Mobile wallets Analysis
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Analysis about existing and latest mobile wallets, key players, technology, latest companies, market share
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Mobile wallets Analysis
- 2. What is mobile wallet? A mobile wallet is a virtual form of real world wallet on the mobile phone, which lets the user to make financial transactions to purchase goods and services. Mobile wallet is more than payments What can it hold other than payments? Bank account details Credit cards Gift coupons and reward certificates Loyalty cards Offers
- 3. Mobile wallet market The global mobile wallet market is expected to reach $5 Trillion by 2020, growing at a CAGR of 127.5% from 2013 to 2020. One-Fifth of U.S. Smartphone owners used a mobile wallet in 2013(Around 40 million) and it is forecasted that this number will grow to 113 million by 2017. Two in five Americans will use mobile wallets by 2017. Barcode, BLE, Cloud based, and NFC being mostly used technologies for mobile wallet payments, there is no standard technology adopted yet. Starbucks mobile app (Barcode based) is the most used digital payment app in America with more than 5 million transactions per week. At present, Asia Pacific dominates the global mobile wallet market, followed by EMEA and North America.
- 4. Who are the players? Mobile platform providers: Google, Apple Retailers / Merchants: Wal-Mart, Target, Starbucks Payment Providers: Visa, Master Card, Discover Mobile Network Operators : Sprint, Verizon, T-Mobile Banks: U.S. Bank, Chase, Bank of America Software startups: Square, Isis The global mobile wallet applications market includes mobile commerce, mobile ticketing, mobile coupons, mobile transfer, and micropayments. What is in there for banks? Banks want to ensure that they scale through these low cost access channels to serve the under and un-banked customers with higher profitability.
- 5. Players in mobile wallet race
- 6. Major players in mobile wallet race Apple’s Passbook (QR code based) Google Wallet PayPal ISIS (Partnership between Verizon Wireless, AT&T, and T-Mobile) Paydiant ‘s Wallet Square wallet Visa’s V.Me MasterCard’s PayPass American Express Serve Starbucks mobile payment app
- 7. Starbucks mobile App User must reload the amount to exclusive Starbucks card to purchase coffee User can use PayPal account to reload the Starbucks card User can attach a credit card to the account to reload the Starbucks card User can tip the barista through the app digitally It is primarily a loyalty app that supports payment Over 1 million downloads
- 8. U.S. Bank Mobile wallet U.S. bank mobile wallet allows the user to •Check an account balance •Deposit checks •View account transaction history •View rewards information •Transfer/Receive funds and pay bills •Access current US Bank offers •Locate nearest branch or ATM The Bank has teamed up with a Qualcomm company called Firethorn Holdings, which provides the technology for the application. This application supports iPad, iPhone(iOS 4.3 or later), Android(V1.6 or later), and BlackBerry devices. Over 1 million downloads from the App store.
- 9. U.S. Bank Mobile Wallet
- 10. U.S. Bank Go mobile U.S. Bank Go Mobile Payment Service allows you to make purchases at your favorite stores, restaurants or other businesses by just placing your iPhone over a secure payment terminal. It comes with a customized iPhone case which has NFC payment chip embedded in it. The user has to apply for U.S. Bank Flexperks Visa card, get it approved, and link this card to NFC chip via a mobile app. https://www.youtube.com/watch?v=OKsZUE0IccI https://www.youtube.com/watch?v=Lp7C18UGZhY After linking the Flexperks Visa card, user can use it at registered merchant outlets. This project is currently in beta stage and supports only iPhone 4.
- 11. U.S. Bank Go mobile Strengths: Can be extended to all the merchants in the U.S. where Visa PayWave card readers are there; The project is already in beta stage; Low cost collection of POS data; Seamless Visa card registration process; It comes with multiple layers of security with highly encrypted algorithms from U.S. Bank. Weaknesses: There is no technology standardization, what if the customers adapt technology other than NFC; NFC enabled mobile phones will have less battery life; User has to buy the mobile phone case; Supports only iPhone; Extra investment for deploying the NFC card readers at the merchant outlets. Opportunities: NFC based technology(Tags, Micro SD, chips, SIM) with LBS can be used for location based marketing ; All the existing customers can turn into potential Flexperks card holders; Could get the unbanked customers from partnering with credit card companies; Giving the mobile wallet feature to the users will add extra reputation . Threats: Security : Consumers worry about personal data being hacked or stolen through digital wallets; Physical wallets: The public is comfortable with physical credit cards and are they ready to change the existing buying patterns?; What if the mobile phone is stolen or lost, the user cannot purchase in case of emergencies; What if the battery is not there, the user cannot make any transactions. SWOT Analysis
- 12. Bank of America Mobile banking App
- 13. Bank of America Bank of America ran a trial with mobile payment startup Paydiant to develop the Mobile wallet for the bank Paydiant has also association with Barclays PLC, and Capital One In the trial test, the customer scans a QR code at the point of sale to pay the bill The existing mobile banking app has the basic features like Bill pay, Fund transfers, and Check deposits online Existing mobile app is available on iOS, Android, BlackBerry, Amazon- kindle fire, and Windows mobile Over 10 million downloads on Android OS alone for existing mobile app Simple and seamless user interface
- 14. Chase bank Mobile banking App
- 15. Chase bank Chase has partnered with Isis to develop the Mobile wallet for the bank The existing mobile banking app has the basic features like Pay bills, Fund transfers, Pay credit card bills, Wire transfers, and Check deposits online Existing mobile app is available on iOS, Android, and Windows mobile Over 10 million downloads on Android OS alone for existing mobile app Simple and seamless user interface Every bank is trying to have a mobile wallet either by developing the application in house or by partnering with third party to develop it.
- 16. Google mobile wallet Tap to add card Add a program
- 17. Google mobile wallet Get offers Send money
- 18. Google mobile wallet Strengths: Core technology backed up by Google; Integrated with Gmail to transfer funds on the web, it might integrate Chrome in future ; Google Wallet users receive 24/7 fraud monitoring, as well as purchase protection that covers 100 percent of all eligible unauthorized transactions; Uses NFC chip , with a PayPass reader and a four digit pin security code; Weaknesses: Need a Gmail account for money transfer; No support for tap and pay services for devices which are not higher than Kitkat based(V 4.4) from April 2014; So many bad reviews about Google wallet usage; Some concerns are raised from Mobile network operators and analysts about security. Opportunities: The business model is based on Ads as revenue streams; Google changed its model from pay per click to pay per wave in case of wallet; Merchants ranging from small to big are Google’s existing customers ; Over 10 million downloads form the market which are potential leads. Threats: PayPal filed a case against Google for security breach; NFC is not yet a standard and secure technology for mobile payments; Transferring the funds through Gmail could be risky; What if the mobile phone is stolen or lost, the user cannot purchase in case of emergencies. SWOT Analysis
- 19. PayPal mobile products Mobile app
- 20. PayPal mobile wallet Strengths: Core technology backed up by eBay; All the user has to do link bank account, debit or credit card with PayPal account and shop from there with a single tap; Support from almost all credit/debit card companies (Visa, etc.) and Cloud based; International transactions with higher limit; PayPal has been around for a long time and has much bigger user base. Weaknesses: Debit and credit card transfers are not free; Transfers are deposited in the recipient’s PayPal account, which have to then be withdrawn; Charges more for the merchants per transaction when compared to competitors. Opportunities: PayPal is already the leader in the industry and it is well known for international transactions, it can extend its market with that image; Over 10 million downloads form the market which are potential leads; 143 million active buyers looked for PayPal when shopping online. Threats: So many competitors are entering into the market, once upon a time PayPal is the well known commerce site; PayPal is losing the market share to Square; SWOT Analysis
- 21. Square mobile products Mobile app/Square wallet
- 22. Square mobile wallet Strengths: Innovators of square credit card reader; Flat 2.75% per swipe which is less than PayPal; Cheap POS station for the merchants; Deposits money within 1-2 business days; There is an option to add a tip to the cashier; Free mobile card reader to the registered user and immediate digital receipt of the payment. Weaknesses: Need to carry extra device in pocket in case of credit card reader; Difficult to explore businesses on the App and there is no classification of the business type; Minimal security and no pin protection; Needed physical presence of the user, and his username at the payment system. Opportunities: It processed $15 billion in 2013 and expected to increase from this mark; This app is being used at 7000 Starbucks stores to pay the bill; Can extend it to independent business owners like taxi drivers. Threats: PayPal came with a new card reader which is a threat; There are other competitors like Isis, and lemon wallet etc. SWOT Analysis
- 23. Technology Strengths Weaknesses Notable deployments QR code • Works on almost and OS and device • Low upfront costs • Leverage existing imaging solutions at POS • Generally weaker security • Lack of standards • Not recognized form of payment • Easily erasable, and damageable •Starbucks •LevelUp •Dunkin Donuts •Apple Passbook Cloud • Leverage existing payment terminals • No consumer device required • Low upfront costs •Limited provider choices •Trust issues could inhibit adoptions •Strong association with online channels •Home Depot (PayPal) •Hollister (PayPal) •Jos. A Bank (PayPal) •Lemon wallet NFC • By 2015, more than 25% of the phones are NFC enabled • Easy product integration •New technology • Users have not yet accepted as a standard payment method • Not available on all phones • ISIS mobile wallet • Google wallet • Orange Money • Boku mobile wallet NFC vs. Cloud vs. QR Code
- 24. Mobile wallets by type Wallet Name NFC QR Code Other Allied wallet PayPal Bank of America mobile wallet Paydiant mobile wallet Boku Mobile Wallet Ericsson Wallet Platform Firethorn Pay FIS Mobile wallet Google Wallet Isis Mobile Wallet Lemon Wallet Level UP Apple’s Passbook Square
- 25. Mobile devices that support mobile wallets Device Name On-device SE (NFC chip) Cloud Other Apple’s iPhone Apple’s iPad Google Nexus 5 (NFC-HCE) Samsung Galaxy S3 Motorola Moto G BlackBerry Z30 Nokia Lumia 930 Sony Xperia Z2 tablet Sprint Galaxy S4 (NFC-HCE)
- 26. What does mobile wallet has today? NFC, NFC-HCE(Host card emulation), Cloud, QR code, SMS, or BLE (Bluetooth low-energy) enabled. Big data, analytics included. Biometrics included. User can manage and operate credit, debit, transport, loyalty and gift cards. Bluetooth low-energy beacons integrated with geo-fencing. Recommendation engine that tailors according to the user’s purchase history. Integrated Customer insight manager. Integrated Trusted service manager.
- 27. What is HCE? Host Card Emulation (HCE) is the presentation of a virtual and exact representation of a smart card using only software. With HCE, any application on an Android 4.4 device can emulate an NFC smart card, letting users tap to initiate transactions with an application of their choice. Applications can also use a new Reader Mode, which allows them to act as readers for HCE cards and other NFC-based transactions. With Host card Without Host card
- 28. Challenges of mobile wallet Low adoption of the technology among consumers and less availability of the infrastructure at merchants is creating a hurdle for mobile wallets to explode Perceived security threat and lack of privacy over mobile payments is considered to be a major factor inhibiting the mobile wallet adoption. Lack of rules governing mobile payments transaction makes consumer more cautious making such payments. Additional cost for NFC POS is major hindrance for merchant adoption.
- 29. User reviews and some use cases http://www.mobilepaymentstoday.com/blog/8881/10-things-you-and- maybe-Google-didn-t-know-Google-Wallet-can-do “Google Wallet can buy you tickets from a movie poster, and Fandango doesn’t even realize they can do it, today.” “Google Wallet can let you shop in the aisles of Wal-Mart or Target, and have it shipped instantly to your home, today.” “Google Wallet can let you pay at the table in a Restaurant, today.” “Two taps of your phone and you’re done.” Mobile wallet can be used at drive-thru, gas pump station, vending machine, event ticketing, and for deliveries such as courier, pizza. Mobile wallet can be used for Person-to-Person payments.
- 30. One in five to use mobile wallet next year n = 1,948
- 31. Recommendations Mobile wallets will only achieve widespread consumer use when the different players in the mobile wallet ecosystem cooperate on some basic standards in order to bring the technology to scale. Marketers and merchants can use mobile wallets for accurate location based marketing, which is not possible with existing plastic credit cards. There won’t be a single winner until all the players set some standards on NFC, Cloud, or QR based mobile wallets. There should be a single framework available for the users that supports all the features such as NFC, Cloud, SMS, BLE, QR based, big data, analytics, and bio metrics. Mobile wallet should be ubiquitous i.e. user should be able to use it at any merchant location to purchase goods (Currently limited merchants support NFC POS infrastructure).
- 32. Recommendations Security should be the basic value proposition to the user in mobile wallet usage . Users won’t use the mobile wallets until the companies show them added value. For ex: Free online wired transactions through mobile wallet. Users are mentally connected to their banks and they prefer their bank’s wallet to other wallets. Accenture’s mobile wallet is the latest product which has support for NFC, QR Codes, recommendation engine, and customer insights. http://newsroom.accenture.com/news/accenture-launches-mobile- wallet-platform-with-integrated-advanced-analytics-for-insight-driven- customer-offers.htm