by David Snow on September 26th, 2011
It can hardly have escaped the notice of anyone who follows the mobile commerce market that Google’s long awaited mobile wallet launch finally happened last week. Now that the phoney war is over the first offensive in the “wallet war” may now have started (see Who are you going to trust to look after your mobile wallet?) – certainly the defensive moves have started.
France Telecom / Orange shot back with the comment that Google’s wallet only worked on Android and promoted its own UK MNO JV with Telefónica O2 and Vodafone, implying its upcoming mobile wallet will be cross-platform. There was another volley attacking the NFC technology used (reported by eWeek) – so that was also a criticism of the “niche” nature of the Google wallet (last week I commented on PayPal’s way around using NFC, see Mobile Payments – A Fistful of Digits?).
But there was another attack that I found very surprising – the comment that really mobile payments are not needed at all because “[consumers] already have credit cards, which are really a type of mobile payment” (reported by American Banker). Well, that is a very fundamental criticism and apparently supported by some credit card company executives. Is it just reactionary or could there be some truth in the comment that “the convenience of traditional credit or debit cards is hard to beat”? I think there is some truth in it, and whether we like it or not the bar is set for mobile payments by the speed and convenience of the credit card. It’s both a challenge and an opportunity and we are only at the early stages of the mobile commerce revolution. In my opinion mobile payments have to offer not only a speed and convenience advantage but to win the user they must offer more at the same time – and that is where value-added features like mobile coupons come in. Everyone likes a bargain, and if you can redeem a coupon stored in your mobile wallet at the same time as you pay for your purchase, then mobile wallets are set to become a serious rival to the credit card. Look out for our upcoming report on the Mobile Coupons market.