Enter the Retailer Mobile Wallet!
Finally, it has happened. The often-forgotten third member of the Mobile Payments ecosystem is now flexing its muscles.
What do I mean by this? Well, it’s the news that Wal-Mart and Target are rumoured to be working, with other retailers, to develop their own mobile payments system (or wallet). For me, this finally, and publicly, highlights the missing piece in the mobile wallet ecosystem. For so long, mobile commerce has been seen as a “two horse race”; one of convergence between the mobile and financial sectors with the needs of the third sector, the retail market, being largely ignored.
One NFC wallet technology provider at Mobile World Congress remarked to me that since NFC handsets and agreements between MNOs and financial institutions are finally beginning to proliferate, suddenly attention has turned this year to the retailers who are being expected to play their part in the market and start accepting mobile NFC payments through their POS terminals. However, the news that large retailers such as Wal-Mart and Target are planning their own wallets shows that retailers are not just going to do what is expected of them as the last sector to be consulted; but that they want to drive the market their own way, not on the dictated terms of the other two players.
What sort of retailer-based wallet are they planning? It will be very interesting to see, but it’s sure to address one of the key issues that every retailer faces; the onerous per transaction costs levied by the payments industry, which are being replicated into the mobile channel in the same way as they have been maintained through the various iterations of card technologies. Will the retailers be more successful in developing a more ubiquitous wallet than the MNOs in concert with the financial institutions have been able to do so far? They certainly have scale, especially if they act together. The forgotten voice is now speaking and the other two sectors have to listen very carefully, for everyone needs each other if dreams are to become reality. Two competing wallet solutions is one too many ...