Acceptance is critical.

With The Wall Street Journal reporting this week on Google increasing its role in the mobile payment scene by pairing up with MasterCard Inc. and Citigroup Inc., Bank Innovation started wondering what would it take to get merchants to replace their POS terminals with NFC-equipped technology, which is key to mobile wallet adoption.

Our conclusion: Someone needs to pay for the replacements. Maybe Google? Maybe someone else who will profit off the POS disruption? Regardless of the backer, having a terminal-funding mechanism in place seems imperative in order to break the chicken-and-egg conundrum. Why? Merchants need a clearer motive for replacing their systems. And, most likely, that value proposition will not exist until consumers demand the payment capability.

True, terminals have lifecycles, forcing merchants to replace them when they die. Some vendors are even reporting that the terminal lifecycle is shorter today than in years past. Plus, VeriFone announced that all of its new POS terminals will include NFC. But still, not every terminal is dying, and the impetus for replacing healthy ones remains ambiguous at best for retailers across the nation. Here’s why: typical small merchants do not want to be disturbed from their workdays. For one, they’re busy. Second, a new system requires staff training. Third, merchants are skeptic of “latest and greatest” sales pitches because of the lies they have heard in years past. Four, if consumers are not demanding the wallet cellphone technology, what’s the point of shaking up their terminal setup?

Certainly, some of this merchant reluctance is manifesting itself in a number of contactless mobile payment pilots across the country. Relatively few merchants are on board with NFC. However, there seems to be some organic progress in NFC acceptance.

Take U.S. Bank, for example. A few weeks back, U.S. Bancorp.’s Executive Vice President and Chief Strategy Officer Howell “Mac” McCullough indicated an ebb in merchants’ shyness to participate in its cell-phones-as-payment trial. McCullough told Bank Innovation that he had noticed that retailers are becoming more accepting of the payments trial, which is crucial to the future success of the endeavor.

“In general, we are seeing good acceptance and are seeing more retailers provide contactless devices,” McCullough said. “That is really the key to get adoption across the marketplace. The more retailers, the more we will see the capability. Visa and MasterCard started the same way. They needed acceptance so consumers would ask for it.”

Despite some progress, McCullough believes ubiquity of mobile payments is still a few years off. Naturally, that has to do with both winning over retailers and influencing consumers’ desires for it. Just like retailers, consumers will likely require incentives from digital wallet players to forgo using their physical wallets and “opt in” to pilots that allow others to track their actions. Perhaps even the VeriFone of the worlds will have to pay consumers to opt in — at least at first.