Will Retail Payments be the Killer App for Mobile Wallets?

Will Retail Payments be the Killer App for Mobile Wallets?

Summary: 53 percent of mobile industry leaders predict that retail payments will be the thing that drives consumers to adopt mobile payments.

TOPICS: ÜberTech

What do you do when thousands of mobile industry leaders from around the world get together in one place? You take their collective pulse with a survey, of course.

This was the third annual Sybase 365/SAP Mobile survey of the operators, fixed telco providers, over-the-top players and other industry execs at the GSMA Mobile World Congress in Barcelona. (Full disclosure: SAP is my employer.)

The results show that the majority of respondents (53 percent) think that the ‘killer apps’ that will drive consumers to start using mobile payments will be retail apps—over money transfer, person-to-person payments and mobile top-up. Further, they say the ‘secret sauce’ for a successful mobile payment scheme includes location-based offers (24 percent) targeted to people near or inside a retail store, better experiences at the point-of-sale such as what NFC might offer (28 percent), and near-universal acceptance like we have today with credit cards (25 percent).

The mobile payments market is definitely maturing. What began as a largely person-to-person payment method must now evolve to tackle the challenges of the retail environment. Mobile wallet apps must improve the payment experience for consumers, compared to previous versions, as well as compared to cash and credit cards. They also must support a multitude of complementary services such as loyalty and couponing. (Maybe the industry will soon be able to agree on what constitutes a mobile wallet?)

Comparing this year’s results to last year’s, the industry appears to have a slightly different opinion about who will be leading the charge on mobile payments. This year, respondents said banks (29 percent), online payment schemes such as PayPal, Apple iTunes and Amazon Payments (28 percent), credit cards (26 percent) and operator consortiums (26 percent) are in the best position. In contrast, last year, the results also had banks (24 percent) and mobile operators (26 percent) in the lead, but placed less stock in credit cards (10 percent) and online payment schemes (19 percent). (This was a ‘tick all that apply’ question—in case you’re doing the math and getting more than 100 percent.)

Regarding the impact of apps like Apple Passbook and Google Now, 34 percent said they would encourage brands to offer wallet services, just 28 percent think they’ll become an alternative to true mobile wallets, and 38 percent believe that consumers’ lack of awareness and/or confusion about all the different offerings are holding mobile wallet services back.

What do you think?

Topic: ÜberTech


Diarmuid Mallon is the Director, Global Marketing Solutions & Programs – Mobile, which includes the SAP Mobile Services division and SAP Mobile solutions. He has worked in the mobile industry since 1996. Follow him here at ÜberTech and @diarmuidmallon.

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  • Who do you trust?

    That is the question that needs to be answered.

    Would I trust my mobile carrier with my money? No. A banking consortium or credit card consortium would have more of a chance.

    The other thing is, it needs to be universal. I'm not going to walk around with half a dozen different e-wallets and have to try and work out which one is going to be accepted at which store. Either it has to work everywhere, or it won't be used at all.

    Saying that, it also means taking your smartphone everywhere with you, something a lot of people don't do - for example, I rarely take mine with me, when I go shopping or go to the cinema etc.
  • Retail, but with value

    Retail apps can definitely drive mobile payments, but there needs to be a vlaue element attached as you said (ie., offers). Simply changing the process wont work as there ubiquity is not there yet and fragmentation with multiple wallets is not ideal as wright_is, rightly pointed out.

    Im not sure about your last comment though wright_is.... much of the research points to smartphones going everywhere with everyone.