It's still weird to make mobile payments in the US. Here's why

The future of America's payment system still feels half-broken. But a trip over to the UK showed how much better things could be.

Scott Stein Editor at Large
I started with CNET reviewing laptops in 2009. Now I explore wearable tech, VR/AR, tablets, gaming and future/emerging trends in our changing world. Other obsessions include magic, immersive theater, puzzles, board games, cooking, improv and the New York Jets. My background includes an MFA in theater which I apply to thinking about immersive experiences of the future.
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Scott Stein
5 min read

Mobile payments on vending machines are easy. Other places aren't so much.


I pull out my phone. I tap it to the terminal. I'm told I can't use it, I have to use a credit card. I apologize, reach for my wallet. I feel like an idiot. This is me making payments in 2017.

I don't use my phone to pay for things all that much. Or, my watch. I use my credit card. This isn't because I don't trust my phone or my watch. It's because I know, at least half the time, that depending where I am they won't work.

And yet, I recently experienced a world where it did work, pretty much all the time. 

I was on vacation for two weeks with my family earlier this year. I didn't expect to use my watch to pay for things as much as I did, but that's what ended up happening. It started as an experiment: would it be easy to pay at Costa Coffee with my Apple Watch ? Then I went to WHSmiths, a bookstore chain. And I realized the tapas restaurant accepted it. And the museum. And London's Underground. And, basically, everywhere I went.

Coming back to America, I'm disappointed. There's just not as many opportunities to use it. And it's the reason the US still has a lot of catching up to do when it comes to mobile payments.

Watch this: Mobile payments are a mess. Here's why

In the UK, it's everywhere

I traveled in southwest England and in London, and contactless payment is basically everywhere. It's everywhere because it basically works as an add-on to relatively newer chip-and-pin credit card payments. I used Apple Pay everywhere, but there were plenty of Android Pay signs, too.

The US has adopted this a lot more slowly, despite promises otherwise, because plenty of people still have older swipe-style credit cards.

In the US, it also gets a lot uglier because the terminals always seem half-broken... or disabled. I walked to a Pret for a banana and, of course, I couldn't pay with Apple Pay. The staff told me to just swipe my credit card. Now I felt embarrassed wasting everyone's time trying to use my watch in the first place.

The UK's made for contactless payments, and right now the US isn't. Not to the same degree. Over here, I'm sometimes tapping, sometimes chip-inserting, sometimes swiping and sometimes using QR codes (my terrible New Jersey Transit mobile app for tickets, for instance). And, while many wearables like Fitbit and Garmin are adding mobile payments, too, those services work with far fewer banks than long-established players like Apple Pay, Android Pay and Samsung Pay.

Easier for a traveler, if it all works

When I was overseas, using contactless had its advantages: no signatures needed and a smoother transaction than using a physical credit card. Every time I put my chip-enabled US credit card in a UK credit card terminal, I still need to sign -- and I usually end up having my card inspected. For getting a coffee, it was easier to just do a quick tap.

It helped avoid using cash, and paying for more ATM fees. In the UK, cash gets particularly rough: lots of coins accumulate fast leading to heavy pockets. And my US credit cards usually involve extra signatures and unique treatments than the average UK-resident credit card.

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In the US: payment roulette

I've largely given up on trying to pay for things with my watch or phone in the US, because there are still too many places that don't accept it.

It's a chicken and egg feeling. If the terminals and stores all worked, I'd use it and stop reaching for my wallet. But the moment it's not there, I feel like an idiot for trying to pay with my watch/phone/band/etc. I apologize. I feel like Annoying Tech Guy. I quickly grab my credit card. I feel the eyes of everyone who is waiting behind me.

If I have to guess, then it isn't frictionless. And if it isn't frictionless, then it's not replacing my wallet. It's not difficult to use a credit card. Mobile payments need to be easier than that. And I'm obviously not leaving my wallet at home, because I can't. That universe doesn't exist yet.

Apple Pay is in 50 percent of US retail locations at the moment, according to Apple , and yearly transactions in 2017 are up 330 percent. But 50 percent also means there's a good chance a place won't accept it. Solid growth, perhaps: but it still feels like a coin flip in daily life whenever I enter a store.

"Today, mobile payments still make up less than 1 percent of overall in-store US transaction volume," says Jordan McKee, principal payments analyst at 451 Research. "Our research also shows that likelihood of using digital wallets has plateaued since the launch of Apple Pay." Even though around 90 percent of terminals have NFC capability, says McKee, it's still up to individual merchants to turn them on. CVS and Walmart are notable merchants that don't (instead encouraging retailer-owned payment services, like Walmart Pay).

Terminals need to be in easy reach

Tapping to pay means having a terminal in arm's reach. In the US, most restaurants hide their credit card machines behind a counter. In the UK, a mini terminal gets carried to the table. Tapping is as easy as putting in a credit card, and the two feel interchangeable.

On buses and on the Underground, the tap panels are also easy. Tapping with an Oyster card, a phone, a watch, they all felt the same. London's transit system works with tap-to-pay and mobile payments. New York's MTA plans to make a transition by 2020, but for now using a MetroCard is one more thing to take in the wallet I'm definitely not leaving behind.

Samsung was onto something with MST

Samsung cleverly addressed these problems, or applied a quick bandage to them with their Samsung Pay service by adding magnetic secure transmission (MST) -- a technology that mimics a standard old-fashioned credit-card swipe -- to its phones starting in 2015. It works at credit card terminals that don't have tap-to-pay or other mobile payment support. Samsung added this extra payment technology to its phones and its smartwatches (the Gear S3 has it, but the Gear Sport doesn't). It basically works as a close-range credit card replacement, but unlike NFC-based tap-to-pay, terminals won't notice the difference between MST and a normal non-chip credit card swipe.

In that sense, Samsung Pay bridges the gap brilliantly. Sadly, two years later, payment terminals in the US still feel like a mess. And, as a result, Samsung Pay's MST advantage is still a standout feature. But, even then, it's not always easy to use because card terminals aren't always in reach: at sit-down restaurants, for instance.

I won't use contactless payments until it's everywhere and automatic

The funny thing about tap-to-pay is it's supposed to be easier than pulling a credit card out of a wallet. If it fails once, or twice, I'm not going to try it again for a while. That didn't happen to me overseas, but it happens all the time in the US. But it reminded me that traveling with my phone and watch is a lot better than I expected. I wish I could say the same about how it all works at home. 

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First published Dec. 3, 5 a.m. PT.
Update Dec. 5, 8:31 a.m. PT: Added thoughts on Samsung Pay and its distinctions using MST technology.