Early Mobile ‘Wallet Wars’ Lessons Learned
Mobile wallets are still in the formative stage of their development but a few lessons already are emerging, according to certain payment industry players sharing their experiences this week at CARTES America in Las Vegas. Inventing new ways to pay using a smartphone is not enough to justify the effort to develop mobile wallets because “cards work just fine,” said Chris Cox, First Data Corp.’s vice president of product development, during the conference’s “Wallet War” track. Several dozen mobile wallets exist, but their goals are fuzzy, Cox suggested. Consumers want mobile wallets with extraordinary services that recognize them and reward their commerce, Cox said. The danger is merely emulating cards in virtual mobile wallets, and the stakes are high, he warned. “Half of consumers feel that if a [mobile wallet] technology isn’t easy to use the first time, they will stop using it.”
Mobile wallet pilots also are providing some valuable insight into what may appeal most to consumers and merchants. Consumers in the Isis mobile wallet pilot that launched last fall in Salt Lake City and Austin, Texas, are “tapping twice as much” to pay at merchants with appealing offers, said Tony Abruzzio, Isis business development executive. Vending machines and fast food are driving strong everyday usage among Isis customers for low-ticket purchases, while dry cleaners and—to his surprise—veterinarians also are among merchants generating healthy traffic from users, he said, based on data from Heartland Payment Systems, which works closely with Isis.
American Express Co. also has gathered some intelligence about how consumers want to use its Serve mobile payment platform, said Stefan Happ, senior vice president and general manager of online and mobile. “We thought we’d have tens of thousands of young people” flocking to use Serve as a convenient payment tool, but instead Serve took off fastest with social media gaming aficionados, he said. “The gaming phenomenon in terms of scale has surpassed our most optimistic expectations,” he added. Succeeding in the mobile payments arena will take time and while no one knows yet how it will all shake out, “the prize is so high” it will be worth the challenge and investment, Happ said. “The [widespread] adoption of mobile payments … is as inevitable as the success of the Internet was.”