As consumers continue to grapple with mobile wallet adoption, the question remains as to what it will take for that adoption to reach a global tipping point.
During a panel discussion Tuesday morning on “wallet wars,” moderator Meneske Gencer, payments leader of the fintech practice for PwC, asked members of a packed audience to raise their hands if they use mobile wallets on a weekly basis. About eight to 10 hands went up. “And we’re at a payments conference,” Gencer said.
Panelists reached these conclusions about the state of mobile wallets:
The value of mobile wallets to the consumer is a local phenomenon, therefore it’s challenging to scale globally.
Dan Armstrong, chief digital officer for BankMobile, a mobile-only bank that launched mobile payments in 23 markets, said that goals for a wallet-inclusive payment structure vary from country to country.
“The dynamics of the players – the banked and the underbanked – as well as what you can do with that wallet, are very, very different.”
Particularly among U.S. consumers, no one seems to have enough momentum to be interoperable. “Unless everybody comes to the party, there is no real party,” Armstrong said.
David Luther, executive vice president and chief business officer for Mozido, believes the mobile wallet will evolve much like credit cards did. At first people could only use the cards with certain merchants in the state where they lived. Eventually, they were able to use them nationwide and then worldwide. “I think the tipping point is going to be when some interoperability happens with these disparate wallets. We’re seeing it in pockets right now.”
He cited the example of Indonesia, which had a national initiative for all the country’s wallets to work together. India is doing something similar now to architect interoperability between wallets. “You’re seeing it in a country basis now and I think eventually you’ll see it on a global basis.”
Some mobile wallet use cases are stronger than others, said Serge Elkiner, founder and CEO of YellowPepper.
For instance, it’s easier to use Apple Pay for in-app purchases than to use mobile payments at the counter of a Walgreens, or anywhere else with NFC. The key, he said, will be to focus on the acceptance of a uniform payment method so that each merchant or vertical can build value. “We’re all focusing on the payment itself, but I think the payment is the least of the problem,” Elkiner said. “I think if we’re just focusing on the payment, there’s going to be failure.”
There’s no clear definition of what a mobile wallet really is, and how it’s changing over time.
Terminology problems have arisen because no one distinguishes between card-present and card-not-present issues, Armstrong said.
“We’re talking about two fundamentally different use cases. We’re not talking about the same thing sometimes when we’re talking about wallets.”
It’s important to understand what value needs to be delivered to the consumer segment that payments is trying to address.
Only through that will there be transformative experiences and value, such that it’s better than the methods that exist today, Gencer said.
Mark Williams, senior vice president of loyalty and financial services for Best Buy, said the question is why would consumers use a mobile wallet when they already have the convenience of a credit cards in their pockets.
“I’ve got to have the confidence to leave my wallet at home. And the moment I don’t,” he said.
Mobeam CEO George Garrick said that while consumers might be curious about wallets, it’s still much easier for them to swipe a credit card. In the U.S., mobile payments aren’t ubiquitous, and very few stores have NFC capabilities to support these payments.
“What all this adds up to is it’s just not a better experience at this point,” he said.
“There’s a whole ecosystem to support payments that hasn’t yet adapted to the concept of a mobile payment wallet. And that’s going to take a couple of years to happen.”