Hey, Visa and PayPal, pay attention here.
The rapid spread of new mobile-wallet payment technology from diverse players around the globe might be getting out of hand. Mobey Forum, a global nonprofit organization, is raising warnings that as multiple players develop their own approaches to mobile wallets, chaos may ensue, ultimately hindering broad consumer adoption.
Already, Visa Inc. is criticizing PayPal Inc.’s mobile wallet, even before Visa has rolled out its own wallet (see story).
To rein things in, Mobey Forum Mobile Wallet Task Force on Feb. 14 released a white paper “Control Points in Mobile Wallets,” its second in a series aimed at providing common ground and a roadmap for emerging mobile digital wallets worldwide (see document).
The 25-page paper contends that there is “much hype” around mobile wallets but little analysis or long-term planning associated with it.
While there is “considerable jockeying for market position among key players striving to win the interest of consumers,” if present trends continue, standardization and interoperability may become difficult to achieve, the paper asserts.
“Many players see the mobile wallet as a new opportunity to interact more strongly with their customers,” which may lead to “many competing solutions and a fragmented market, which will make potential users hesitant about adopting a mobile wallet,” the paper says.
The task force, with operational headquarters in Helsinki, Finland, emphasizes the need for cooperation among industry players to develop common business models and technical standards.
“If this does not happen, the market itself is likely to decide which [product or service] will become the de facto standard, potentially enabling a majority of control points being dominated by single players,” the task force warns.
Mobey Forum believes that “by putting into place business models that cover the whole ecosystem, the industry will be able to address issues like compliance, governance, liability, security, support and more.”
The paper includes emerging mobile wallet definitions including connections to and from mobile wallets, distribution channels, customer acquisition and enrollment, data flow, and data ownership.
An appendix provides a thumbnail description of some mobile wallets, including Google Wallet, which involves Citigroup Inc., Sprint Nextel, Google Inc. and MasterCard Worldwide; the Isis mobile wallet effort involving AT&T, T-Mobile USA and Verizon as well as the leading U.S. payment networks; Kenya’s M-Pesa mobile money service; Nokia Money in India; and several others emerging in Europe.
The task force includes representation from diverse financial services, telecommunication and payment industry players, including Bank of America Corp., Royal Bank of Scotland, Oberthur Technologies, Nokia and the European Payments Council.
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