The Future of Mobile Wallets: The Sky's the Limit18-Jul-2017
No ownership of the space, they all rush together to stake their claim. Looking toward the future, they hope to become victorious.
It may surprise you to learn that, no, I’m not referring to some historical land grab event — I’m talking about the battle among mobile wallets. With dozens of options available and no clear leader, the real question in the future of mobile payments is: Who will emerge as the winner of the mobile wallet wars? More broadly, what will it take for mobile wallets to become the go-to payment source for consumers and reach higher consumer adoption in general? According to the latest survey by 451 Research, 29% of smartphone owners say they’re likely to use mobile payment apps. More widespread adoption will depend on a number of factors, including, unsurprisingly, millennial and Gen Z preferences.
A Brief History
First, let’s correct a misconception. Even if you don’t scan your smartphone at Dunkin Donuts for your daily cup of joe, you probably have used a mobile wallet. “Mobile wallet” simply means that you are carrying some form of payment information digitally, rather than physically. From using Venmo to pay the friend who puts her card down for brunch to Android Pay for your groceries at Trader Joe’s or clothing at Bloomingdale’s, the types of mobile payment transactions and options available have grown exponentially. This shift shows no signs of slowing down. Recently, some states have even toyed with the idea of digital driver’s licenses!
People have talked at length about how services like Uber, Lyft and Via have disrupted the transportation and ride-sharing sector. However, when it comes down to it, a car that takes you from point A to Point B is just that, whether it be a taxi or someone’s personal vehicle. What these ride-sharing companies actually did was disrupt the space by entering a mobile payment into the equation. Unlike a taxi, riders travel seamlessly without ever taking out a wallet or discussing payment with their driver.
In the mobile wallet and payments space today, there are already major players — companies from Apple to Visa are putting serious investments behind their offerings, touting partnerships and unique feature sets with the goal of emerging ahead of the pack. That said, some have had a head start. For example, the recent Mobile Payments & Fraud Survey, conducted by my firm Kount, Braintree, a PayPal company, and CardNotPresent.com, shows that the majority of merchants (61%) cite Apple as the brand they most identify with the word “safety” in mobile payments. Additionally, of merchants that accept mobile payments, PayPal (48%), Apple Pay (48%) and Android Pay (38%) are the most preferred solutions, respectively.