18 August 2017
David  Webber

David Webber

David Webber - Intelligent Environments

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The redundant wallet - what next?

28 July 2015  |  3908 views  |  0

Despite the humble wallet & purse being with us for centuries the writing could be on the wall for their future existence. Mobile wallets have been around for a while, but have never really taken off. However, according to Apple, the UK launch of Apple Pay saw one million activations in the first three days, far beyond any other payment developments in the market. It’s early days, but some have already predicted the beginning of the end for the physical purse or wallet.  

Of course Apple is in the fairly unique position that almost anything it launches is almost guaranteed to have significant initial take up. What is more relevant is what the level of use is likely to be after 6 or 12 months. What the launch has done though is make the capability to use mobile payments available to a large proportion of the population, many of whom may not previously have even thought about using their mobile or wearable device to pay.

Apple’s figures indicate that people are starting to use the capability now they have ready access to it. If adoption figures continue to follow their current trajectory, it will change the way in which we shop forever, moving us away from the more traditional chip and pin technology toward a mobile-first experience.

Part of the reason such a move now seems all but inevitable is that mobile payments technology like Apple Pay make the process of paying for goods much more convenient. All it takes is for a consumer to hold up their phone to a contactless payment point, place their finger over the button when prompted and that’s it, they’ve paid. By combining biometric touch recognition security with a PIN code, it also helps make payments more secure, removing the risk of losing physical bank cards.

Apple Pay isn’t the only new technology putting the future of the wallet in its sights. A new app, Loyalive, threatens to replace the loyalty cards bulking out your wallet, by enabling users to store loyalty cards, collect points and view balances all from their smartphone. This eliminates the need to keep track of multiple loyalty cards, and keeps you up to date with all the offers you’re entitled to without having to cart all the cards around.

Whether either of these technologies will actually kill off the wallet is somewhat immaterial, but what they do signify is a wider consumer move towards mobile commerce. According to research by MasterCard, by the year 2020, mobile commerce will account for more than 75 per cent of the world's online transactions, and more than 50 per cent of the money consumers spend.

It’s also indicative that the younger generation is increasingly digital-first. According to figures from Nielsen, 55 per cent of mobile payments are made by smartphone users in the 18 to 34 age bracket. Young people have grown up with technology, and are more willing to try new services where older users may be a little more cautious.

In spite of the halo effect to be expected from a new Apple release, it’s hard to argue with 1 million activations in the first three days of a new service. Consumer appetite for Apple Pay suggests that the mobile wallet may finally have started to come of age. We’re at an early stage of the adoption cycle with the technology, but as consumers start to recognise the benefits such technology as Apple Pay and Loyalive hold, perhaps we’ll finally get to the stage where we’ll no longer need to carry our wallet with us whenever we leave the house. 

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job title Managing Director
location Kingston
member since 2012
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David joined Intelligent Environments in 2012, bringing over 15 years hands-on experience of the financial services software industry. He is responsible for the day-to-day running of Intelligent Envir...

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