« Mobile Marketing Campaigns for Restaurants | Main | The App That Teaches CPR in Emergency Situations »


Mobile Wallets Are Faster, So Why Wait for Chip and PIN?



Have you used a chip reader yet? First, you dig out your credit card, stick it in the machine, wait a few seconds, remove the card, sign the dotted line, and then you get your receipt. 

It’s a simple process, but it’s more time consuming than the previous swipe method, and the public, as well as merchants, are taking note of the extra time it takes at checkout. In fact, chip-enabled credit cards can take as long as 10 seconds to complete a transaction; add those seconds up over an 8-hour work day, and you might find that customers are starting to tap their feet. 

Chip technology was, and still is, a huge victory for financial institutions and retail stores; reducing fraud with this technology has been successful by most accounts. However, businesses were slow to adopt chip readers, and banks launched a defense wherein retailers would take on the burden of fraudulent charges. 

Merchants responded in kind, but were likely unaware of the excess wait times they’d be facing as a result. According to a new report by Iovation and the research firm Aite Group, by the end of this year, 80 percent of all credit cards in the U.S. will include chip technology


Alternatives for Chip Technology 

Chip technology wasn’t the only solution to the original problem, nor is it the only viable alternative today. Mobile wallets have been around for years, including Google Wallet, which was first introduced back in 2011 and released to the public late the same year. Tim Cook announced Apple Pay back in 2014, yet very little awareness of mobile wallet technology exists in the public.

This is partly because many retail stores don’t yet support mobile payment technology, but it’s also a result of slow adoption from consumers, many of whom are dubious of the new payment system. 

However, they might also feel compelled to get familiar with mobile wallet technology when they grow tired of waiting in line at the grocery store, restaurants, or the local coffee shop. Some mobile wallet processing takes as little as 2.4 seconds, and you don’t even have to bring your wallet to the store—just your smartphone.

Apple Pay, Samsung Pay, and Android Pay are all working to streamline their systems and overcome the greatest challenge of all: getting the average consumer to ditch plastic cards altogether. 


Chip Vs. Mobile Wallet Safety 

There’s a lot of debate over which method of payment is more secure: chip or mobile. But where one has seen more adoption (chip technology), the other (mobile wallets) is looking to springboard off the chip.

According to a paper by officials from the Federal Reserve Banks of Atlanta and Boston, the “…contactless mobile solution provides the framework for the enhanced security present in the EMV chip+PIN card environment, while also introducing new security layers unique to the mobile phone, including password protection to operate the mobile phone and access applications securely embedded in the phone.”

And that’s exactly what mobile wallets plan to do moving forward, assuming they can get consumers on board with the idea of paying for everyday items with their phones.

At the end of the day, mobile wallets will be faster and safer than cards (with or without chip technology), so it’s odd to see so much retail commitment when it’s possible that mobile wallets could make chip technology obsolete.