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April 26, 2012


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Hmm. I have such a hard time keeping track of mobile wallet developments these days. Wasn't O2 supposed to be in a big NFC rollout with Barclaycard, or was that someone else? Oh, now I see; NFC is "coming soon." Scrupulous honesty on the chart then, except that by the same standards you'd have to give PayPal digital wallet functionality. And it's hard to believe that Google, the king of search, wouldn't have some sort of comparison feature. I note a lot of partners in there - is this O2's wallet, or FIS? Perhaps it should be renamed "the Fog of War."


In the search for differentiation all the players in the charts have come at this from slightly different angles to be gin with but it won't be long before all the boxes show green ticks for all suppliers. What will be intriguing will be whether consumers will go for pre-pay in this context or whether they will prefer an account linked system like Paypal. The second question is whether these platforms cn deliver real value for merchants - I believe card-linked schemes will struggle in this regard due to the structural cost of interchange. Finally, will the consumer offers be compelling enough to drive adoption and the inconvenience of pre-pay? We shall see.


Interesting summary table. Assuming it is accurate and that these are the top 5 mobile wallet players, it tells a disruptive story: 2 are Telcos, 2 are Web giants and only one is a Bank (with the least ticks...). A key customer touchpoint of a financial service relationship is payments and money transfers. These services were traditionally initiated and processed though Banking products & networks. Even when these activities require -necessarily- the use of a banking product such as a credit/debit card or a bank account, customers under these m-wallet models are 'migrating', or experimenting with non-banking service channels. What does this really mean? Apart from the obvious transaction-fee sharing with non-traditional players, Banks stand to lose interaction with their customers at POS (point-of-service) and branding capability. I think Banks need to choose a clear strategy on what they want to do and act on it, between two main options: being a primary service channel with their own branding or just a processing channel servicing a non-traditional player. It seems that at least Barclays is crystal clear about this...

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