Why Mobile Wallets Are Failing and Will Keep Failing

Normal wallets are simply too effective, no matter that the technology is millennia old.
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(Photo: David Darko/Shutterstock)

(Photo: David Darko/Shutterstock)

When I was 11 years old, I was given my first wallet for Christmas by an aunt and uncle. My father’s side of the family was so large that we organized a kind of raffle-ticket system to decide which pairs of relations would exchange presents so as not to leave anyone out and not overburden Santa’s sack with dozens of trinkets. These annual gifts were usually mundane and functional—chunky sweaters, sports equipment I wasn’t interested in—and the wallet seemed no different. Made of non-descript dark brown leather and stamped with a generic logo on the front, it stayed in a dresser drawer for months. Until, one day, I needed it.

The wallet became an inseparable part of my person as I gained independence. Suddenly, as a young teenager in my suburban Connecticut hometown, I needed to carry my own money. I got a learner’s permit that I kept in the wallet while driving with my parents. A debit card arrived, then credit. Cash came and went with alarming speed. The wallet ushered me into adult life. By the time I replaced it almost a decade later, the brown leather was rubbed shiny, the corners wrinkled like the crow’s feet around a grandparent’s eyes, and the flap pockets hung loose. It had served me well.

While smartphones have made a spirited attempt at becoming the only thing anyone need carry with the help of the mobile wallet, they fail in many respects to provide the stability and liquidity that physical wallets always have.

Today, the only thing I carry around as often as my wallet is my iPhone. But despite the best efforts of major technology companies, these two must-have accessories still haven’t become one. PayPal, Google, and Apple have all tried to capitalize on the $1 billion-plus U.S. mobile payment market by creating “mobile wallets,” smartphone-native apps that help users organize and exchange money, interfacing with bank accounts and credit cards. But none have caught on in any mainstream capacity.

That failure is in part because the apps are attempting to solve a problem that doesn’t necessarily exist. As New York magazine’s Kevin Roose points out, in the case of smartwatches, few outside of Silicon Valley are clamoring to adopt digital-only wallets. And users don’t feel the need for mobile wallets because their normal wallets are simply too effective, no matter that the technology is millennia old.

THE WALLET CAN BE traced back to ancient Greece; it’s mentioned in the third century B.C.E. poem sequence Idylls by Theocritus. The poet describes a carving in which a fox “setteth all his cunning” at a young man’s “wallet,” the word used in a 1912 translation by J.M. Edmonds. However, the line does not tell us what the Grecian wallet actually holds. “What, in ancient literature, are the uses of a wallet?” asks A.Y. Campbell in a 1931 essay in the Classical Quarterly. “A wallet is no modern lunch-basket, out of which come Derby-day salmon and champagne.” “The ‘sordid wallet,’” Campbell writes, “is the mark of the destitute or the hermit ... and into it goes anything and everything, whatever its owner may have the luck to strike. The wallet was the poor man’s portable larder.” Odysseus, for example, was said to have stocked his (apparently voluminous) wallet with meal for himself and 12 companions.

The boy in the carving, described as an artist, is tasked with guarding a vineyard in return for taking all the grapes he can fit in his wallet, but he becomes distracted as he weaves a locust trap out of reeds. The fox pillages the vines and empties his wallet. The youth returns home grape-less after a beating from the vineyard owner.

Wallets have long been containers for our livelihoods—in the sense of survival as well as financial solvency. The word itself likely descended from the Old North French walet, a roll or a knapsack, according to the Online Etymology Dictionary.

The 20th-century historian Lawrence C. Wroth describes a 16th-century Elizabethan merchant as carrying a “bowgett” or a “budget,” which held cash, accounts, and other daily tools of his trade. Richly decorated coin purses were popular during the Renaissance, like this 17th-century French creation of silk and metal in the collection of the Metropolitan Museum of Art, holding money as well as calling cards. The 17th-century diarist Samuel Pepys had a leather wallet inscribed with his name that a contemporary gentleman could recognize and take pride in.

The first paper currency in the West was adopted by the Massachusetts Bay Colony in 1690 (China printed money as early as the 10th century), and wallets as we know them evolved from there. During the Industrial Revolution, workers carried wallets full of bills as well as dried meat, tobacco, and small treasures. Today, our smaller leather billfolds hold cash, business cards, transportation passes, and nationally recognized identification. The wallet as a device has never strayed far from its role in ancient Greece as a portable tool for living.

Cash is accepted everywhere, even where cards aren’t, and digital apps haven’t even come close to replicating its universality.

WHILE SMARTPHONES HAVE MADE a spirited attempt at becoming the only thing anyone need carry with the help of the mobile wallet, they fail in many respects to provide the stability and liquidity that physical wallets always have. Cash is accepted everywhere, even where cards aren’t, and digital apps haven’t even come close to replicating its universality. Mobile wallets have a higher barrier to adoption than a piece of printed paper. Stores have to install a custom cash register; both parties have to agree on the system.

Wallets remain a useful metaphor. The mobile wallet app Clinkle, which even after years of development has stubbornly refused to launch publicly, presents a skeuomorphic replica of a leather wallet on the smartphone screen. Silicon Valley entrepreneurs even speak of “wearable wallets”—money apps embedded on smart watches—as if traditional wallets themselves weren’t already wearable devices.

Before mobile wallets replace the ones we keep in our pockets, they must become as universally accepted as cash is, as simple to use as swiping a credit card, and as dependable as a durable pouch made of cured animal skin. Even with all that digital technology can accomplish, these barriers remain a challenge. In the meantime, there is the wallet, or, for minimalists, at least a smartphone case with added storage space.

My current wallet has everything I need to get around my daily life in New York. Inside are enough bills for a few cups of coffee, plus debit and credit cards, my MetroCard, driver’s license, a gym pass, my health insurance card, and a sticker noting that I am deathly allergic to penicillin, just in case. A few receipts and business cards nest in the back. The leather is wearing out and the stitching slowly unraveling with all the work I put it through. I certainly plan on replacing it.

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