Bring Your Own Wallet

Today, the mobile wallet?is an overused buzzword discussed and debated by a variety of industries. Payment companies, financial institutions and merchants of all sizes are all vying for consumer attention. Technology companies, mobile network operators (MNOs), start-ups and even marketing companies are joining forces to innovate in this space. Though many are talking about it, asking a simple question like what is a mobile-wallet? brings surprisingly different answers depending who you ask.

The competition heats up

A question often asked is who could win the ‘wallet wars’ in the years to come? Isis Wallet was launched just a few weeks ago and is heavily backed by three of the top MNOs (Verizon, AT&T and T-Mobile). Google Wallet has finally escaped the clutches of MNOs by introducing Host-Card emulation in Android Kit-Kat. Are they in a position to reverse their wallet downfall? PayPal has started piloting their in-store beacon payment experience. With over 100 million credit-cards on file, is PayPal going to be the winner again? Will MCX wallet, with its support from all major retailers, be the Holy Grail for merchants? Can Square re-create their m-POS success in the wallet world? Apple’s passbook shows huge potential by itself. With the subsequent introduction of finger-print biometric and iBeacon in iOS7, is Apple in a better position than others?

Generic vs. merchant

These questions, however, are based on an assumption that a multi-purpose generic wallet will emerge as the winner. Considering that the mobile payments revolution is still in its nascent stages, it’s too early to assume that a single generic wallet will triumph over a merchant-specific wallet such as a Starbucks wallet. Starbucks claims that more than 10% of store sales are driven by its mobile wallet app and is the only success story in this space. The generic wallet fails to provide any credible proof to challenge this. So, the real question is: who will win the generic wallet vs. merchant-specific wallet war?

As far as merchants are concerned, this question need not be fully answered before they dive into their mobile wallet initiative. Here’s why: most of the wallets mentioned above try to solve the mobile payment challenge. But payment is just one part of the larger wallet ecosystem. Until other ambitious players solve the mobile payment challenge, merchants can use stop-gap payment solutions while focusing on the rest of the wallet ecosystem.

Bring Your Own Wallet

The most practical approach then would be for a merchant to follow the mantra, ‘your app is your mobile wallet.’ By building your own-brand mobile wallet, you can access customer profile information (demographics, purchase behavior, spending patterns) and track transactions which would otherwise be sold to competitors. Combining such valuable information with unique capabilities that smartphones offer, new and innovative solutions can be created to boost your sales, up-sell, cross-sell and elevate customer experience to a whole new level in several different ways:

  1. Improve the in-store shopping experience and customer engagement: staff can be equipped with mobile POS devices; in-store navigation can assist customers to the exact location of a particular product; access to store inventory can identify if a particular product is in stock; product comparison and user reviews can strengthen customer confidence; mobile ordering, smart-checkout and in-store pickup can reduce queue wait times.
  2. Increase customer loyalty and invite repeat-visits: access to digital loyalty/reward cards from the wallet; real-time rewards information access; creating badges and rewards gamification to increase customer spend; geo-fencing, to check-in customers and offer a personalized experience.
  3. Increase customer base using innovative offers: offering location based offers when the customer is in vicinity of the store; iBeacon technology to identify if a customer is checked into the store and leveraging that for targeted sales to motivate in-store purchases. This can also be used to bring your mobile wallet to the forefront without getting hidden in the fourth home screen.
  4. Support a payment solution that works today: use a stored-value digital card that the customers can refill with their linked bank accounts; or use a white-label mobile payment provider like Paydiant if you prefer to support all card networks from your mobile wallet. Regardless of payment option chosen, integrate it with your rewards program; offer additional incentives for consumers who use your mobile-wallet; ensure tight integration between the mobile payment system and the rest of the mobile-wallet ecosystem.
  5. Support generic mobile payment providers when they finally figure it out: eventually, the generic wallet providers will figure out a standardized way to make a payment at the physical or virtual POS. Design your mobile strategy to be flexible to support them so you don’t lose generic wallet customers. Your own loyal customers can be appropriately incentivized to continue using your mobile wallet.

Remember, the existing magnetic-stripe based card payment experience is not broken. It works, customers understand it and more importantly, they are happy with it. So, payment is not the problem you need to solve. Neither should you wait for generic wallet providers to solve the m-Commerce challenge for you. By placing your bet on your own unique mobile wallet today, you can focus on creating what adds value – a new and improved relationship with your customer and rewarding them with a pleasurable shopping experience.

The article was originally published on bobsguide on May 8, 2014 and is re-posted here by permission.

Mobile Payments: What is Tap & Pay?

What is Tap & Pay?


When we use a Contactless Card to tap on the Contactless reader to?make a payment, instead of swiping a magstripe card, we are essentially using Tap & Pay technology. The same goes for any NFC enabled mobile device that support Card Emulation Mode – like Android and Blackberry. Tap & Pay is just a marketing terminology. You may also see it referred to as Tap-n-Pay, Tap to Pay, Tap & Go, Wave & Pay and so on.

Mobile Payments Blog Series

Welcome to the Mobile payments FAQ and?not so FAQ?series?and you are on FAQ?#8.?The idea behind this series is to?share and learn as much as possible about the field of mobile payments.?If you like, you can read all of the FAQs on the Mobile Payments?category or by visiting the Table of contents page.

Mobile Payments: What is a Contactless Chip Card?

What is a Contactless Chip Card?

Contactless chip cards are standard credit cards with an embedded contactless chip. Optionally, a MagStripe is also provided?for backwards compatibility.?These cards require?no physical contact with the point-of-sale (POS) terminal. To make a payment, the consumer holds the contactless card in close proximity (less than 2-4 inches) to the merchant POS terminal and the payment account information is communicated wirelessly?via?Radio Frequency (RF).

Radio frequency waves are the frequencies within the electromagnetic spectrum associated with radio wave propagation. Many wireless communications technologies are based on RF, including radio, television, mobile phones, wireless networks and now, contactless payment cards and devices. Don’t confuse this RF with RFID technologies used in manufacturing, shipping and object tracking. Those are?designed to operate over long ranges (in the order of 25 feet) and typically don’t have built in security and privacy. On the other hand, the contactless cards that are used for payments are desgined to operate at a short range and come built-in with security and cryptography capabilities.

In the image above, the logo marked on the right hand side represents the?universal contactless symbol. If you see this logo on your credit card, you can be sure that it supports?contactless payments. Similarly, POS devices that support contactless payments?prominently display the same logo to advertise their capability for the same.

Typically, when you make a payment with contactless cards, you are not required to enter a PIN or?autograph your signature. This is intentional because, one of the most touted value-add features provided by a contactless card is?fast checkout times. Consequently, they are sometimes also referred to as Tap & Go?cards.

In the context of mobile payments, when you use a NFC mobile device (like Android or Blackberry) to Tap & Pay at the point of sale, you are actually using the same underlying technology as the Contactless Chip Card. The NFC controller chip?inside the mobile device is put into card-emulation mode. In this mode, the NFC chip behaves like a Contactless chip card thereby?transforming your mobile phone?into a contactless credit card.

Since mobile phones are way more powerful than a plastic card, they can hold as many cards as you?want and the NFC chip will be able to simulate?any or all of them. This essentially turns your mobile phone into a virtual mobile wallet. Now you know where the concept of Mobile wallets origintated from.

Mobile Payments Blog Series

Welcome to the Mobile payments FAQ and?not so FAQ?series?and you are on FAQ?#7.?The idea behind this series is to?share and learn as much as possible about the field of mobile payments.?If you like, you can read all of the FAQs on the Mobile Payments?category or by visiting the Table of contents page.