News

Study: Mobile wallets: the US landscape

March 28, 2013

Growing consumer use of smartphones is creating a market for mobile wallets capable of serving many of the same purposes physical wallets served for centuries. A new study by Mercator Advisory Group suggests that the physical wallet might someday go the way of the checkbook, used by few and no longer a necessity.

Mercator Advisory Group's new report, "Mobile Wallets: The U.S. Landscape," reviews U.S. mobile payment trends, analyzes wallets by function and sorts them into a taxonomy of major players, their wallets and uses.

For financial institutions, mobile wallets represent an opportunity to add greater utility to mobile banking apps. Bankcard networks are making it easier for banks and credit unions to do so while maintaining brand recognition.

An emerging picture at retail suggests how mobile wallets will take hold, using contactless NFC or a scanned barcode for a purchase at the point of sale. And rather than a receipt with coupons on the back, customers might receive these items right on their smartphones, transmitted by the POS terminal.

"The mobile wallet market is a new frontier, especially in the payments industry, which has seen little change in technology or functionality for decades," said Jeffrey Green, director of Mercator Advisory Group's emerging technologies advisory service and author of the report. "This represents both a threat and an opportunity for players that have been in payments for some time. And knowing who these wallet vendors are and what they're offering is becoming important in determining how to respond to the marketplace changes."

Highlights of the report include:

• analysis of the U.S. mobile wallet market and categorization of products into three basic categories;
• characteristics of common POS technologies, how merchants access wallet credentials and the how transactions are settled;
• examination of wallets using different technologies to support payments at the point of sale, online and for peer-to-peer funds transfers;
• comparison of storage and management wallets, as well as mobile banking and payments platforms;
• discussion of mobile banking platforms and the role they will play in mobile payments.

Read more about trends and statistics.