Recently, I was in Orlando for a conference, and I stayed in a Disney World hotel that offered conference rates. It gave me a chance to test out the new Magic Band that Disney World provides both park guests and hotel guests. The NFC-equipped wristband acts as your room key, park entrance ticket, and debit or credit card for purchases throughout Disney's central Florida empire.
The Magic Band is a good proxy for the notion of using your smartphone for mobile payments. After all, the first version of this vision, Google Wallet, relied on NFC-equipped smartphones. It also provides insight into the second version of this vision, in which the device communicates over an Internet connection to handle the transaction.
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Wearing a watchlike device was an odd experience, because I haven't worn a watch since I left time-obsessed CBS in 1984 (an act of rebellious freedom for me at the time that stuck). The usually user-experience-savvy Disney really messed up its terminals by having a tiny keypad for entering the required confirmation PIN; although perfectly sized for Tinkerbell, it is difficult for human beings to use, as the staff noted apologetically when we kept fumbling our entries.
Those issues aside, as a payment system, Magic Band showed why mobile payments don't have a real future any time soon.
They're no more convenient than using plastic
It takes no less time to pull out a debit or credit card, swipe it, and enter a PIN as it does to position the Magic Band, hold it until the Mickey Mouse icon on the register glowed green, and enter a PIN. On a smartphone that connects directly to the sales terminal via NFC or Bluetooth, you might save a few seconds pulling out the phone versus digging a card out of your wallet, but you'll likely lose those seconds in the terminal's reaction time to the smartphone. If you're using a mobile app, you'll spend much more time navigating to, opening, and navigating within the app than you would pulling out a card.
You also wait for the paper receipt. Although your final Disney World bill gives you a list of all your transactions, it doesn't give you an itemized list like a paper receipt does, so you don't know what you bought. No doubt that's why Disney World meticulously gave everyone a paper receipt. And there's no online transaction history to monitor your spending in lieu of paper receipts. Any business traveler knows you need to have to get your expenses reimbursed, and shoppers know many retailers still need to accept returns.
Keep in mind that Disney World is a completely controlled, well-integrated world; its sales terminals record the specific translation details, so they could show up on the final bill or an online transaction log if Disney wanted to do that. In the outside world, you won't get that level of detail consistently from merchants. Although your bank's or credit card provider's website and mobile app show your total purchase amount for each transaction, they don't provide the details of what the transaction covers -- the payment systems aren't designed to get that detail from merchants. Again, you'll need to wait for a paper receipt or provide an email address to get it (then receive endless marketing spam).
It's hard to work with multiple accounts
A Magic Band is tied to whatever credit card you provided to Disney World, so all charges go to it. In the outside world, we use multiple cards. You probably use both a debit card and a credit card. You may have another one or two cards associated to a household or joint account with your spouse. You may have a corporate credit card. You may have a flexible spending account card for health care.
How do you determine which account the payment comes from? At Disney World, you can't. The same is true of Google Wallet, as well as Internet-routed payment systems like Square Wallet that is widely used by Starbucks customers.