The New Way to Pay: Prepare Your Institution for the Digital Wallet Boom
By Jason O’Brien
Imagine: You’re at a store and ready to pay when you realize that you’ve forgotten your wallet. Embarrassed and frustrated, you tell the cashier to cancel your transaction and that you’ll come back later. At this point, the cashier says, “No problem. If you have a smartphone, we can finish your payment right now.”
How cool would that be?
Recently, retail heavyweights such as Wal-Mart, Target, Best Buy, and CVS/pharmacy have banded together to create the Merchant Customer Exchange (MCX) with the purpose of offering consumers a mobile commerce solution that may soon be the universal way to pay for goods. Additionally, major names such as Google, Apple, AT&T, Sprint, and PayPal have made significant investments in mobile wallet platforms in the past few years. Now that major retail locations have a solution around the corner, we may be nearing a major increase in the adoption of mobile wallets. According to a press release from Gartner Research:
- In 2012, the number of mobile payment users was 212.2 million, an increase from 160.5 million in 2011.
- By 2015, mobile payments will account for $617 billion in gross dollar volume.
- Digital wallets – when they come into full force – have the potential to affect a broad range of stakeholders, including mobile network operators, handset manufacturers, operating system providers, retailers, consumers, and of course financial institutions. That’s why we’re sharing with you the emerging landscape of digital wallets, the opportunities it will present to you, and the threats it may create.