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ATM & Mobile Innovation Summit addresses mobile wallet dilemma

With literally hundreds of mobile wallets in the marketplace, how are FIs - not to mention consumers - supposed to settle on just one?

September 15, 2014 by Will Hernandez — Editor, NetWorld Media Group

Consumers face a mobile wallet dilemma.

Depending on which estimates you go by, there are hundreds of mobile wallets on the marketplace. Consumers interested in using a mobile wallet must make a choice about which products work best for them, but the decision-making process itself could hamper widespread adoption in the future.

"We're exposed to making decision to which wallet we want, which cards we want to use in the them and how to prioritize all of it," John MacAllister, principal at consulting firm Dorado Industries, told attendees Thursday during a panel discussion at the ATM & Mobile Innovation Summit in Washington, D.C. "It's a nightmare for the consuming public. If you present them with too many choices, they won't make a decision at all."

Whether Apple can change this problem with its newly announced Apple Pay solution is a matter of debate.

The payments industry has asked again and again whether Apple announced anything truly innovative last week. Regardless of the answer, it will take time to determine how success is defined with Apple Pay as it joins the crowded field of players.

MacAllister believes a market is considered stable when there are three dominant companies in what he described as the inner circle of any given industry. No such companies exist with mobile wallets. This situation is also causing a problem for banks that want to add a payments feature to their existing mobile banking apps.

"If the banks can't make up their minds with mobile [wallets], I don't know how we expect consumers to do the same," MacAllister said.

A lack of interoperability and the demand for exclusivity with mobile wallets are also problems, he said.

The Merchant Customer Exchange consortium requires merchants to be exclusive partners in  mobile payments system called CurrentC, which is slated for introduction next year. Walmart, the largest of some 50 MCX merchants, has said that it will not accept Apple Pay.

"This whole notion of exclusivity comes at a very high price," MacAllister said. "There has to be interoperability in payments. Amazon and Google have to accept the fact that people will want to use Apple Pay."

photo courtesy of Karlis Dambrans. 

About Will Hernandez

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Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.

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