Imagine going shopping with nothing but your smartphone. Grabbing a coffee and paying with your phone. Catching a flight using your phone to scan your boarding pass. Flashing your loyalty card by simply sharing your phone screen. That day is already here.
A mobile wallet refers to the act of making a payment from, or via, a mobile device. Mobile wallets enable consumers to store a broad range of details, from credit and debit cards, to loyalty cards and personal billing information all in one central hub.
Mobile commerce accounts for around 37% of global online spend. This figure inflates to more than 50% for consumers in the UK, Australia, India and China. With seamless payment flows and user friendly interfaces, consumer adoption is on the rise.
The rapidly expanding mobile payment sector now comprises of many leading financial institutions, mobile phone providers and FinTech start-ups, all offering competing technologies. Below presents an overview of three leading providers:
ApplePay, launched in the UK in October 2014, is the leading provider. It is a proprietary iOS-mobile payment system that uses an Apple device to make payment on near-field-communication (NFC) enabled card terminals at points of sale (POS). To make a payment a consumer will need to initially scan their card information using the camera function of an IPhone. This stores the relevant details and allows the user to pay for goods at PoS by scanning their phone.
AndroidPay offers Google’s solution to mobile wallets, enabling consumers to pay using a NFC-system. Launched in the UK May 2016, AndroidPay stores credit, debit, loyalty and giftcard information, allowing a user to make quick payments supported at PoS, via apps and online websites.
SamsungPay,launched May 2017 and unlike its peers works with virtually every POS-system; using NFC and standard magnetic-stripe retail terminals (featuring Magnetic Secure Transmission and Europay MasterCard Visa readers), currently used for traditional chip-and-pin card transactions. Card details are uploaded in a similar fashion to ApplePay using the SamsungPay app.
Whilst Samsung were late starters, their broader technology enables them to reach more of the market leaving Apple and Android, amongst other peers, with significant development to do.
With the revised European Payment Service Directive and General Data Protection Regulation coming into force next year, an interesting assortment of innovative payment developments are expected to come to market in 2018 and beyond.
For providers, the mobile wallet proposition creates a rich opportunity to connect with consumers “on-the-go”; gathering useful insights should enable providers to boost and improve customer experience, ultimately driving customer satisfaction. Companies that can continue to ease security fears and offer adoption incentives should expect to experience continued adoption of their mobile wallet propositions.
The questions remains as technologies advance and payment capacity and efficiency improves; how long will it be until we no longer need cards, cash or devices to pay?