This application can in turn be used to execute physical-world transactions in communication with a point of sale terminal, initiate a mobile person-to-person transaction or initiate an e-commerce transaction from the mobile handset.
The mobile wallet will encourage revenue-generating sales and will provide valuable growth opportunities for mobile marketing.
The U.S. must learn the potential of the mobile wallet from its international counterparts. Japan's applications for the mobile wallet have expanded into other lines of business, including card issuance, payment (both online and in the physical world), transit and ticketing, among other applications. In Hong Kong, Singapore and London the mobile wallet adoption that emerged from contactless transit systems has driven mobile payments, and throughout the U.K. it is further driving contactless/mobile evolution. While there are fundamental market and cultural differences in the U.S., we must develop a model that will work within the framework of our ecosystem.
The fragmentation of the U.S. wireless and financial services arenas makes for difficult navigation for carriers and banks. Each entity seemingly has its own agenda, with conflicting goals with regard to customer interaction and revenue generation.
Wireless carriers employ the handset as the primary conduit between themselves and subscribers. Being able to deliver services over the device is paramount to their ability to keep churn to a minimum and average revenue per user as high as possible. Operators therefore want to "own" the wallet because they need to deliver the experience and the look and feel of the device that is consistent among their subscriber bases.
In deploying mobile wallet capabilities, banks want to expand the functionality of the mobile channel, provide compelling functionality to entice their customer base to engage via the mobile channel, while simultaneously maintaining brand presence on each handset.
The difficulty of maintaining this brand control in a handset environment that so far is largely controlled by the carrier depends mainly on the vendor products that allow for individual institution brand separation. Mobile wallet vendors are certainly keeping this in mind when designing their products. ViVOtech, for example, provides the capability for financial institutions to have individual branding — paramount for brand separation in a "drop-down" menu that the mobile wallet will become as more banks offer virtually issued cards available on mobile devices.
Carriers control the key to near-field communication, but there are subdomains within that larger portion that can be controlled by companies that effectively "rent" space on the handset, such as the banks, transit authorities, and others who see value in delivering such services through the mobile handset. Banks must work within the environment that the carriers have created, which at this point means working with established vendors.
The Sprint MyMoneyManager is a mobile wallet developed by the mobile banking vendor mFoundry. Sprint has branded and owns the wallet, but allows for applications to be written to that wallet, as well as unique branding by financial institutions. This situation provides for both carrier control and the potential to funnel financial services through the carrier, as well as ready-made access for banks. All indications are that Sprint wants the wallet to be as open as possible, to allow for as many subscribers to link to as many of their financial institutions as possible, which is of course in Sprint's best interest. Banks currently enrolled include BB&T, Citibank, IBC and PNC. Subscribers can access their PayPal accounts as well as their banks through this medium.
