Digital Wallets: Beyond Mobile Payments
September 27, 2012 | 1 Comments | Mobile Payments
I was catching up on a couple trade magazines on my flight home tonight and by the end of the second one, I had come across no less than 7 stories about mobile payments and wallets. The buzz is deafening! The interesting thing though is, consumers seem indifferent. According to CatapultRPM in the latest issue of Digital Transactions, 58% couldn’t care less about paying with their phone. And many are saying consumer adoption will be slow at best. Personally, as far as mobile payments go, reaching for my back pocket to grab a card out of my wallet versus reaching for my front pocket to grab my phone requires about the same level of effort. But if I could digitize everything and ditch my analog wallet altogether, now that would be exciting.
Leave it to Apple to get it right. Instead of launching head strong into the fray with another payment tool they took a different approach. iOS 6 released last week with Passbook, which seems to be a nifty tool to de-clutter my wallet by storing a digital version of many of the things in my wallet. Apple will certainly be amongst the big players in the mobile payments world, with 180 million account holders with saved credit card information on iTunes, they have a huge network to leverage.
Other major players include PayPal, Google, ISIS and retailers themselves via MCX, but their solutions include very limited support at the point of sale today. These and other entrants to the space seem to be more focused on getting their piece of the transaction stream revenue pie than on providing value to merchants or consumers. In most cases, their solutions will increase the cost to the merchant without providing much value to the consumer either. To gain broad adoption, there must be real benefits for all parties.
Apple, with their focus on the non-payment side of the wallet, is positioned to offer real conveniences and drive adoption. It’s a smart strategy. I’ve had iOS6 on my iPod Touch for a few days and even though I haven’t used Passbook just yet, I’m intrigued at what it can do, and more importantly what it might do to the leather wallet I carry.
Here’s what’s in my wallet at this very moment and my ideas for how I might pare it down with digital technology:
- Insurance and other non-secure ID cards – How cool would it be if you could take a card-sized photo of both sides and create a digital version of that card that allows you to “flip it” front to back, just like turning a page in an e-book. I have 5 such cards in my wallet right now that I’d love to ditch.
- Credit cards – It will take a while to sort out but I’m confident I’ll be able to use my digital wallet for payment.
- Boarding pass – Thanks to American Airlines’ mobile boarding pass app and Apple Passbook, I can eliminate the old paper boarding pass.
- Loyalty cards – Some of these are on my key chain, some are in my wallet… Passbook seems to require merchant participation, but I go back to the camera. 100% of my loyalty cards are barcode-based. Can I take a high enough resolution picture to use the stored image at check out? I’m going to try it for sure…
- Receipts – I travel a lot for work so I hang on to receipts for my expense reporting and my wallet is overflowing within two weeks of travel. Digital wallets should be able to store digital receipts and in the meantime I’m thinking my camera can help here as well. If Passbook will sort and store them I’m really getting somewhere.
- Business cards – Some phones can exchange contact info, but most of the time I get a card. The size is relatively standard and OCR programs exist to retrieve the data.
- Gym membership card and locker key – Those of you that know me know I don’t have either of those, but if I did I would darn sure want it in my phone.
- Driver’s license – I may always need this for TSA and the occasional policeman that pulls me over for speeding, but it’d be nice to have a different form factor. I can keep this but slide it under the case that houses my phone.
- Cash – While I can pay for 99% of my purchases with electronic payments, I still feel best with cold hard cash in my pocket. I just saw a nifty phone case with a money clip on Amazon…
Out of 9 things I want to eliminate from my wallet, only two or three of them are really payment-focused. This leads me to conclude that the company that wins the larger share of the “digital wallet” will be the one that focuses on the value to the consumer and lowers costs for the merchant.
So what do you think? I’d love to hear what’s in your wallet and your creative ideas for making it digital…