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Mobile Wallets: Fix What's Broken - And It Ain't Payments

My leather wallet wore out recently. With so much buzz around mobile wallets, I was wondering if I should even bother with another leather wallet.

Before switching to a mobile wallet, I inventoried the contents of my wallet and arranged them into the following two piles:

LHS: This pile contained payment related items such as cash, two credit cards and one debit card.

RHS: All non payment related items went into this pile. A partial list of contents included many store loyalty cards, two driving licenses, one paper receipt, one health insurance card and one alumnus card.

It was immediately obvious that the pile on the right was much larger than the one on the left. Look like it's no different for most people: According to this PandoDaily article, "Physical wallets, pockets, and purses... carry a wide variety of items, from cash and credit cards to coupons and boarding passes."

Looking at the plastic payment cards on the LHS, I realized - like many others - that nothing is broken with them. It's no big deal carrying two credit cards and one debit card. Even people who use many more cards than me on a regular basis can always choose to leave a few of them behind at home. This is possible because payment cards are interchangeable, which means any (open loop) card will work at any store. For eons, I'm used to handing over my plastic cards at checkout or doing the swipe, dip or tap action myself where the merchant allows it. Therefore, I don't see a compelling reason to change the way I use my payment cards.

On the other hand, plastic loyalty cards on the RHS are a major source of pain. First of all, there are too many of them to fit in my wallet. I can't take an arbitrary decision to leave some cards behind since I'd lose rewards when I shop at those stores. Barring a few coalition cards like PAYBACK and NECTAR,  loyalty cards are not interchangeable across stores. Secondly, I forfeit rewards on shopping done by others in my family at a certain retailer when its loyalty card is in my wallet.

These are pain areas worth resolving. Mobile wallets fit the bill perfectly. All of them obviate the need to carry multiple cards. Some like KeyRing allow users to scan a single loyalty card into multiple smartphones, so they can earn rewards whenever any of their family members go shopping.

While I still need to go out and buy another leather wallet, I can avoid cramming all my store loyalty cards into it by moving them to a mobile wallet. I can already hear people suffixing the last sentence with "provided merchants accept loyalty cards off of smartphones". In the next part of this post, I'll explain why merchants are lot more likely to accept mobile wallets for loyalty - rather than payment - cards. Watch this space.


Comments: (7)

A Finextra member
A Finextra member 09 September, 2013, 08:511 like 1 like Good post! Let me guess: all your RHS cards have either mag stripe or a barcode. Hence, an "uber-card" with... dynamic programmable mag stripe coupled with a phone (or dedicated e-wallet device with screen and biometrics) will solve the problem, except driving licence, perhaps.
A Finextra member
A Finextra member 09 September, 2013, 09:331 like 1 like There are several companies trying to make merchants link loyalty to bank cards. E.g. BirdBack, Cardlytics, etc. The problem they face: both merchant AND consumers have to change their modes operandi. Guess how "easy" that is...
Nick Collin
Nick Collin - Collin Consulting Ltd - London 10 September, 2013, 13:181 like 1 like

Excellent post!  My own wallet's RHS included the following:

- Just 3 true loyalty cards (but I have at least 20 more wrapped up in a rubber band in a drawer in my desk at home - proving your point)

- Freedom Pass and Senior Railcard - vital items!

- RAC breakdown card - ditto

- Driving licence

- Physical ID card to get me into tennis club

- Insurance card and alumnus card

- Business cards - mine and others

- Photos - me and my nearest and dearest

- Many receipts and tickets

- Postage stamps

- Cash! - sterling and euros

You're quite right, all of these items could in theory be put on a mobile phone.  But realistically I think you will still be buying leather wallets for many years to come :-).  Of course, as a long term mobile-sceptic and EMV chip enthusiast, I'd point out that it would probably be much easier to put many of the items on the EMV chip of one or all of my payment cards (two credit and one debit) as value added applications.  That would apply particularly to the many items which are in essence ID or "e-trust" applications and could with a little imagination leverage the highly secure, global, standard chip and PIN authentication infrastructure. 


Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 10 September, 2013, 16:19Be the first to give this comment the thumbs up 0 likes

@AlexanderP: TY for your comment. No, not all cards on the RHS need magstripe or barcode! I plan to cover this in Part 2. Please bear with me until then.

@JohnV: TY for introducing RedZebra. I had a quick look. Looks very similar to Cardlytics. With Cardlytics securing a patent for its platform a couple of weeks ago, I've always been curious about the outlook for other providers of similar platforms. 

@NickC: TY for reminding me about the offline-rubberbanded-cards! I'd forgotten to scan them into my mobile wallet. I'm very sure I'll be buying leather wallets for several years to come. But, by transferring the store loyalty cards to a mobile wallet, I can at least win the "battle of the trouser bulge", to paraphrase from @AlexP's blog post.  

Matt White
Matt White - Finextra - Toronto 11 September, 2013, 16:34Be the first to give this comment the thumbs up 0 likes

I've suspended a couple of comments. Please don't use the community to promote your company/products. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 18 December, 2014, 11:43Be the first to give this comment the thumbs up 0 likes

Interesting to note that even the Starbucks app "didn’t start off as a way to pay" but as a digital store of loyalty points & and gift cards.

Hitesh Thakkar
Hitesh Thakkar - SME - Fintech startups (APAC and Africa) - India 19 November, 2015, 08:22Be the first to give this comment the thumbs up 0 likes

Thanks Ketharaman for directing to very good post of yours.

I agree with you as I carried out similar excercise with my pocket wallet. It has several stuffs on RHS which can move into Mobile wallet !! Interesting.

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