April 9, 2019

BARAN | What’s Your Venmo?

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Many of us at Cornell use some sort of mobile payment system multiple times a week, if not nearly every day. Venmo, Uber, Apple Pay, Lyft and PayPal are just some of the mobile payment platforms linked to our debit and credit cards that we rely on. Generation Zs and millennials turn first to mobile wallets when we’re with friends. But to our great frustration, we rarely find the same ease of payment when dealing with merchants. Potential buyers in our demographic often find ourselves unable to make purchases because we don’t have cash or a card on us in person. Instead, we’ll Venmo a friend who does have a means of paying or simply go without a purchase. Sellers everywhere are letting profits slip through their fingers by not accepting mobile payments.

This phenomenon is somewhat paradoxical when the ubiquity of virtual payment is considered. People make purchases on Amazon or via PayPal on computers every day without batting an eyelash, but some may balk at the idea of paying for food at any restaurant with our phones. And it’s not just buyers. Retailers too are hesitant to make the change to accepting mobile payments. The two platforms — computer-based and mobile device-based — are essentially the same, but one gets a bad rep sometimes. Why?

Well, Americans are infamously concerned with privacy and security, particularly when it comes to unfamiliar entities or systems that tap into our wallets. Many, especially older generations, are distrustful of paying for mundane things via their phones. One of my cadre members in the Army ROTC program represented this distrust well when I asked him his opinion on mobile payment. He does not use any online mobile payment apps, and said, “I don’t like putting my personal stuff on my apps.” Online shopping has developed independently of physical shopping, which may explain the broad, intergenerational adoption of the practice. Mobile wallets, on the other hand, have broken into the consumer scene in the past decade; for that reason, in-person shoppers continue to reach for credit cards and cash. However, with a strong international following coupled with strong support from younger Americans, mobile payment systems are quickly finding traction in daily life in the United States.

According to a report by the Mobile Payments Conference, nearly 70 percent of Chinese Internet users use their phones to pay for things ranging from food to car services. Almost one-third of the population of Kenya does the same. Meanwhile, in the U.S., banking companies like American Express expect young generations to drive mobile payment usage in the future. Young Americans are more amenable to using mobile apps, more trusting of digital money transfers and engage with their mobile devices more than their elders. While older generations have grown to use systems such as PayPal and participate in online shopping, millennials and the generations below them are more apt to use platforms like Venmo and Apple Pay.

Slowly but surely, retailers in the U.S. are recognizing that they can bend platforms that young adults now primarily use to split rent and bar tabs to their advantage. In an effort to increase profits and convenience, and keep with the trends of the demographic to which they sell, almost 2 million merchants now accept Venmo, including Urban Outfitters and Abercrombie and Fitch.

There are sundry advantages to integrating mobile payment into the U.S. economy. Using phones to pay is convenient for both customers and retailers. Stores can cut down on expenses by jettisoning the costs of point of sales equipment. Mobile payments are also environmentally friendly as they do away with the need for receipts and other paper uses at stores. Retailers could have better access to consumer data through purchase tracking software on payment apps.

However, it is true mobile payment isn’t all great. There are some increased security risks with phones compared to traditional methods. Due to the large variety of payment apps, it could be difficult for businesses to standardize payment if they wish to make the digital transfer. Also, users and businesses alike are slow in adopting the technology.

Max Ringer ’21 provided an additional detriment of adopting mobile payment systems, one that I hadn’t previously considered: This technology may be discriminatory towards low-income people. “Poor people don’t have Apple Pay,” Ringer said with a shrug. “They can’t make it mandatory because some people . . . will be left on the outside.”

If taken with a mindset of efficiency and ease, mobile payments are certainly the future of shopping. As my generation and others who grew up surrounded by technology mature, the practice will only become more prevalent. Retailers are recognizing this, but in the opinion of many college-age students, they are doing so much too slowly.

Christian Baran is a freshman in the College of Arts and Sciences. He can be reached at cbaran@cornellsun.com. Honestly runs every other Friday this semester.