Consumers do not yet see value in integrating a mobile wallet into the user’s cell phone as they may not really understand how these solutions are supposed to enhance the payments experience.
Plano, Texas (PRWEB) October 31, 2013
At a teleconference hosted on October 24th, 2013, outlining the current state of mobile wallets, Paytroniks president Joe Frisz explained that these solutions had yet to gain major traction in the U.S. market due to two key factors, one of them being that the solutions currently available do not have a strong value proposition for consumers and that the present offering of over 150 solutions is causing confusion and fatigue amongst American consumers.
Frisz pointed to recent survey numbers released by Consult Hyperion and First Data that over 60% of respondents answered that they are not interested in a mobile wallet. "The numbers are weak and our conclusion is that consumers do not yet see value in integrating a mobile wallet into the user’s cell phone as they may not really understand how these solutions are supposed to enhance the payments experience. In addition, if a consumer has to download several wallets to pay at different stores or with different types of cards, doesn’t that defeat the purpose of having a consolidated mobile wallet and a simplified payments experience that these solutions promise to deliver?"
In spite of the current low interest, Frisz did emphasize that he does see major opportunities for mobile wallet offerings in the future, but first several things have to happen in order for these solutions to become a prominent feature of the payments experience in the marketplace. Frisz stated in the teleconference that he first predicts that Square and PayPal will battle it out in the race to become the de facto mobile wallet-of-choice for consumers and customers alike. "Both PayPal and Square are developing various mobile wallet solutions for different segments of the market, however each company will have a different positioning strategy. Whereas Square is looking to become a mobile extension of traditional payments with wallet services that are sleek and easy to understand for merchants and consumers alike, PayPal will continue to invest heavily on mobile wallet offerings that compliment its person-to-person payments model in a continued effort to become a viable but distinctive fourth payment network in addition to Visa, MasterCard, and American Express. In PayPal’s case, expect them to focus their investments on mobile wallet solutions that integrate innovative technologies such as Bluetooth Low Energy (BLE) and in the process create unique experiences for the consumer.
In the next 6 to 12 months, Frisz also expects mobile wallet offerings to decrease, and major players in the industry will soon acquire many of those solutions that are currently in a pilot or commercial stage or these same solutions will simply run out of money to operate. In the longer term, he sees only 4 to 5 mobile wallets, PayPal and Square included, becoming mainstream while several smaller players look to fill alternative payment niches.
Frisz wrapped up the teleconference by saying that the eventual 4 or 5 mainstream mobile wallet offerings will effectively become repositories for the customer’s payment habits, containing payment cards, account histories, loyalty programs, couponing services, and real time promotions. "These mainstream solutions will most likely be technology agnostic, incorporating Near Field Communications, BLE, QR codes, and other payment enablers onto them. The key differentiators will most likely be driven by the merchants that form an exclusive relationship with a particular mobile wallet provider in order to provide unique services to consumers." He cited as an example of this mobile payment start up MCX. "MCX will most likely offer a mobile wallet as part of its solution and the company is already backed by over 40 retailers. It is no accident that only one of these retailers is also part of Apple Passbook’s mobile wallet offering, that merchant being Target." Frisz concluded, "the good news is that as these solutions will primarily be driven by merchants, the consumers stand to win big as they are increasingly enticed with special offers and rewards as these different mobile wallets jockey for top-of-mind positioning."