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The Mobile Wallet Landscape June 2012


Overview of the Mobile Wallet Concept

2


The Case for the Mobile Wallet

(Mashable, 2011)

3

The Mobile Wallet Landscape – June, 2012


The Case for the Mobile Wallet

•  Some
sources
predict
an
even
rosier
future:
 mobile
payments
are
forecasted
to
reach
 $984
billion
by
2014
(eMarketer,
2011)


4

The Mobile Wallet Landscape – June, 2012


The Three Categories of Mobile Wallets Mobile
Payment
 Services


5

Digital
Wallet
 Organizers


Comprehensive
 Mobile
Wallets


What
it
Is:
 These
NFC‐based
 technologies
allow
 users
to
pay
with
 their
mobile
phone
 just
as
they
would
 with
a
credit
card


These
services
 provide
a
digital
 way
to
aggregate
 things
like
loyalty
 cards,
movie
 Mckets,
and
airline
 boarding
passes


Offerings
in
this
 category
can
both
 make
payments
 with
a
mobile
 phone
and
also
 collect
the
user’s
 loyalty
cards,
 coupons
and
club
 memberships
in
a
 single
app


Examples:
 Square,
Google
 Wallet


Apple
Passbook


Windows
8
Wallet,
 ISIS


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The Two Sides of the Mobile Transaction Equation:

Systems that use a mobile device to accept or process payments 6

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Systems that allow users to pay with their mobile devices


How NFC Works

(Mashable, 2011)

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The Key Players in the Mobile Wallet Scene

8


•  Pay
with
Square
is
an
NFC‐enabled
mobile
 payment
app
for
both
Apple
and
Android
 •  While
not
a
full‐scale
mobile
wallet,
 Square
boasts
a
broad
set
of
features,
 including
a
naMve
loyalty
program
for
 parMcipaMng
merchants,
a
map
and
 directory
of
merchants
that
accept
Square,
 and
the
ability
to
automaMcally
open
a
tab
 for
you
when
you
walk
into
a
parMcipaMng
 business
 •  Square
also
offers
merchants
a
mobile
 processing
soluMon
for
credit
cards


9

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Strengths


Limita<ons


•  Supports
iOS
4.1
and
earlier
and
 Android
2.2
and
earlier
plaYorms
 •  CompaMble
with
Visa,
 MasterCard,
AMEX
and
Discover
 •  Broad
adopMon
on
the
credit
card
 processing
side
with
over
6
billion
 in
payments
processed
annually
 •  Early
entrant
to
the
mobile
 payment
marketplace
 •  Presence
in
both
mobile
 payments
and
POS
processing


•  SMll
not
a
full‐scale
mobile
wallet
 •  As
a
startup,
Square
lacks
the
 name
recogniMon
(and
deep
 capital
reserves)
of
some
of
the
 other
players
in
this
field


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• 

• 

• 

11

Google
Wallet
is
a
mobile
payment
 system
that
uses
NFC
to
make
 payments
at
any
MasterCard
 PayPass‐enabled
terminal
 While
it
is
not
a
full‐scale
mobile
 wallet,
users
can
sync
their
Google
 Offers
account
to
their
Google
Wallet
 Some
merchants
have
also
become
 Google
Single
Tap
merchants,
 allowing
users
to
pay,
redeem
offers
 and
even
earn
loyalty
points
with
just
 a
single
tap
of
the
phone


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Strengths


Limita<ons


•  Early
entrant
to
the
mobile
 payment
field
 •  Strong
name
recogniMon
as
a
 Google
offering


•  Currently,
it
only
supports
CiM
 MasterCard
and
Google
prepaid
 cards
 •  It
does
not
aggregate
loyalty
 cards,
membership
cards
or
gi_
 cards.
It
is
primarily
just
a
mobile
 payment
soluMon.
 •  Only
supported
on
four
phones:

 –  –  –  – 

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Samsung
Nexus
S
 Samsung
Galaxy
Nexus
 LG
Viper™
4G
LTE
 LG
OpMmus
Elite™



•  • 

• 

• 

13

Passbook
will
be
a
part
of
Apple s
new
 iOS
6

 Passbook
holds
the
user s
movie
Mckets,
 retail
coupons,
loyalty
cards,
gi_
cards
 and
airline
Mckets
in
a
single
digital
 applicaMon
 There
is
no
word
on
whether
or
not
 Passbook
will
support
NFC
mobile
 payments
 Payments
can
be
made
from
pre‐loaded
 cards
stored
in
Passbook,
for
example
a
 Starbucks
card,
by
scanning
a
code
that
 can
be
brought
up
on
the
screen
of
the
 phone


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Strengths 



Limita<ons


•  Passbook
will
support
iPhones
 going
all
the
way
back
to
the
3GS
 •  InformaMon
on
Mckets
will
update
 automaMcally.
So
if
for
example
 your
flight
changes
departure
 gates,
your
Mcket
will
 automaMcally
update
to
reflect
 the
new
informaMon


•  Does
not
appear
to
have
any
 mobile
payment
capabiliMes
and
 even
if
it
did,
no
current
iPhone
 model
is
equipped
with
NFC
 •  Only
available
for
the
iOS
 plaYorm


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• 

•  • 

• 

• 

15

The
Windows
Phone
8
OS
will
feature
a
baked‐ in
applicaMon
called
Wallet,
which
will
be
a
 full‐scale
mobile
wallet
 It
will
uMlize
NFC
 tap‐to‐pay 
technology
to
 make
mobile
payments
 It
will
also
feature
 secure
SIM 
technology
to
 aggregate
user
data
such
as
club
memberships
 and
loyalty
programs
 Users
will
be
able
to
virtually
 clip 
deals
or
 coupons
discovered
in
web
searches
and
store
 them
in
Wallet
 Users
will
be
able
to
scan
bar
codes
to
search
 for
discount
offers


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Strengths 

 •  Most
comprehensive
 mobile
wallet
available,
 combining
the
features
of
 Apple
Passbook
and
the
 features
of
Google
Wallet 



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Limita<ons
 •  Only
available
on
the
 Windows
OS
 •  Many
current
Windows
 phones
will
not
be
able
to
 upgrade
to
Windows
8
OS
 •  There s
no
word
yet
as
to
 whether
or
not
Wallet
will
 be
available
for
the
 Windows
7.8
OS



•  Isis
is
a
joint
venture
by
AT&T,
T‐ Mobile
and
Verizon

 •  Isis
uses
NFC
technology
to
serve
 as
a
mobile
payment
soluMon
 •  Isis
will
roll
out
some
Mme
this
 summer,
although
no
official
date
 has
been
announced
 •  Isis
features
the
ability
to
store
 loyalty
cards,
debit
cards
and
 credit
cards


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Strengths 



Limita<ons


•  Support
from
a
broad
coaliMon
of
 major
phone
carriers:
AT
&
T,
T‐ Mobile
and
Verizon
 •  Close
to
offering
a
full
mobile
 wallet
soluMon
 •  Isis
technology
is
supported
by
 HTC, LG, Motorola, RIM, Samsung, and Sony

•  Only
supports
Chase,
Capital
One
 and
AMEX
cards
 •  Limited
list
of
retailers
accept
it:
 Macy s,
Jamba
Juice,
Aeropostale,
 Foot
Locker,
Dillards,
Champs
 Sports,
and
Coca
Cola
as
well
as
 local
merchants
in
Salt
Lake
City
 and
AusMn
 •  Uses
its
own
NFC
technology
 rather
than
tapping
in
to
 MasterCard s
PayPass
or
Visa s
 PayWave


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Barriers to Adoption

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Barriers to Adoption

•  Not
accepted
by
all
merchants
 –  For
example,
Google
Wallet
relies
on
MasterCard
PayPass
 –  As
of
September,
2011,
there
were
140,000
merchants
 with
PayPass
in
the
U.S.
 –  In
comparison
there
are
200,000
fast
food
restaurants
in
 the
U.S.
 –  Having
Google
Wallet
would
be
like
being
able
to
pay
with
 Google
Wallet
at
every
fast
food
restaurant
you
visit,
but
 nowhere
else


21

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Barriers to Adoption


• 

Privacy
/
data
safety
concerns
 –  What
if
I
lose
my
phone?
 –  Is
data
stored
on
my
phone
protected
from
malicious
applicaMons?
 –  Can
my
credit
card
informaMon
be
intercepted
when
it s
being
 transmimed
by
NFC?
 –  Security
breaches
involving
Google
Wallet
and
Square
 •  SuscepMbility
of
the
Google
Wallet
PIN
number
to
brute
force
amacks
 •  Square s
failure
to
properly
encrypt
data
at
the
POS


22

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Barriers to Adoption •  Inadequate
technology
 –  Requires
a
smart
phone
and
in
many
cases
an
NFC‐enabled
smart
 phone
 –  Not
all
carriers
and/or
phone
models
are
supported


•  Even
when
the
technology
is
in
place,
it
doesn t
always
work
 as
it
should


23

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Barriers to Adoption


• 

Lack
of
a
clear
value
proposiMon
 –  In
their
current
forms,
only
the
Windows
Wallet
promises
to
truly
 eliminate
the
need
for
a
physical
wallet
with
loyalty
cards,
payment
 opMons,
ID
and
various
other
paper
documents.
There
is
no
advantage
 to
leaving
your
credit
card
home
and
sMll
lugging
a
physical
wallet
 around
with
you.
 –  The
mobile
wallet
is
just
an
extension
of
an
exisMng
credit
card.
It s
not
 a
new
way
to
pay,
unlike
the
shi_
from
checks
to
credit
cards.
 –  Using
a
credit
card
is
almost
as
fast
as
using
a
mobile
 tap‐to‐pay 
 wallet.
So
there s
not
a
big
Mme
savings
associated
with
it.


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Sources

25


Sources Used: •  •  •  •  •  •  •  •  •  •  • 

26

Baig,
E.
C.
(2011,
September
22).
Google
Wallet's
tap‐and‐pay
system
is
simple.
Retrieved
from
 hmp://www.usatoday.com/tech/columnist/edwardbaig/story/2011‐09‐21/ed‐baig‐google‐wallet‐review/50500628/1
 Bennem,
B.
(2012,
June
13).
iOS
6
Passbook
vs.
Google
Wallet.
Retrieved
from
 hmp://reviews.cnet.com/8301‐19512_7‐57452694‐233/ios‐6‐passbook‐vs‐google‐wallet/
 eMarketer.
(2011,
February
22).
Mobile
payments
take
hold
around
the
world.
Retrieved
from
 hmp://www.emarketer.com/(S(ymbd3s55k43s1k555nvcjgvf))/ArMcle.aspx?R=1008242
 Jacobsson
Purewal,
S.
(2012,
February
09).
Google
wallet
security
concerns
raised.
Retrieved
from
 hmp://www.pcworld.com/arMcle/249599/update_google_wallet_security_concerns_raised.html
 Miller,
M.
(2012,
June
20).
Windows
Phone
8
wallet
hub
beats
Apple's
iOS
6
Passbook.
Retrieved
from
 hmp://www.zdnet.com/blog/cell‐phones/windows‐phone‐8‐wallet‐hub‐beats‐apples‐ios‐6‐passbook/7851
 Parr,
B.
(2011,
July
08).
The
future
of
mobile
payments.
Retrieved
from
 hmp://mashable.com/2011/07/08/the‐future‐of‐mobile‐payments‐infographic/
 Paul,
I.
(2012,
June
21).
Smartphone
OS
showdown:Apple,
Google,
MicrosoG,
RIM
gear
up
for
baJle.
Retrieved
from
 hmp://www.pcworld.com/arMcle/258095/smartphone_os_showdown_apple_google_microso__rim_gear_up_for_bamle.html
 Perez,
S.
(2012,
June
19).
Square
ventures
beyond
payments
with
debut
of
customer
loyalty
punchcard
program.
Retrieved
from
 hmp://techcrunch.com/2012/06/19/square‐ventures‐beyond‐payments‐with‐debut‐of‐customer‐loyalty‐punchcard‐program/
 Warren,
C.
(2011,
May
26).
Google
reveals
mobile
payment
system:
Google
Wallet.
Retrieved
from
 hmp://mashable.com/2011/05/26/google‐mobile‐payment‐system‐liveblog/
 Wasserman,
T.
(2012,
June
20).
Windows
phone
wallet
feature
to
use
nfc.
Retrieved
from
 hmp://mashable.com/2012/06/20/windows‐phone‐wallet/
 Wasserman,
T.
(2012,
June
14).
Square
hits
2
million
user
mark;processes
$6
billion
in
payments
.
Retrieved
from
 hmp://mashable.com/2012/06/14/square‐hits‐2‐million‐users/


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The Mobile Wallet Landscape  

A brief overview of the current landscape for the mobile wallet concept.

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