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Mobile Wallets
What is mobile wallet?
A mobile wallet is a virtual form of real world wallet on
the mobile phone, which lets the user to make financial
transactions to purchase goods and services.

Mobile wallet is more than payments

What can it hold other than payments?

Bank account details
Credit cards
Gift coupons and reward certificates
Loyalty cards
Offers
Mobile wallet market
The global mobile wallet market is expected to reach $5 Trillion by 2020,
growing at a CAGR of 127.5% from 2013 to 2020.

One-Fifth of U.S. Smartphone owners used a mobile wallet in

2013(Around 40 million) and it is forecasted that this number will grow to
113 million by 2017.

Two in five Americans will use mobile wallets by 2017.

Barcode, BLE, Cloud based, and NFC being mostly used technologies for
mobile wallet payments, there is no standard technology adopted yet.

Starbucks mobile app (Barcode based) is the most used digital payment
app in America with more than 5 million transactions per week.

At present, Asia Pacific dominates the global mobile wallet market,

followed by EMEA and North America.
Who are the players?

Mobile platform providers: Google, Apple

Retailers / Merchants: Wal-Mart, Target, Starbucks
Payment Providers: Visa, Master Card, Discover
Mobile Network Operators : Sprint, Verizon, T-Mobile
Banks: U.S. Bank, Chase, Bank of America
Software startups: Square, Isis

The global mobile wallet applications market includes mobile commerce,

mobile ticketing, mobile coupons, mobile transfer, and micropayments.

What is in there for banks?

Banks want to ensure that they scale through these low cost access
channels to serve the under and un-banked customers with higher
profitability.
Players in mobile wallet race
Major players in mobile wallet race
Apple’s Passbook (QR code based)

Google Wallet

PayPal

ISIS (Partnership between Verizon Wireless, AT&T, and T-Mobile)

Paydiant ‘s Wallet

Square wallet

Visa’s V.Me

MasterCard’s PayPass

American Express Serve

Starbucks mobile payment app

Starbucks mobile App

User must reload the amount to

exclusive Starbucks card to purchase
coffee

User can use PayPal account to reload

the Starbucks card

User can attach a credit card to the

account to reload the Starbucks card

User can tip the barista through the

app digitally

It is primarily a loyalty app that

supports payment

Over 1 million downloads

U.S. Bank Mobile wallet

U.S. bank mobile wallet allows the user to

•Check an account balance
•Deposit checks
•View account transaction history
•View rewards information
•Transfer/Receive funds and pay bills
•Access current US Bank offers
•Locate nearest branch or ATM

The Bank has teamed up with a Qualcomm company called Firethorn

Holdings, which provides the technology for the application.

This application supports iPad, iPhone(iOS 4.3 or later), Android(V1.6 or

later), and BlackBerry devices.

Over 1 million downloads from the App store.

U.S. Bank Mobile Wallet
U.S. Bank Go mobile

U.S. Bank Go Mobile Payment Service allows you to make purchases at

your favorite stores, restaurants or other businesses by just placing your
iPhone over a secure payment terminal.

It comes with a customized iPhone case which has NFC payment chip
embedded in it.

The user has to apply for U.S. Bank Flexperks Visa card, get it approved,
and link this card to NFC chip via a mobile app.
https://www.youtube.com/watch?v=OKsZUE0IccI
https://www.youtube.com/watch?v=Lp7C18UGZhY

After linking the Flexperks Visa card, user can use it at registered merchant
outlets.

This project is currently in beta stage and supports only iPhone 4.

U.S. Bank Go mobile
Strengths: Weaknesses:
Can be extended to all the merchants in the U.S. There is no technology standardization, what if
where Visa PayWave card readers are there; the customers adapt technology other than NFC;
The project is already in beta stage; NFC enabled mobile phones will have less battery
Low cost collection of POS data; life;
Seamless Visa card registration process; User has to buy the mobile phone case;
It comes with multiple layers of security with Supports only iPhone;
highly encrypted algorithms from U.S. Bank. Extra investment for deploying the NFC card
readers at the merchant outlets.

SWOT Analysis

Opportunities: Threats:
NFC based technology(Tags, Micro SD, chips, SIM) Security : Consumers worry about personal data
with LBS can be used for location based being hacked or stolen through digital wallets;
marketing ; Physical wallets: The public is comfortable with
All the existing customers can turn into potential physical credit cards and are they ready to change
Flexperks card holders; the existing buying patterns?;
Could get the unbanked customers from What if the mobile phone is stolen or lost, the
partnering with credit card companies; user cannot purchase in case of emergencies;
Giving the mobile wallet feature to the users will What if the battery is not there, the user cannot
add extra reputation . make any transactions.
Bank of America
Mobile banking App
Bank of America

Bank of America ran a trial with mobile payment startup Paydiant to

develop the Mobile wallet for the bank

Paydiant has also association with Barclays PLC, and Capital One

In the trial test, the customer scans a QR code at the point of sale to pay
the bill

The existing mobile banking app has the basic features like Bill pay, Fund
transfers, and Check deposits online

Existing mobile app is available on iOS, Android, BlackBerry, Amazon-

kindle fire, and Windows mobile

Over 10 million downloads on Android OS alone for existing mobile app

Simple and seamless user interface

Chase bank

Mobile banking App

 Chase bank

Chase has partnered with Isis to develop the Mobile wallet for the bank

The existing mobile banking app has the basic features like Pay bills, Fund
transfers, Pay credit card bills, Wire transfers, and Check deposits online

Existing mobile app is available on iOS, Android, and Windows mobile

Over 10 million downloads on Android OS alone for existing mobile app

Simple and seamless user interface

Every bank is trying to have a mobile wallet either by developing the

application in house or by partnering with third party to develop it.
Google mobile wallet

Tap to add card Add a program

Google mobile wallet
Get offers Send money
Google mobile wallet
Strengths:
Core technology backed up by Google;
Weaknesses:
Integrated with Gmail to transfer funds on the Need a Gmail account for money transfer;
web, it might integrate Chrome in future ; No support for tap and pay services for devices
Google Wallet users receive 24/7 fraud which are not higher than Kitkat based(V 4.4)
monitoring, as well as purchase protection that from April 2014;
covers 100 percent of all eligible unauthorized So many bad reviews about Google wallet usage;
transactions; Some concerns are raised from Mobile network
Uses NFC chip , with a PayPass reader and a four operators and analysts about security.
digit pin security code;

SWOT Analysis

Opportunities: Threats:
The business model is based on Ads as revenue PayPal filed a case against Google for security
streams; breach;
Google changed its model from pay per click to NFC is not yet a standard and secure technology
pay per wave in case of wallet; for mobile payments;
Merchants ranging from small to big are Google’s Transferring the funds through Gmail could be
existing customers ; risky;
Over 10 million downloads form the market which What if the mobile phone is stolen or lost, the
are potential leads. user cannot purchase in case of emergencies.
PayPal mobile products

Mobile app
PayPal mobile wallet
Strengths:
Core technology backed up by eBay;
All the user has to do link bank account, debit or
Weaknesses:
credit card with PayPal account and shop from Debit and credit card transfers are not free;
there with a single tap; Transfers are deposited in the recipient’s PayPal
Support from almost all credit/debit card account, which have to then be withdrawn;
companies (Visa, etc.) and Cloud based; Charges more for the merchants per transaction
International transactions with higher limit; when compared to competitors.
PayPal has been around for a long time and has
much bigger user base.

SWOT Analysis

Opportunities:
PayPal is already the leader in the industry and it Threats:
is well known for international transactions, it can
extend its market with that image; So many competitors are entering into the
market, once upon a time PayPal is the well
Over 10 million downloads form the market which known commerce site;
are potential leads;
PayPal is losing the market share to Square;
143 million active buyers looked for PayPal when
shopping online.
Square mobile products

Mobile app/Square wallet

Square mobile wallet
Strengths: Weaknesses:
Innovators of square credit card reader; Need to carry extra device in pocket in case of
credit card reader;
Flat 2.75% per swipe which is less than PayPal;
Difficult to explore businesses on the App and
Cheap POS station for the merchants; there is no classification of the business type;
Deposits money within 1-2 business days; Minimal security and no pin protection;
There is an option to add a tip to the cashier; Needed physical presence of the user, and his
Free mobile card reader to the registered user and username at the payment system.
immediate digital receipt of the payment.

SWOT Analysis

Opportunities:
It processed $15 billion in 2013 and expected to
Threats:
increase from this mark; PayPal came with a new card reader which is a
This app is being used at 7000 Starbucks stores to threat;
pay the bill; There are other competitors like Isis, and lemon
Can extend it to independent business owners wallet etc.
like taxi drivers.
 NFC vs. Cloud vs. QR Code
Technology Strengths Weaknesses Notable
deployments
QR code • Works on almost and • Generally weaker •Starbucks
OS and device security •LevelUp
• Low upfront costs • Lack of standards •Dunkin Donuts
• Leverage existing • Not recognized form •Apple Passbook
imaging solutions at of payment
POS • Easily erasable, and
damageable

Cloud • Leverage existing •Limited provider •Home Depot (PayPal)

payment terminals choices •Hollister (PayPal)
• No consumer device •Trust issues could •Jos. A Bank (PayPal)
required inhibit adoptions •Lemon wallet
• Low upfront costs •Strong association
with online channels

NFC • By 2015, more than • Users have not yet • ISIS mobile wallet
25% of the phones are accepted as a • Google wallet
NFC enabled standard payment • Orange Money
• Easy product method • Boku mobile wallet
integration • Not available on all
•New technology phones
Mobile wallets by type
Wallet Name NFC QR Code Other
Allied wallet 
PayPal 
Bank of America mobile 
wallet
Paydiant mobile wallet 
Boku Mobile Wallet 
Ericsson Wallet Platform 
Firethorn Pay 
FIS Mobile wallet 
Google Wallet  
Isis Mobile Wallet 
Lemon Wallet 
Level UP 
Apple’s Passbook  
Square  
Mobile devices that support mobile
wallets

Device Name On-device SE (NFC Cloud Other

chip)
Apple’s iPhone  
Apple’s iPad  
Google Nexus 5 (NFC-HCE)  
Samsung Galaxy S3   
Motorola Moto G  
BlackBerry Z30   
Nokia Lumia 930  
Sony Xperia Z2 tablet   
Sprint Galaxy S4 (NFC-HCE)  
What does mobile wallet has today?
NFC, NFC-HCE(Host card emulation), Cloud, QR code, SMS, or
BLE (Bluetooth low-energy) enabled.

Big data, analytics included.

Biometrics included.

User can manage and operate credit, debit, transport, loyalty and
gift cards.

Bluetooth low-energy beacons integrated with geo-fencing.

Recommendation engine that tailors according to the user’s

purchase history.

Integrated Customer insight manager.

Integrated Trusted service manager.

 Without Host card
What is HCE?
Host Card Emulation (HCE) is the
presentation of a virtual and exact
representation of a smart card
using only software.

With HCE, any application on an

Android 4.4 device can emulate an
NFC smart card, letting users tap With Host card
to initiate transactions with an
application of their choice.

Applications can also use a new

Reader Mode, which allows them
to act as readers for HCE cards and
other NFC-based transactions.
Challenges of mobile wallet
Low adoption of the technology among consumers and less
availability of the infrastructure at merchants is creating a hurdle for
mobile wallets to explode

Perceived security threat and lack of privacy over mobile payments is

considered to be a major factor inhibiting the mobile wallet
adoption.

Lack of rules governing mobile payments transaction makes

consumer more cautious making such payments.

Additional cost for NFC POS is major hindrance for merchant

adoption.
User reviews and some use cases
http://www.mobilepaymentstoday.com/blog/8881/10-things-you-and-
maybe-Google-didn-t-know-Google-Wallet-can-do

“Google Wallet can buy you tickets from a movie poster, and Fandango
doesn’t even realize they can do it, today.”

“Google Wallet can let you shop in the aisles of Wal-Mart or Target, and
have it shipped instantly to your home, today.”

“Google Wallet can let you pay at the table in a Restaurant, today.”

“Two taps of your phone and you’re done.”

Mobile wallet can be used at drive-thru, gas pump station, vending

machine, event ticketing, and for deliveries such as courier, pizza.

Mobile wallet can be used for Person-to-Person payments.

One in five to use mobile wallet next
year
n = 1,948
Recommendations
Mobile wallets will only achieve widespread consumer use when the
different players in the mobile wallet ecosystem cooperate on some
basic standards in order to bring the technology to scale.

Marketers and merchants can use mobile wallets for accurate location
based marketing, which is not possible with existing plastic credit
cards.

There won’t be a single winner until all the players set some standards
on NFC, Cloud, or QR based mobile wallets.

There should be a single framework available for the users that

supports all the features such as NFC, Cloud, SMS, BLE, QR based, big
data, analytics, and bio metrics.

Mobile wallet should be ubiquitous i.e. user should be able to use it at

any merchant location to purchase goods (Currently limited merchants
support NFC POS infrastructure).
Recommendations
Security should be the basic value proposition to the user in mobile
wallet usage .

Users won’t use the mobile wallets until the companies show them
added value. For ex: Free online wired transactions through mobile
wallet.

Users are mentally connected to their banks and they prefer their
bank’s wallet to other wallets.

Accenture’s mobile wallet is the latest product which has support for
NFC, QR Codes, recommendation engine, and customer insights.

http://newsroom.accenture.com/news/accenture-launches-mobile-
wallet-platform-with-integrated-advanced-analytics-for-insight-driven-
customer-offers.htm
 References

http://www.ericsson.com/m-commerce/blog/the-mobile-wallet-war- slide 2&3

http://www.businessinsider.com/two-in-five-americans-will-use-mobile-wallets-
by-2017-2014-1
http://www.prnewswire.com/news-releases/global-mobile-wallet-market-is-
expected-to-reach-5250-billion-by-2020---allied-market-research-233454021.html
http://www.parksassociates.com/blog/article/pr-jan2014-mobilewallet
http://www.forbes.com/sites/stevenbertoni/2014/02/12/can-paypal-beat-apple-
google-amazon-and-icahn-in-the-wallet-wars/
http://www.hongkiat.com/blog/smartphones-into-creditcard-readers/
http://www.hongkiat.com/blog/mobile-billing-systems/
https://play.google.com/store/apps/details?id=com.paypal.android.p2pmobile
http://www.businessnewsdaily.com/4469-mobile-payment-types-explained.html
http://www.mobilepaymentstoday.com/blog/8881/10-things-you-and-maybe-
Google-didn-t-know-Google-Wallet-can-do
http://www.banktech.com/payments-cards/mobile-wallets-hype-vs-
reality/240159805
References
http://www.mybanktracker.com/news/2009/10/01/us-bank-launches-mobile-
wallet-mobile-banking-application/
http://www.usbankgomobile.com/#
http://www.paymentssource.com/news/us-bank-points-customers-to-squares-
mobile-payment-app-3014800-1.html
http://www.prnewswire.com/news-releases/mobile-wallet-market-applications-
mode-of-payment-stakeholders-and-geography---global-share-size-industry-
analysis-trends-opportunities-growth-and-forecast-2012---2020-236008021.html
http://en.wikipedia.org/wiki/Google_Wallet
http://www.benzinga.com/tech/13/12/4180848/google-wallet-vs-paypal-vs-
square-wallet-vs-loop
http://news.yahoo.com/the-best-way-to-send-money-online--pros-and-cons-of-
the-top-money-transfer-apps-165343809.html
http://www.mobilecommercedaily.com/chase-takes-a-stab-at-mobile-wallets
http://www.pymnts.com/assets/Uploads/Guides/MobileWallet/mobile-wallet-
guide.html
http://www.revivedmedia.net/what-are-mobile-payments-5-main-types-of-
mobile-payments/
References
http://rapidnfc.com/blog/73/nfc_tags_vs_qr_codes_how_to_make_right_choice
http://www.bitrebels.com/technology/qr-codes-vs-nfc-battle-mobile-wallet/
http://www.transactionworld.net/articles/2013/may/global-nfc.html
http://letstalkpayments.com/mobile-wallet-analysis-part-3-list-mobile-wallets-
evaluated/
http://letstalkpayments.com/mobile-wallet-analysis-evolution-challenges-way-
ahead/
http://www.banktech.com/payments-cards/the-mobile-wallets-race-placing-
multiple/240150565
http://www.pcmag.com/article2/0,2817,2408286,00.asp