The mobile wallet will fundamentally change commerce… yet it remains unknown who will lead this revolution. One thing is fairly certain; a bank won’t be at the front of the charge.
Banks will take a page from Charles Darwin and follow an evolutionary approach to mobile payment. This means narrower product launches in the mobile payment space (think Barclays PingIt or PayTag). Rather than go the way of Google Wallet, it is more likely banks will focus on more “silo-ed” products. And unlike Google Wallet, banks will hopefully experience fewer hiccups in the early stages of launch.
An evolutionary development approach is sensible for banks for a few key reasons. It will allow banks to meet the needs of their clients while saving themselves the hassle of being in the business of changing consumer behavior. This is something mobile wallet providers have struggled with to date. As a prime example, ISIS was delayed multiple times to ensure the appropriate level of consumer “readiness”.
With high risks and looming uncertainty in mobile payment (e.g. NFC versus non-NFC) it will take a visionary company/joint venture to turn the mobile wallet into a reality for mainstream commerce. And let’s face it; bankers aren’t the best innovators. There are far too many loose ends that need tying that are outside of the scope of core banking practices. Because of this, banks should find it difficult to justify allocating resources to remedying the mobile wallet quagmire.
For the shorter term, banks are better suited with a mobile payment strategy that offers complimentary products that round out the current suite of banking services. Rather than revolutionizing the wallet, the mobile payment products we will likely see offered alongside our current account will meet our basic transactional needs. They won’t change our lives but they will be straightforward, easy to use, and will seamlessly connect with our bank accounts and credit cards.
In the longer-term, some customer focused banks, such as PNC, Barclays, or Wells Fargo may rise to the occasion to provide us what we are looking for in a mobile wallet. However, even these banks will surely let other companies bear the risk of taking the mobile wallet to market first and will happily follow behind.
So, while we might be anxious for the mobile wallet to become reality, let’s leave the banks out of the revolution for now.