Denmark's Banks Want a Mobile Wallet Where Anything Goes

More mobile wallet consortiums failed last month, with two folding in New Zealand and Canada, escalating doubts about the prospects for cooperation among competitors in mobile payments.

But the consortium model is faring much better in Denmark, where a group of 62 regional and small banks called Bokis is cooperating to launch a mobile wallet that aims to attack several problems that have plagued other cross-industry efforts.

The latest failures — New Zealand's Semble Wallet and Canada’s suretap — join other cross-industry efforts like the U.S. merchants' MCX, the U.S. telcos’ Softcard and the U.K.'s Weve. One of the factors that worked against these wallets is that many were set up as defensive measures; MCX, for example, was founded by merchants that wanted to prevent banks from taking control of customer data.

The Danish banks have a more welcoming mindset, and though it is a bank-run venture it is designed to support a wide range of payment options rather than funnel transactions through the one that is most profitable to the mobile wallet's backers.

The Bokis wallet will support Dankort — Denmark's domestic debit payment option which has broad nationwide merchant support — along with Visa and MasterCard for both domestic and cross-border transactions. It also ties into Swipp,  one of the two existing person-to-person mobile payment solutions in Denmark that support mobile, online and point-of-sale transactions, said Hans Henrik Hoffmeyer, senior vice president and head of mobile services for Nets, a Copenhagen-based payments technology firm the consortium hired to develop and implement the Bokis wallet.

The interoperable NFC-based mobile wallet is set to launch this fall.

Participating banks may issue the virtual payment cards they choose to support within issuer-branded wallet apps. The core platform leverages host card emulation (HCE) and tokenization for all participating banks, but each bank may customize the wallet's design and front-end functionality, Hoffmeyer said.

The wallet's common underlying architecture and enrollment process may help simplify consumer adoption.

"The customer communication and general rollout will be much easier when all participating banks use the same setup," Hoffmeyer said.

Denmark's banks aren’t the first to broadly cooperate on mobile payments. Canada has a solid history of bank cooperation in developing Interac, its national debit scheme. Founded in 1984, Interac has developed into a foundation for mobile payments via its Flash app, which also has a version that supports Apple Pay.

“Interac is the poster child for cooperation between banks,” said Christie Christelis, president and CEO of Technology Strategies International, a Toronto-based payments consultancy, noting that unlike certain other countries and industries, Canadian banks were able to find common ground fairly easily because there are relatively fewer  players.

Canadian laws also require domestic ownership of banks, which further aided development of common payments standards, Christelis added.

“When you get the five biggest players around the table you could fairly easily get agreement on payment infrastructure ventures like Interec, and the fact that ownership of the large Canadian banks must remain in Canadian hands also helps because it allows home-grown solutions to be developed, tailored to the local industry’s needs,” Christelis said.

What’s not clear yet is whether Interac’s Flash mobile payment technology will evolve to a full-blown mobile wallet like the one Bokis is developing, with local debit payment options offered alongside other payment types, including credit and loyalty cards, Christelis said.

As for Denmark’s effort, it is quite interesting and one to watch, Christelis said.