We're told that mobile wallets, mobile money and mobile payments is where the future of the payments industry lies – and it certainly looks that way despite research suggesting otherwise. But what exactly is a â€˜mobile wallet' on a conceptual level? Does anybody really know how it should look and operate? Perhaps we're just hanging onto a dated model and thrusting it into the modern age?
At this year's Europe's Customer Festival, in the Total Payments session on Mobile Wallets, Consult Hyperion's Dave Birch sat down with Jon van der Heyden of BNP Paribas Fortis, Jonathan Jensen of UKash, and Alexander Peschkoff of TEDIPAY to try and get to the bottom of exactly what a mobile wallet is.
This wasn't the most straightforward of discussions though, after all everyone had a slightly different opinion on what constituted as a mobile wallet. Some placed far too much importance on the idea of payments, rather than the idea of customer need.
Think of it this way, take your wallet or purse out of your pocket and open it. How many cards in there are actually payment cards? I'm guessing maybe two or three – perhaps more if you've got a larger wallet. I'm no betting man, but I'm betting that there's far more non-payment cards there than payment ones. I for one have a thick wedge of loyalty cards, my driving licence, railcard, Oyster card, mementos and a disorganised bundle of receipts. I rarely carry cash, but there's a little bit there to carry me through to pay day.
So, if this is the makeup of my wallet, holding just two or three payment methods, why would I want my mobile wallet to be so focused around the idea of making a payment? Surely I'd rather just have that aspect of my life reduced to an incredibly minimal focus?
And this is really where the debate begins. How do you ensure that the payments process is handled easily and effectively, and how do you integrate the increasingly disparate mobile payments market into a unified wallet? Especially one that doesn't compromise on what the customer wants, after all, a wallet is something you own, it's not the payments provider's.
BNP Paribas Fortis has a new mobile payments solution that, while not currently integrating into other wallets, allows for users to make payment through their MasterCard and Visa cards. While this may seem like an odd middle-step, by not restricting it to a bank account only, it opens it up to a larger audience.
But the real meat of the issue arose in the nature of how disconnected everything is. You have telcos and banks creating payment systems and not working together in doing so, you have thousands of loyalty apps just sat on your phone too. Everything is already becoming bloated behind multiple screens, locks and taps, all just so you can get to use them how you like.
A mobile wallet needs to integrate these and provide a seamless payments service. This is one aspect where BNP Paribas Fortis' payment solution works better; as it's an API service to retailers. Payment is handled locally and therefore it's incredibly secure and all you need to do is enter your card's PIN.
This is the foundation of what a mobile wallet needs to be. It has to be secure, easy to use, and really put the payments part of equation out of the users mind. It's also got to bring everything together in one location. This means allowing you to use your loyalty cards or preferred payments methods without the need to switch between apps. You should be able to pay in Tesco and have your Clubcard automatically know you're there and let you gain points on your purchase. The same should happen with your Nectar card, My Waitrose card and really any loyalty card you own.
And here in lies the trouble, a point touched upon multiple times during the discussion: mobile wallets just aren't intuitive or ingenious enough.
If anything the wallet we talk about when we think of creating a mobile wallet is the leather thing in our pockets or bags. It's a bloated, ill-organised object that we're trying to sandwich into a high-tech piece of equipment.
We should be thinking outside the box, creating unique uses for it, creating an interface that's sleek and doesn't rely upon the comforting warmth of seeing physical cards and money as virtual representations. However, at this early stage it's probably the best route to encourage people to make the jump across to the world of mobile wallets and payments.
But until something really – and pardon my use of the word – revolutionary comes along, mobile wallets won't be the future of payments for a long time to come.
[Image: Steve Kovach/Business Insider]