The conversation about payments technology I went to last week was nothing if not well-planned with the news cycle.

The 2014 Merchant-Financial Services Cybersecurity Summit, put on by Bloomberg with the backing of the multi-association Merchant Financial Cyber Partnership, came right in the middle of a week where problems with the current system were made even more obvious, and potential for the future was clear.

About those problems: Home Depot’s data breach came about in a somewhat unfortunate way. The company, aware of the issues its big-box pal Target has had, realized it was time to upgrade its payment systems and had signed a data-security contractor to do the heavy lifting. Problem was, by the time the company had started the upgrades, it was already too late, according to the Wall Street Journal—the attacker had already gotten in. That whole deal raised occasional questions from the audience about whether the solution the industry was latching onto at the event—higher levels of information-sharing to prevent cybersecurity issues—was enough to prevent a breach.

The dream for firms invested in mobile payments goes something like this: Someday in the near future, “What’s in your wallet?” could become “What’s a wallet?”

But on the other end of things, a technology had been announced the previous day that had suggested the potential for a world where all the drama of the Home Depot data breach (and the prior Target breach) would fade. That, of course, was Apple Pay, the new payments technology included in the latest iteration of the iPhone and the forthcoming Apple Watch.

How could it keep consumers safe? Well, the Apple system relies on both tokenization, which allows for transactions without the transmission of payment information, as well as the use of fingerprints, which allow consumers to easily confirm their identities on the fly. Currently, retailers are asked to handle actual payment information and physically confirm a consumer’s identity—two things that add complexity to the payments process and raise security issues.

The dream for firms invested in mobile payments goes something like this: Someday in the near future, “What’s in your wallet?” could become “What’s a wallet?”

We’re not there yet, but we’re a lot closer than we were even a week ago.

A Space Full of Competition

Apple’s ability to create interest around mobile payments highlights how much industry groups have struggled to get in front of this conversation. Despite having multiple years of lead time, industry efforts and tech companies have failed to make a dent in the market. Some examples:

In Britain, a mobile-payments collaboration called Weve failed to drum up much interest and instead drummed up much infighting between the mobile carriers putting it together, leading to an effective shutdown of the group’s main initiative last week.

An American equivalent to Weve, also led by mobile firms, is having slightly better luck, but (frustratingly, I’m sure, for them) has drawn more attention for its necessary name change—once Isis Mobile, now Softcard—than its technology. However, the tech is similar enough that Softcard hopes to latch onto Apple’s coattails.

The Merchant Customer Exchange, a collaboration among retailers, has taken some time to get off the ground, but its interchange-fees-avoiding solution, called CurrentC, is nearing a 2015 launch. Notably, Walmart is leading the way on the standard—something that led to some awkwardness on the summit stage as Walmart Senior Director of Payments Strategy Reed Luhtanen corrected the panel moderator on the company’s decision not to join in on Apple Pay.

Even in the tech sector, payments have struggled to win big. The startup Square, which reportedly spurned a buyout offer from Apple, has had some success with indie retailers in particular, though its platform is still based on the same plastic cards everyone else uses, and the thin transaction margins have the firm looking to diversify. And Google Wallet, which relies on much of the same near-field communication (NFC) technology as Apple Pay, has failed to connect with consumers to the same degree as even Square.

When it comes down to it, the one true winner with mobile payments has been Starbucks. Good for them, but what about everyone else?

Payment Inertia

The answer to why mobile payments have struggled to truly take over came from Walmart’s Luhtanen, who noted something pretty interesting about his company’s customer base: “We accept millions of checks in our stores today. Cash is still the largest number of transactions for us. So there’s a lot of inertia behind every type of payment that’s ever been produced.”

Obviously, persuading people to use phones where they might have used loose change or credit cards in the past isn’t always a winning transaction—and and even if Apple Pay scores a foothold in the market, retailers will have to keep accepting the old technology.

While Apple made a convincing case of how annoying credit cards were to use during its presentation last week, the leap from credit cards to mobile payments nonetheless is a smaller leap than some the tech giant has made over the years. (Let’s put it this way: Replacing a wallet with a phone is a less impressive trick than turning a room full of CDs into a device smaller than a Walkman.) No matter how cool the technology may be, the benefits of mobile payments are a lot more obvious on the retailer’s end than the consumer’s.

But even for retailers, challenges persist. For one thing, the technology has to be as simple for the rank-and-file employees as it is for the consumer—a challenge in the past for NFC, a technology that a relatively large number of retailers accept but has struggled with uptake so much that companies like Best Buy and 7-Eleven have ditched it.

And this isn’t even getting into the weeds of the regulatory issues that are sure to arise from technologies that are tied closely with two heavily regulated industries: the financial sector and the telecom sector.

So, credit to Apple for getting the mobile payments ball rolling again. But simply having a cool technology may not be enough to make a dent in the space.

Maybe what it really needs is buzz. If that’s true, the right company is certainly on the case.

(Apple press photo)