it asked me for my bank account and routing and transit number. Who remembers that? Fortunately, I am a banking analyst and of course I have my routing and transit number and my account number memorized, but I doubt most people do. So I plugged in that information and thought I was done - now give me my money. Nope. Then it asked me for my online banking login credentials? Do I really want to do this now for such a small amount of money? I did just because I wanted to see how this ends. It took a while, but it verified me and told me that I am in fact Marc DeCastro and that is in fact my account at my bank and I am now verified and approved for such mobile payments activity.
Whew, I did it. Now next time I pick up lunch for James, he can email me money and hopefully it will be easier. But then the final kicker, the money will take 7-10 days to go into my account. Seriously, are they delivering those payments by a pony? We need to keep being innovative while keeping things simple, open and convenient. Going through that many hoops for a small amount of money, then having to wait 7-10 days is not simple, convenient nor an open platform as I had to basically setup an account.