Mobile wallet: lessons from Steve Jobs

We still need greater collaboration between Financial Institutions, Telecommunication Network Providers and Handset Manufacturers - when (rather than if) that is achieved - then we can expect to see mass roll out of Mobile Wallets.  At the moment the only players in the market are niche applications.  There needs to be a wake up call soon - otherwise the only Mobile "Wallet" Issuers will be Merchants - rather than traditional FI's.

That's the whole point, Matt - a single issuer cannot provide an open m-wallet as the latter must be a multi-issuer product. Were Barclays, for example, issue and manage an open m-wallet they would not be thrilled at all if the "top of wallet" card was not one of theirs. Hence, the inherent conflict of interests...

As for the mobile operators, they could have offered value in authentication, but they missed the boat as there are reliable ways to authenticate a mobile user without involving MNOs - Barclays Pingit is a good example of that. Also, if m-wallet is fronted by EMV uber-card, authentication is done via chip&PIN.

My mobile wallet is open, flexible, ubiquitous and simple too. The underlying OS is proven since many centuries, but has meanwhile been enhanced to support not only cash but also payments cards (incl. EMV), ID cards, coupons and whathaveyou. Furthermore it is pretty failsafe, not impacted by an empty battery, loss of signal or some infrastructure failure at a wireless communications carrier.

A caveat - it is only open unless the leather strap is closed.

While one can fully understand the desire to make money by introducing even more fancy new payment schemes revolving around smartphones, reality shows that the desire of the average person to use those new fancy payment schemes isn't too overwhelming. Also, the "show off" effect is now getting weaker as we approach smartphone market saturation. Maybe it is now about time to think about those upcoming smart watches, and how to lure trendsetters into paying via those ?   (;-))

Dear Anon, that was precisely my point: to be successful, mobile wallet needs to replicate most (if not all) functions of that leather "suitcase" of yours. Do we need to even bother? Well, you do have payment cards, even though cash "works just fine"...

Mobile wallet (and smartwatches) is not about payments or making money - the latter is a (positive) side-effect of any product that strikes consumers' hearts. It's all about convenience, flexibility and choice. In other words - "user experience" (sorry if I sound lecturing - I talk to my 3&5 a lot).

As for "showing off", I'd rather my trousers bulged in just one place, not two... :)

Exactly, it is about choice - and it seems that consumers are somewhat less eager to adopt electronic wallets than they were lets say, in adopting social networks like Facebook. The primary wallet function - supporting payments - has now been offered since a few years on smartphones, with a large number of pilot projects but no overwhelming success so far. Including more functionalities (eg. ID cards) is complicated and makes the product more complicated, not sure how this can increase attractiveness.

It might turn out that having cash and prepaid cards for the usual small purchases done from people and vending machines, plus credit and debit cards for somewhat higher amounts to be used in card present / card not present payment situations might be just the right mix for most people. Having to pay is a necessity, but not really entertaining or a source of fun ... so as there are globally established methods working reasonably well, the added value of introducing an electronic wallet into the process isn't obvious to everybody.

Leveraging the customer's mobile phone as a means for two factor authentication is a different story, but this aspect would be driven by the banks/retailers, not by the consumers. In fact, "dumb" mobile phones are better for this than smartphones, as they are much more difficult to hack. And even the NSA would have significant difficulties to spy on a leather wallet via the Internet.

Not going to elaborate further on what bulges my trousers, I can disclose that my smartphone slips into my shirtpocket ...   (;-))

Unless it's Blackberry or you only sit/stand straight, most smartphones would easily slip out of a typical shirtpocket...

On a serious note, wallet is not about payments - you have cards for that. Wallet is an interface and a container. If you lose your leather wallet, it's gone and you are exposed. If you lose a smart wallet, it's a different story. 

2FA, coupons, loyalty etc. - it will take time to bring all the parties onboard, but it's the question of "when", not "if"... Even London cabbies warmed up to Hailo - unthinkable even 5 years ago. The world is changing (fast).

Time will tell whether electronic wallets will become a widespread success. Many years ago when the first chip cards did show up on the market, quite a few people did envision a "all-in-one" smart card for all purposes in life, from payments over passport/legal ID, drivers license, healtcare ID, loyalty schemes and up to membership ID for whatever clubs you might join. As we know, these dreams did not materialize - mainly for organizational, cost and privacy reasons.

To me, designing better shirtpockets that prevent smartphones from slipping out seems somewhat easier than designing that universal electronic wallet. But again, time will tell.