Published on the 27/03/2014 | Written by
Enterprises wanting to cement their relationship with consumers need to pay close attention to the rapid-fire developments taking place in the mobile payments and digital wallet space…
Almost three out of four Australians expect mobile wallets to replace physical wallets by the end of 2021. A recently released survey by the Commonwealth Bank, which is investing heavily in digital payments technology both for consumers and merchants, found that besides offering an alternative to physical cash and card payments, mobile wallets were expected to be used to store loyalty points, distribute and spend coupons, store receipts and act as a travel pass.
Given that Ernst & Young’s Mobile Money report, also launched this month, indicated that just 11 percent of Australians were currently regular users of what it termed “mobile money” this points to a fast escalating trend, leaving companies which want to snare some of the real estate in the mobile wallet with limited time to prepare.
In the past enterprises which wanted to secure “wallet space” issued a mag-stripe loyalty card or a printed card that could be updated after every transaction. These cards fit into every physical wallet or purse.
But a plethora of different payments systems is evolving which have differing form factors and operating systems. The challenge for many enterprises will be deciding which mobile payments platform or digital wallet to back.
The major banks are forging ahead with their own payment apps and terminals, global companies such as MasterCard and Visa have digital wallets, reports have surfaced in the Wall Street Journal that Apple is planning to launch its own digital wallet, while closer to home local accounting software business MYOB will shortly make its PayDirect system available which turns an iPhone into a payments terminal that can be integrated directly with the MYOB accounting platform.
Foad Fadaghi, managing director of technology analyst Telsyte, said that it was too early to attempt to pick a winner as the penetration of digital wallets remained very low. Rather than attempting to divine which digital wallet or payments platform would prove successful, Fadaghi said enterprises should work with their existing financial service providers – leveraging that existing relationship into the mobile payments space.
However he acknowledged that there was also room for some form of middleware to exist which would allow enterprises to craft applications – for example offering loyalty programmes or coupons – which could run across several platforms. Fadaghi pointed to Melbourne start up Rewardle as an example of a system which would allow merchants to develop loyalty programmes that could run across multiple platforms.
