The Clutch mobile wallet, launched last month, joins several other apps that seem to compete with Apple's Passbook while also integrating with it.

Passbook, Apple's software-based mobile wallet, stores payment cards and tickets from other mobile apps. For example, users of Starbucks' stored-value card app can choose to access their account from Passbook instead of the Starbucks app. Clutch offers a similar function — and even offers to enroll cards in Passbook whenever consumers add a card to their Clutch wallet.

The difference between the two apps is that Passbook "is not a mobile commerce platform," whereas Clutch is, says Andy O'Dell, Clutch's co-founder and chief commercial officer.

Clutch manages gifting obligations and facilitates the delivery of virtual gift cards to other users, plus it allows consumers to browse online merchants and daily deals sites. The app works for both online and physical point of sale transactions.

Clutch was designed to create a one-stop-shop in a "very fragmented market," O'Dell says. Passbook is more a facilitator of the Clutch platform than a competitor, he says.

Consumers typically deal with credit and debit cards, merchant punch cards, rewards cards and both physical and virtual gift cards, which could become a hassle consumers fight with a mobile wallet.

"We're trying to figure out how to unify all these different elements," he adds.

Other companies that seem to offer competing products to Passbook while also integrating with it include Lemon Inc. and Square Inc., both of which integrated with Passbook in December.

When Apple introduced Passbook, it took out many of the steps usually required for consumers to pay with mobile wallets, such as finding the app, opening the app and signing on, making Apple's product more convenient than others in the market, says Bob Egan, founder and managing director at The Sepharim Group.

Apple is notoriously restrictive in determining which apps it allows on its mobile devices. This is likely a reason why Passbook's merchant adoption has been disappointing, Egan says.

Google Wallet, which runs on Android handsets, could also be seen as a Clutch competitor, O'Dell says. Google Wallet could also be a "payment method inside the Clutch system," he says.

Clutch "is a Swiss army knife kind of wallet," Egan says. "They have already moved in making more features available than Apple has with Passbook … But they're playing in a big boy market, so they better have their big boy pants on."

Approximately 12,000 users have signed up for the app since its December launch. The company says it hasn't marketed the product much since it's still refining and fixing bugs.

"Clutch is another application in a sea of aggregation apps out there around loyalty and coupons," Egan says. Which means Clutch is going to have to find a way to differentiate itself from the competition.

While the direct to consumer model seems to be the company's focus currently, Clutch also creates white-label apps for merchants through the back end, which gives retailers access to consumer analytics as well.

Clutch makes money from the sale and distribution of content and its ability to create the white-label apps.  Egan says the white-label business could be the more lucrative of Clutch's two revenue streams.

Throughout 2013, the company plans on launching peer-to-peer services and what O'Dell describes as a "game changer" to address payments at the point of sale.

"The last real hindrance  to mobile commerce today is that merchants' legacy scanners have trouble accurately reading standard 2D barcodes from a smartphone unless those scanners are the more expensive dual-function or optical scanners, like those used by Starbucks today," he says. 

Clutch says its technology will be usable by all merchants, not only ones integrated with the company's software.

"We've spent the past five years developing a vast ecosystem of partnerships that feed into our technology, creating value for partners and consumers," O'Dell says. "The name Clutch is really intended to speak to the power of our proprietary recommendations engine that is launching this year."

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry