The Mobile Wallets Flying Under the Radar

The serious money in mobile payments is mostly behind the scenes and mobile wallets may not be far behind.

Sure, there are the transactions and processing fees that happen after a credit card sale, and most of those are not likely to go away any time soon no matter the payment device.

But then there is the dynamic of aggregation.

There is what I call aggregation on the top, where a company aggregates others, with itself becoming the prime, consumer-facing vehicle.

Over-the-top aggregators include Shopkick, which aggregates retailers like Walmart, BestBuy and Target and Google Wallet, which aggregates various credit card brands under its umbrella.

Then there is aggregation on the bottom. For mobile transactions, this can create essentially the same ultimate result, but the aggregator is never seen.

This dawned on me in a conversation I was having with Chris Gardner, co-founder of Boston-based Paydiant, a company most people have never heard of.

The company just inked a deal with Pulse, part of Discover Financial Services, for Pulse to market Paydiant’s mobile wallet platform to its 6,000 financial institution customers. Paydiant already had similar deals with Diebold and FIS and is in trials with retailers and banks, including Bank of America.

What strikes me as the big play here is that the retailer incorporates the technology into their own apps, converting those apps into mobile wallets.

Paydiant is hardly the first company to provide behind-the-scenes mobile technology.

As but one example, unseen technology from Retailigence powers many retailers’ apps to check inventory in real time so a mobile shopper knows where she can get the product now, before wasting time going to a store that doesn’t have it.

In the case of mobile payments, the interesting element of the Paydiant approach is that the brand retains their customer connection and the shopper can stick with the app all the way from in-aisle research to payment at checkout.

At checkout, a QR code can be displayed at the checkout terminal, a consumer does a quick scan and pays via phone. At a restaurant, the code can be automatically added on each bill, allowing the consumer to scan and go.

The technology can be included by the bank behind a credit card, the retailer’s app or both.

“We’re bringing banks and retailers together,” said Gardner, adding that more than 60 retailers nationally already are using the mobile wallet system. “We’re building an eco-system.”

One of the banks using the system is Barclays through its bPay app, which after entering credit card information one time, takes a four-digit passcode to pay and that’s pretty much it.

Rather than one, major-branded mobile wallet, consumers may find themselves using many different wallets, though to them, it may look like just one.

Some of the technology around mobile commerce sometimes is best left unseen. 

7 comments about "The Mobile Wallets Flying Under the Radar".
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  1. Rob Schmults from Intent Media, August 1, 2013 at 4:06 p.m.

    Great post Chuck -- the real value of wallets for those who provide them is indeed likely to be their aggregation potential. The wallet providers will have some very interesting data on behaviors across categories, data they can use to provide better service, make recommendations (funded by 3rd parties or not), Catalina style-offers, targeting marketing, etc. I suspect this is part of the reason some retailers (e.g., Walmart) are pushing back on providers like PayPal. They don't like the potential power payments will get by their cross-category awareness. Not just as a revenue stream, but to create customer value (e.g., think of the utility of a universal purchase history in terms of being to replace things, outfitting, deal with service issues, etc.). Definitely going to be an amazing space to watch develop and evolve.

  2. Chuck Martin from Chuck Martin, August 1, 2013 at 4:10 p.m.

    Well stated, Rob and thank you. Some just realizing that the customer data and engagement potential is where it's at.

  3. Naomi Wilson from EZ Commerce Solutions, August 1, 2013 at 5:11 p.m.

    One of the big reasons that Mobile Wallets are Flying Under the Radar is the lack of drive of retail stores adopting a new payment technology. In addition shoppers are not adapting the new technology. (Above) Rob points out that the transaction history of each shopper is captured and can potentially be threatening to participating retail stores. Example, a specific Walmart customer could be specifically targeted by Target based off of their order history and preferences. There is one App, Swift Shopper that allows customers to check out at existing POS, but saves stores 75% in checkout time. Swift Shopper’s policy is to solely share store specific transaction history. Customers can adopt a new method of checkout that will look & feel similar to future Mobile Wallets. They will feel less threatened with this method of checkout and less threatened by future Mobile Wallet Transactions. Retailers can adopt a new type of checkout method (save 75% time), while divorcing themselves from touching each and every item at checkout. Using Swift Shopper will eliminate the complication of adding a costly mobile pos system or cloud back end. Swift Shopper is free to customers and can be downloaded on iPhone or Android and free to retailers. It requires no integration and works in well-known retail stores today. Stores only need to have 2D hand scanners. Return on investment on 2D hand scanners is around 14 months. Swift Shopper models a savings of 100million or more in 5 years for retail stores with GR of 7B or greater. It is definitely a head turner.

  4. Chuck Martin from Chuck Martin, August 1, 2013 at 5:18 p.m.

    Am guessing you produce their literature, Naomi, based on the site?

  5. Naomi Wilson from EZ Commerce Solutions, August 1, 2013 at 5:40 p.m.

    I am a stay at home mother of 4. I came up with the idea, patented it and started the company. I also have as well.
    EZCommerce Solutions is actively looking for retail partners as well as restaurant partners.

  6. Jeremy Geiger from Retailigence, August 3, 2013 at 2:44 p.m.

    Good for everyone. Accelerated innovation. Front-end agencies and innovators can focus on creative ideas & use pre-built back-end tools for local brand availability, payments & more.

  7. Chuck Martin from Chuck Martin, August 4, 2013 at 5:34 p.m.

    Right, Jeremy, and the behind-the-scenes providers can focus on what they do best.

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