Report: PayPal, LevelUp, Starbucks, Google and Square Front-Runners in Mobile Wallet Race (Jan. 29, 2013)
Jan. 29, 2013
Mobile wallets are far from fully developed, but a handful are gaining an early edge on competitors based on ease of use and payment options, according to new analysis from Carlisle & Gallagher Consulting Group. The firm’s “Mobile Wallet Market Analysis” set out to analyze “apps for smartphones or tablets enabling consumers to organize payment cards, coupons, vouchers and identification to facilitate financial transactions.” Among those, apps from PayPal, LevelUp, Starbucks, Square and Google Wallet are the “front-runners” so far among more than a dozen examples the firm studied in January. The Charlotte, N.C.-based firm, established in 2002, which says it provides technology and strategic consulting services to seven of the top 10 U.S. financial services organizations, based its analysis on a broad range of factors including setup, merchant acceptance, checkout experience and overall functionality. Carlisle & Gallagher in June 2012 released a study of 605 U.S. adults that suggested 48 percent of respondents are interested in using a mobile wallet, and 60 percent of that group ranks “payment choice” as a top feature.
Among mobile apps from tech firms, the Carlisle & Gallagher’s team of 20 analysts ranked LevelUp first, for its “functionally rich” services, followed by Square, for its “simplicity,” then PayPal, for its breadth of payment options. Google Wallet and Apple Inc.’s Passbook also were listed among the front runners. The analysts did not rank Isis due to the limitations of testing during its two-city pilot. Among merchants’ wallet apps, the analysts ranked Starbucks first, followed by Amazon, Dunkin Donuts, Target Corp. and Wal-Mart Stores Inc. Among card networks, MasterCard’s PayPass Wallet Services slightly bested Visa’s V.me wallet and American Express Co.’s Serve, based on payment options and merchant acceptance available so far.
Likening mobile wallet development to “the first lap of the marathon,” Peter Olynick, the firm’s cards and payments lead, tells Paybefore “no single technology is likely to dominate the market.” He predicts the lead will change with new entrants, such as MCX, and warns that mobile wallet developers have much work ahead to win market share. “Each wallet developer will need to enrich its offerings and create additional ‘wow’ experiences before consumers have a good reason to migrate from existing leather wallets to mobile wallets.”