Not too long ago – say about five years – the mobile wallet concept was being presented as telco territory. Telcos, we were told, had the networks, they controlled the ‘handsets’ and above all they had earned ‘consumer trust’. This wasn’t an area like download app stores. People understood that a highly secure network along with staid and steady governance had to stand behind an application like Mobile Wallet (subtext: who would trust a company like Google with their money?).
Well, as it turns out, quite a few. UK-based Juniper Research has just published a white paper (available for download upon registration) that charts the Mobile Wallet take-off that’s actually ocurred over the past couple of years. Guess what? Apple, Samsung and Google are all now poised to figure highly. Telcos, not so much.
Juniper found that global spend using mobile wallets is now galloping on, rising by nearly 32 per cent this year to $1.35 trillion and it’s all being driven from Asia by online players such as Alipay and WeChat, with the likes of Apple and Paypal poised to make major inroads in other developed markets.
So what happened?
According to the report author, Dr Windsor Holden, it’s the old ‘A’ word striking again – Agility. Or rather the lack of it. He says that network operators are sticking to offline payments based on NFC SIM cards using a technique called Host Card Emulation (HCE) which permits a phone to perform card emulation on a Near Field Communication (NFC)-enabled device without relying on access to a secure element across the network.
The agile competitors, on the other hand, have got the jump by deploying integrated HCE wallets that also enable online usage. The ability of players like PayPal and Apple to offer wallets which can be used both instore and online means that wallets are fast becoming the default payment mechanism in other markets. Outside emerging markets, then, the remaining mobile network operator wallet ventures are unlikely to gain traction, claims Windsor.
The original version of this article first appeared in Telecom TV.
Telecom TV delivers daily insight on the converging worlds of telecoms, media and entertainment. Views expressed in this article from Telecom TV do not necessarily reflect those of ITU.