Most digital wallets are focused on shopping, marketing and recurring payments, though mobile payment company PyxPay and donation payments company Interactive Donor Corp. are applying the concept to charitable giving.
The two companies have built a mobile donation app that also includes a rewards function, the ability for consumers to store and choose causes for donations, as well as payment methods. The companies plan to reach out to younger people, who may not care to attend large social gatherings to donate money.
"The next generation of philanthropists, the millennials, aren't interested in the traditional means of giving," says Ken Brenner, CEO of Interactive Donor (iDonor).
PyxPay provides the digital wallet technology. The app links to programs at iDonor, which receives donations and provides donors with points or reward tokens from its more than 200 retailer partners.
Through the companies' app, the process of making a donation is very much like making any other in-app purchase, Brenner says. "It's the simplest way for a consumer to make a donation."
Mobile phones have been used for several years to collect donations at live events. Square, for example, has been used to collect donations during the 2012 Presidential race and for the Salvation Army. PayPal's mobile app has been used church donations, while Danal and MyGive have partnered to enable mobile donations for mGive Foundation.
PyxPay and Interactive Donor's model somewhat resembles Causeworld, a Citigroup-backed app from late 2009 that allowed consumers to earn "karma points" by visiting retailers and then using those points to fund charitable donations. Causeworld evolved into shopkick, a loyalty provider that rewards consumers for visiting and spending at certain retail stores.
While most digital donation initiatives focus on just the payment, PyxPay and iDonor are attempting to build a full mobile commerce model for giving, Brenner says.
"Mobile giving hasn't really been thought though yet, it's at the very early stage," he says.
A mobile giving app is a good fit because many times people find out about campaigns through their mobile devices, says Maner Puyawan, CEO of PyxPay
"The fundraisers can keep the excitement level up, or if a donor is getting information about a disaster, such as the hurricane in the Philippines, the donor can be made aware of the disaster and how to help," Puyawan says.
The model can provide a boost for donation efforts, says Rick Oglesby, a payments consultant. Unlike retailers, which typically used digital wallets to learn about their customers' preferences and spending patterns, charitable organizations already know their audience.
"Since you don't normally walk into a physical location and swipe a card in order to make a donation, getting money to a charity can involve checks, the mail, websites and hand-entered transactions," he says. "Therefore, a wallet could provide a big lift to a charitable organization by making it far easier for a donor to put a card on file and donate with a click or two. It can also automate a lot of back office and marketing functions for the charitable organization, so there's significant potential value."