A new report from Javelin Strategy & Research defines the mobile wallet industry in its initial stages, with many players like Apple iPhone 5 and others entering the field, jostling to grab early market leadership, and technologies to increase use and adoption. Visa and PayPal top the list of consumers’ preferred mobile wallet providers at 15% and 13%, while mobile network operators Verizon and AT&T (with the Isis wallet), and Apple, are close behind.
To become a valued mobile wallet provider, consumers consider three important factors—trust, innovation, and privacy. A balanced approach of the three is more important to consumers, as PayPal and Visa have demonstrated with high scores in all three categories. FIs are well positioned to leverage their customers’ high perceptions of FI privacy protection, trustworthiness, and even innovation to become mobile wallet market leaders.
While mobile payments and mobile POS purchasing experienced little adoption, there is a growing pent up demand from consumers as new mobile devices and technologies enter the market. Over 60% of mobile bankers are likely to adopt a mobile wallet in the next 12 months. The report identifies crucial factors that will foster adoption of mobile wallets and ranks providers according to consumer trust, as well as technologies and strategies that will enable players to stay in the game and – eventually – win.
“Consumers have spoken, and the primary bank relationship and the payment networks, such as Visa and PayPal will be a key part of any widespread mobile wallet,” said Jim Van Dyke, President and Founder of Javelin.
Providers will also have to determine which mobile point-of-sale technology – NFC, cloud, and bar code – to use. In the near-term, bar codes and cloud-based wallets will proliferate, as they do not require mobile phone upgrades or merchant investments in terminals and systems. With Apple’s iPhone 5 coming soon and other new devices following the iPhone, it is expected that NFC chip technology will prevail as it offers the convenience of paying with a simple tap or wave of the phone.
“NFC faces significant barriers to adoption by merchants and consumers, but it is standards-based technology that will eventually prevail as the main mobile point-of-sale technology,” said Mary Monahan, Executive Vice President and Research Director, Mobile at Javelin. “Google was first out the door with NFC and has stumbled. When Apple enters the payment space with NFC, we expect Apple iPhone 5 will lead the way and others will follow Apple’s lead.”
Javelin’s report evaluates the strengths and weaknesses of the three mobile point-of-sale technologies and the providers that use them. The 45-page report is based on four online surveys of mobile phone owners and consumers as well as executive interviews with major competitors in the payments and wallet space. Javelin profiles Isis providers (Verizon, AT&T, and T-Mobile), Microsoft Wallet, Google Wallet, PayPal, Pay With Square, MasterCard PayPass Wallet Services, V.me by Visa, and American Express Serve.
To learn more, click here: Battle for Control of the Mobile Wallet: Sorting out Players, Technologies and Strategies to Win.