Should Credit Card Companies Grow Loyal to Mobile Wallets?

Feb 28, 2013

It’s starting to feel like technological déjà vu. From the printing press and motors, right through to smartphones and Google Glass, every new technology has come with variations of this tagline: less work and greater efficiency means more time spent on other, more enjoyable tasks.

If only that were true.

The truth is, for every new product there’s often a competitive intermediate period. It starts with a flurry of conflicting and overlapping patents, continues with a flooded consumer market and ends at market maturity where a few products and product makers come to dominate.

Should Credit Card Companies Grow Loyal to Mobile WalletsIn the world of mobile wallets we’re entering that middle phase right now, confusing and promising at the same time.

MasterCard, for example, has just upped its game in the mobile/digital wallet space by upgrading its PayPass payment technology, which lets customers pay at brick-and-mortar stores by tapping their enabled cards against a sensor. The financial brand’s move follows a similar announcement that Visa’s digital wallet,, is moving beyond beta phase and 50 US banks will be adding point-of-sale integration later this year. Add to these other mobile wallet players including Paypal, Google Wallet, and to some extent, Passbook, and you end up with a landscape nearly as cluttered as that of the physical wallets they were meant to replace.

Like I said. Déjà vu.

Self-Selection Giving Way to Self-Purchase
But MasterCard’s entry into the mix is unique. Called Masterpass, the app will allow consumers to scan items’ barcodes or QR codes or interface with NFC tags and pay while shopping, skipping the traditional or self-service checkout line. Instead, a digital receipt is created on the smartphone or tablet and confirmed, presumably, by store employees (and, perhaps in the not-too-distant future, by another new device).

Forget point-of-sale. How about point of confirmed purchase? A subtle difference, but very important. To me this feels more like when you leave a store such as Best Buy and employees quickly peruse your physical receipt, confirming your purchases and marking your receipt with a check mark or ‘X’. Think how much faster, painless and seamless that process is than actually paying for the goods. While the new virtual wallets will first be launched in Australia and Canada by the end of March 2013, the US anticipates at least limited adoption sometime later this spring. 

Digital Wallet Clutter or Clarity?
As I’ve written before, customer engagement and brand loyalty comes down to fostering genuine relationships and experiences. Sometimes that means a specific customer reward program. Sometimes it doesn’t. In the case of mobile wallet competition and adoption, financial services companies and others joining the mix are less focused on points-for-rewards stereotypes and instead, for once, really trying to live up to the tagline that opened this piece: less work and greater efficiency means more time spent on other, more enjoyable tasks.

That’s an experience that’ll drive loyalty too – even if the current phase of development and innovation is a bit frenzied and confusing.

So is mobile wallet clutter starting to take its toll?

Beyond industry watchers and experts, not yet. Adoption numbers must reach critical mass before we can really start to gripe. But it’s likely we’re only a few quarters away from that threshold. Until then brands, consumers and financial services companies who have not yet embraced the mobile wallet craze have time to research which platforms they’ll support, evaluate their strengths and drawbacks and gauge how each can simplify the purchase process, and – for retailers – improve ROI.

Do you feel your credit or debit cards should have a mobile wallet component? Would you be inclined to use the service if it were offered? And what types of loyalty rewards could you envision being linked to this payment model? Pay it forward and share your views in the comments section below!