Battle of the Mobile Wallets – Who will Win?

A few days ago, Isis announced they inked deals with Visa, MC, and Amex in addition to their previous deal with Discover. This announcement could finally break the impasse in the U.S. market.

So, now we have essentially 4 major plays at stake here…

1. Mobile wallets controlled by the device makers/disrupters: Apple, Google
2. Mobile wallets controlled by the MNOs/ISIS + Sprint
3. Mobile wallets controlled by the retailers / stored value (CorFire + Incomm)
4. Mobile wallets controlled by the banks/networks

I’ll make a few assumptions here… First, I am discounting bar codes as a viable long term alternative to NFC since NFC is a much more secure technology. Second, I don’t believe that micro-SD is a commercially viable alternative for distribution of the Secure Element as the consumer experience doesn’t work. Assuming both of these points, without partnerships with the MNOs or device manufacturers, the banks/networks and the retailers will not be able to control the secure element.

So the next question is: will the device manufacturers or the MNOs be more bank-friendly?

Apple – no one knows much. Whoever is working on the wallet must be locked up in the basement somewhere.
Google – Google has said they don’t care about the transaction revenues anymore (This is not too generous since neither do the payments providers with the Durbin Act.) Everyone knows that the money will be in the ads/offers/promotions, etc. so now the question is… Will Google play ball with the banks in this area? If not, they may be out of luck.
ISIS / Sprint – After much ado and many years of tribulations, the MNOs have finally realized they will not create a new network, but will leverage the existing rails and bank infrastructure. This is a smart move. With the latest announcement regarding Amex, MC, Visa in addition to Discover, their strategy finally sounds like it’s a sound one to pull the right ecosystem together.

So, now the big question now is… who will ultimately control the secure element in the U.S.? …the device manufacturers or the mobile network operators? Given the changing power dynamics in the US market, the answer to this question is not as obvious as it once was.

One thing is for certain, however — without thinking about the perspective of your partner sitting across the table, this ecosystem is not going to come together. Those who learn this quickly, will get the critical mass of players to be successful. Those who take a hard stance in the market will likely be left in the dust.

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2 responses to “Battle of the Mobile Wallets – Who will Win?

  1. Its like you read my mind! You appear to grasp a lot approximately this, like you wrote the e-book in it or something. I believe that you just can do with a few p.c. to drive the message house a little bit, however instead of that, that is magnificent blog. A great read. I’ll definitely be back.

  2. No doubt mobile payments are increasing. I think it will be the banks who create apps that will ultimately control things. This is because if fraud occurs they may be liable for it.

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