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Mobile Wallets: Moving Banks beyond Payments

Steven Paese |

With: Jeffrey Gibson

The consensus in the payment industry is that in the next few years payments will shift to a mobile form factor. What the winning form factor and functionality at the point of sale (POS) will be is subject of a pretty widespread debate. For instance, some view QR codes for payments as a temporary “bridge” solution; meanwhile companies like Starbucks and LevelUp have had success to date with that very technology.

MasterCard believes chip/EMV/NFC mobile proximity-driven payments appear to be the clear winning form factor for payments at the point of sale (POS) given their global interoperability, enhanced security, standardization and growing momentum.

But even chip presents different alternatives: is the chip embedded in the mobile device, or is it a SIM card? Whatever flavor chip takes, its processing power permits many value-added services that can be integrated into a holistic payment experience.

Regardless of infrastructure timing, banks should consider mobile offerings that can immediately impact business while laying the foundation for future mobile offerings. Strategy and phase-one implementations could begin today with features and functionality for later, richer offerings.

For example, mobile applications like CardStar have had success in offering a mobile application storing loyalty cards and displaying a two-dimensional barcode for scanning. As the application has evolved, inclusion of coupon discounts and offers has become part of its core value proposition.

Banks can easily offer stored loyalty cards in existing mobile banking applications; these “cards” can later be integrated and automated into a fuller mobile payment experience. Considering that the average household has an average of 12 loyalty cards, the sooner this is offered, the sooner a mobile wallet relationship can be formed. Loyalty programs can offer an added inducement to open a digital wallet.

Topics: Payments Strategy

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