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Mobile Wallets or Fully Digital Wallets?

Managing money is about more than on-the-go

Mobile may represent the emerging commerce battleground, but that doesn’t mean consumers will abandon their PCs anytime soon. In a multichannel environment that’s expected to persist for the foreseeable future, is a purely mobile wallet the right move? Or is the right solution one that matches consumers’ existing behavior rather than tries to anticipate and mold their future behavior?

Many of the mobile payment schemes currently under development or being adopted are mobile pure plays, but not all. Google Wallet, for example, began life as a mobile-only solution, but has since evolved into a full digital wallet usable online as well as on smartphones. Google’s Robin Dua, head of product management for Google Wallet, explained that the company got feedback from users that “they wanted one wallet that worked the same way both online as well as in the store, through the phone.” When Google Wallet first launched, this was not the case, noted Dua: “Users had to set up a mobile wallet, and so the payment methods that they linked there were separate from the payment methods that they linked to Google Checkout.” Now, however, it is the case. “We’ve rebranded everything as Google Wallet. It’s one wallet that works the same way. So any payment methods that you link in either channel show up in the other channel, and it’s really one wallet that works seamlessly across devices and channels.”

That seamless experience, summed up in one word, “convenience,” was the top reason US consumers told Catapult Marketing in March that they would be interested in using a mobile wallet.

Other players in the space, such as PayPal, American Express’ Serve (effectively a PayPal competitor) and Visa’s V.me, function similarly as fully digital wallets. They are able to access the same payment preferences and profile information on a PC and smartphone. PayPal’s Patrick Gauthier, head of product marketing and business operations, put this in a broader context, saying, “Our vision is not limited to mobile payment. This is not about payment anymore. This is about money and how I manage and use it. This is how we see the wallet.” He added: “Reimagining money and reimagining the wallet means not just being about a card that is either on a chip, on a phone or in the cloud. It’s about being able to connect the various accounts and sources of value and sources of information that the consumer uses.”

It also means reimagining how consumers manage their money, at least to some extent. In a Q4 2011 study by consulting firm AlixPartners, US consumers who expressed interest in using a digital wallet overwhelmingly selected their primary bank as their preferred digital wallet provider, far outpacing PayPal, digital giants such as Google, Facebook and Apple, and other mobile-specific payment providers. These results were consistent across every age group.

For companies that started life offline (such as American Express and Visa) or online (such as Google and PayPal) before moving into the mobile space, a multichannel approach fits with the way they (and their customers) do business today. But their customers might not yet recognize the way in which these businesses are equipped to serve them. For makers of mobile wallets, the next challenge is convincing people that they are offering useful solutions.

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Check out today’s other articles, “Travel Apps Lead Industries in Usage Growth” and “To Expand Online Access, Brazil Goes Mobile.”

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