Thursday, 15 November 2012

Emptying Wallets

For as long as I’ve worked within this industry, there has been incessant talk of mobile wallets and how they are going to redefine our everyday payments. Last week saw the battle lines redrawn at Cartes as a whole host of banks, mobile operators, global payment schemes and new players exhibited their latest offerings.
The fundamental issue with many of these solutions that, by their nature, they operate within a limited circle and still do not possess the global reach that a simple piece of plastic still has. The lessons that came through so loud and clear in the Spring at Mobile World Congress about collaboration being key to success seem to have been stifled in Autumn. It may be simplistic but it remains easy to see m-wallets as a solution to a problem that doesn’t actually exist.

The most memorable metaphor I’ve heard on this issue was a conference speaker who drew a parallel between mobile wallets and handbags. Yes, there’s nothing to stop you owning as many m-wallets as you like but you’re only likely to use one at a time…which I assume is also true of handbags (although happy to be corrected!)  

That’s not to say an m-wallet can’t thrive in Europe today, but in order to generate both awareness and advocacy amongst a largely apathetic consumer market, it will require best-in-class convenience or rewards if it is going to displace established payment methods. Maybe this means having ID documents, reward cards, organisation memberships, season tickets and a whole host of intuitive discounts all in one place or maybe it means having a wallet that also starts your car, locks your door and turns off your lights…the case has not yet been proven either way.

Seeing the range of – competitive – solutions now available, there are also uncomfortable echoes with the NFC paradigm. Mintel’s research earlier this year showed that only a quarter of people with a contactless card have actually made an NFC transaction –  despite repeated efforts from the banks, there are no guarantees if you build it, they will come. Overcoming the usage challenge for m-wallet operators becomes tougher when you consider that, unlike NFC, providers are not working towards a common standard and, unlike NFC, operators do not have the Olympics as a ‘Big Bang’ showcase for the technology.

As with most accessories, the danger for the m-wallets of 2012 is that consumers’ attention switches elsewhere and they end up consigned to the back of the closet. That said, the battle between m-wallets should result in greater innovation and consumer focus and it will be intriguing which solution becomes the must-have accessory for 2013.  

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