CR Money Minute: A better mobile wallet?

More than 18 months ago, Google Wallet was launched on the Sprint cellular network amid hoopla that payment-by-smart-phone technology at cashiers nationwide would replace your plastic debit and credit cards. Since then, AT&T, T-Mobile, and Verizon Wireless have begun testing their own Isis Mobile Wallet, and other companies have also jumped on the bandwagon.

But smart phones have been slow to catch on as a payment device, because plastic is simpler to use and accepted by many more merchants.

A Google Wallet spokesman offered nothing when we gave him a chance to brag about his product’s great progress, and Isis didn’t even respond to our request for an update; sure signs…ahem…of success?

Now, however, a company you probably never heard of, FIS, may have built a better mousetrap. See for yourself on the Consumer Reports Money Minute.

The value added, we believe, stems from the fact that the FIS mobile wallet is designed as an extension of popular mobile banking apps. Some 50 million U.S. consumers have already adopted banking by smart phone to check their account balances, transfer funds, pay bills, deposit checks, and securely conduct other banking business almost anywhere there’s a cellular signal. Better yet, mobile banking reduces much of the inconvenience of traveling to, and waiting in line at, a physical bank branch or automated teller machine.

Another key to the FIS mobile wallet is its use of QR codes, those square digital Rorschach blots comprehensible only to cell phone cameras, to process payment. You don’t need a special phone to pay at the checkout, and the merchant doesn’t need special equipment to accept payment. You simply use the camera built into your smart phone to scan a QR code (shown either on a digital display screen or on a very low-tech printed paper receipt) and process the payment. That simplicity means that more merchants can more easily accept payments via the FIS mobile wallet.

FIS is a behind-the-app provider of mobile banking services used by more than 20 million consumers, an important leg up on Google and Isis. An FIS mobile wallet, promoted under their client banks’ names, would thus be a simple add-on feature to the existing customer’s already familiar mobile banking app.

We also believe that closely regulated financial institutions, subject to hard-won consumer protections, should be the ones to deliver mobile payments for the same reason we wouldn’t turn to a bank to conduct an Internet search or put through a cellular phone call. Sorry AT&T, Google, Sprint, T-Mobile, and Verizon Wireless.

—Michelle Jun and Jeff Blyskal