Mobile Wallet Providers Fail To Answer The Key Question

Mobile Wallet Providers Fail

Way back in 2001 Apple introduced iTunes, and followed this shortly afterwards with the release of the iPod. In the preceding years, there were a few personal music players but they had not captured a great slice of the public’s attention. In the years that followed, a flood of devices arrived on the market. Remember the Diamond Rio, or the Zune? As we know, within a few years Apple triumphed and then went on to completely transform the market for personal music devices.

Call me a cynic but the current mobile wallet market feels a little like those days when personal mp3 players were filling the shelves, but a clear winner was yet to emerge. Now, it seems a week doesn't pass without a story about some new development in the mobile wallets world. However, mobile wallets as a product category is yet to develop a solid foundation. Sure, isolated pockets of success can be found, but if recent surveys of ApplePay usage mobile wallet usage are an indicator, overall usage remains low. It doesn’t seem to me as if I’m missing out on anything, and I work in the payments industry.

So what does all this mean? Are we at the dawn of a mobile payments revolution, or are we merely witnessing a series of attempts by market participants to run live market experiments? In my opinion, the eventual winner will be the company that provides the best overall system that benefits all parties involved in the consumer payments value chain. That is consumers, merchants, banks and even the networks. A tall order, as we can even see Apple struggling for traction. 

I’ve always believed that iTunes provided the unifying force that underpinned Apple’s amazing run of device success from iPod to iPhone to iPad. With the exception of Starbucks' closed solution, I can’t think of another mobile wallet that provides anything like the right mix of utility and benefit to everyone in the payments value chain. Instead, we have a range of narrow technology-centric solutions all selfishly pleading for attention, but all somehow failing to answer that key question in the back of our minds, ”What’s in it for me?”

Written by

Stephen Peters