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What Is a Mobile Wallet?

Everybody’s talking about mobile wallets, but no one can agree on what one is.

Mobey Forum, an industry organization established by banks in 2000, is dedicated to encouraging the use of the mobile channel in financial services. Sybase 365, now SAP Mobile Services (and my employer), has belonged to the group since 2006. In the Forum’s most recent quarterly meeting, the 60-plus members couldn’t agree on what a mobile wallet was.

What does a wallet have to do? Are there certain criteria for a thing to qualify? The majority felt that it must require the owner to pay for things, others thought it should store everything that a wallet would, including money, loyalty cards, coupons and even your medical records—a digital George Costanza’s wallet. Many thought a mobile wallet must include the financial transactions, or involve NFC, or have a secure element (but whether the SE was on the phone, on the SIM card, or in cloud was also in debate), or all of the above, or various combinations thereof.

Is Apple’s Passbook a wallet? It’s a kind of virtual folder that collects your receipts, loyalty cards, and boarding passes via a number of different retailer and brand apps, including Starbucks, several airlines, Square Wallet, Target, etc. Apple has been very careful to position Passbook as a replacement for cards and paper, but without the security required for a “true” mobile payments. That said, I use Passbook almost everyday to pay for my coffee—so who’s to say it isn’t a wallet?

Maybe the word itself is our stumbling block. Perhaps “wallet” is a backward-looking term, considering that 20 years from now, we might not carry physical wallets at all. Physical wallets may be all but extinct, but will we preserve the name, the same way we still “dial” a phone number and refer to the “trunks” or "boots" of our cars?

It’s interesting that after all these years, we still don’t have a common definition for what a mobile wallet is, or what it should be. Perhaps a change of name might help? Any suggestions?