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Bryan Yurcan
Bryan Yurcan
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Mobile Wallets: Hype Vs. Reality

Many consumers still haven't yet been convinced that paying with a mobile device is any more convenient than using their credit cards.

Despite the hype, mobile wallets have not yet spread like wildfire among U.S. consumers. Many consumers still haven't yet been convinced that paying with a mobile device is any more convenient than using their credit cards, or even cash.

I recently spoke with Tom Kunz, SVP of digital channels for PNC Bank, about the state of mobile wallets for the upcoming September digital issue of Bank Systems & Technology. He believes mobile wallets will only achieve widespread consumer use when the different players in the mobile wallet ecosystem cooperate on some basic standards in order to bring the technology to scale.

"I do see convergence happening, but it's probably a couple of years away," Kunz says. "I think the plumbing of the cooperation will be laid over the next year or so -- figuring out things such as standards, security, network rules, card not present rules -- and then what will be left is the business arrangement."

Kunz also believes that mobile wallets will catch on with consumers in a greater capacity when providers and merchants more fully take advantage of the technology available in mobile devices to offer functions not available with plastic cards, such as using geo-location technology to alert consumers of deals at nearby retail locations. Kunz also does see the cloud-based wallet as the "end state" and becoming the most popular mobile wallet technology, though he adds that "the QR code has a longer shelf life than any of us expected, and NFC has a longer tail than anyone predicted."

Ultimately, Kunz believes the mobile wallet will become the primary payments method for consumers, simply because mobile is already transforming many other aspects of how people live their daily lives.

"Mobile is a catalyst in every industry to reinvent the way you do business with your customer," he says. "Payments will be a by-product of that."

[Related: The Mobile Wallets Race: Placing Multiple Bets ]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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Byurcan
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Byurcan,
User Rank: Author
8/15/2013 | 8:00:14 PM
re: Mobile Wallets: Hype Vs. Reality
I personally can't envision my wallet being replaced by a smartphone, but then again 10 years ago who would have thought people would be trading stocks on their phone?
Natalia.
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Natalia.,
User Rank: Apprentice
8/15/2013 | 2:24:09 PM
re: Mobile Wallets: Hype Vs. Reality
How about some kind of incentive for customers to start using this technology? $5 or whatever off on your purchase when you use your smartphone. 'Course, the people that are most likely to be on the lookout for these kinds of offers are probably the ones that can't afford smartphones in the first place.
Cara Latham
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Cara Latham,
User Rank: Apprentice
8/14/2013 | 9:50:44 PM
re: Mobile Wallets: Hype Vs. Reality
All of the previous comments bring up good points, but I think in addition to having a customizable experience, consumers need to feel secure using them, and I don't think the industry is there yet in terms of convincing them.
Byurcan
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Byurcan,
User Rank: Author
8/13/2013 | 1:35:26 PM
re: Mobile Wallets: Hype Vs. Reality
Very true, and we're still obviously not there yet. But I do agree with Kunz' assessment that eventually that once mobile wallets can provide those kind of services, they'll become widespread, simply use everything we do has become "mobilized" so to speak.
MichaelBalk
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MichaelBalk,
User Rank: Apprentice
8/13/2013 | 1:38:49 AM
re: Mobile Wallets: Hype Vs. Reality
Mobile experience to be persuasive, I need to both customize the product experience and make the payment. Possible example - purchasing a Yankees ticket on-line which includes a package for a parking space and a food/drink credit. Purchase everything via the phone or tablet, appropriate seat maps and parking lot locations. Stored credit for the tickets, parking space and meal on all the device - I never need to open the wallet. Adoption requires complete emersion - if the experience ever requires me to print out paper or open my wallet the advantage has been reduced as now it is a mobile + paper/card solution instead of a mobile solution.
MichaelBalk
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MichaelBalk,
User Rank: Apprentice
8/13/2013 | 1:38:49 AM
re: Mobile Wallets: Hype Vs. Reality
Mobile experience to be persuasive, I need to both customize the product experience and make the payment. Possible example - purchasing a Yankees ticket on-line which includes a package for a parking space and a food/drink credit. Purchase everything via the phone or tablet, appropriate seat maps and parking lot locations. Stored credit for the tickets, parking space and meal on all the device - I never need to open the wallet. Adoption requires complete emersion - if the experience ever requires me to print out paper or open my wallet the advantage has been reduced as now it is a mobile + paper/card solution instead of a mobile solution.
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
8/12/2013 | 9:26:52 PM
re: Mobile Wallets: Hype Vs. Reality
I think the main point that Kunz makes, and it's an important one, is that putting the plastic card in the mobile device has no value by itself. Everyone is trying to figure out what more it will take to get customers interested in mobile wallets, and I think he has some good suggestions, particularly with the use of geo-location.
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