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A new guide from the U.S. Payments Forum outlines the considerations for selecting a mobile-wallet program and draws upon lessons from past successful and unsuccessful mobile wallets launches.
In its white paper, “Mobile and Digital Wallets: U.S. Landscape and Strategic Considerations for Merchants and Financial Institutions,” the Princeton Junction, N.J.-based forum discusses the attributes of five mobile-wallet models and provides lists of strategic considerations for merchants and financial institutions.
The timing of the report is relevant because many merchants and financial institutions may be ready for the next wave of mobile wallets now that the U.S. payments-industry migration to the EMV standard for credit and debit cards is mature, Randy Vanderhoof, U.S. Payments Forum director, tells Digital Transactions News.
“We felt there was so much of a technology shift in the marketplace with mobile wallets and choice that there was not a place where one could go and get a clear view of the landscape,” Vanderhoof says. And merchants, being wary of disrupting the steady stream of transactions, might feel able to look at adding a mobile-wallet service now that the EMV migration is nearly complete.
The report acknowledges prior mobile-wallet attempts and discusses the attributes of successful as well as unsuccessful ones. Among the qualities of prior successful wallets are: a positive consumer experience and ease of use; an ability to make payments recede into the background; confidence in strong security; and an avoidance of point-of-sale changes and additional fees.
The unsuccessful wallet entries required merchants, particularly larger ones, to change their point-of-sale hardware or software; failed to collaborate with other payments-industry entities; and designed their service by committee or consortium.
One element that has changed since the first generation of mobile wallets, exemplified by Apple Inc.’s Apple Pay launch more than three years ago, is that, because of the EMV migration, many merchant POS terminals already are able to accept mobile-wallet payments via near-field communication. NFC is one of the technologies available for mobile wallets to make contactless payments. In many cases, merchants have not yet activated these contactless capabilities.
“Now we’re moving into that phase where the merchant has upgraded their terminals,” Vanderhoof says. They have mobile-wallet-enabled hardware but have not yet turned on NFC because they wanted to focus on EMV while avoiding confusion for customers, he adds.
