8 Plot Twists in the Mobile Wallet Drama

Published August 14, 2015 10:06 AM

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Updated October 20, 2016 10:32 AM

1 Min Read

The mobile wallet market is constantly changing, often in unexpected ways. Products have evolved dramatically in a very short amount of time, and companies that seemed committed to one strategy a year ago now find themselves on a completely different path.

Injong Rhee, senior vice president of KNOX Business for Samsung Electronics Co., speaks during the Samsung Unpacked 2015 event in New York, U.S., on Thursday, Aug. 13, 2015. Samsung will get the jump on Apple before the expected September release of successors to the iPhone 6 and iPhone 6 Plus, which have won over premium users, with the S6 Edge Plus and the Note 5. The 5.7-inch (14.5-centimeter) screens and addition of Samsung Pay is meant to help the company stand out from the array of inexpensive devices by Chinese vendors using the same Android software. Photographer: Chris Goodney/Bloomberg *** Local Caption *** Injong Rhee

Chris Goodney/Bloomberg

Samsung Pay Comes to USA Before Europe

Samsung only began testing its mobile wallet in South Korea in July, and there were hints that Samsung Pay would hit Europe next. But in a mid-August reveal, Samsung declared that its wallet's U.S. launch was imminent, with beta testing beginning before the end of the month.

A barista prepares a coffee drink at a Starbucks Corp. store in Beijing, China, on Tuesday, March 8, 2011. Starbucks Corp., the world's biggest coffee-shop chain, will start selling its Via instant coffee in the greater China region, which it forecast will be its biggest growth market in two years. Photographer: Nelson Ching/Bloomberg

Nelson Ching/Bloomberg

Starbucks' Fintech Plan Is About Loyalty

Starbucks made a huge commitment to fintech development in early 2014, redefining CEO Howard Schultz's role to give him more time to devote to mobile payments. But instead of white-labeling its successful mobile app, Starbucks has begun working with third parties to extend the reach of its loyalty program.

Valerie Soranno Keating, chief executive officer of Barclaycard, the consumer credit-card division of Barclays Plc, wears the company's new bPay PayBand, a wearable contactless payment device, during a Bloomberg Television interview in London, U.K., on Friday, June 13, 2014. The pound reached the strongest level in 19 months against the euro after Bank of England Governor Mark Carney said the institution may raise interest rates from a record low earlier than investors expected. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Valerie Soranno Keating

Chris Ratcliffe/Bloomberg

Wearables Fit In

When Google Glass went off the market, it seemed like the wearables fad had ended. But many companies never gave up. Barclaycard is even betting that consumers will pay to use its payment-capable wristband; Disney World reported wide adoption of its MagicBand; and Nymi is working to combine wristband payments with biometric authentication.

A customer exits a Rite Aid store in New York on June 16, 2003. Rite Aid Corp.'s former chief executive officer, Martin Grass, will plead guilty tomorrow in federal court in Harrisburg, Pennsylvania, where he was scheduled to begin trial next week on accounting fraud charges. Photographer: Daniel Acker/Bloomberg News.

Daniel Acker/Bloomberg News

Rite Aid's 180

When Apple Pay launched, Rite Aid took its commitment to the Merchant Customer Exchange's CurrentC wallet so seriously that it blocked all NFC payments: Apple Pay, Google Wallet and even contactless cards. Despite the media backlash, Rite Aid stuck to its decision for almost a year. Finally, in August, the pharmacy chain began accepting all NFC payment options including Apple Pay once again.

The CurrentC application (app) is displayed on an Apple Inc. iPhone 5s in this arranged photograph in Washington, D.C., U.S., on Thursday, Oct. 30, 2014. CurrentC, the retailer-backed mobile-payment system touted as an alternative to Apple Inc.'s platform, was hacked during a test of the technology, resulting in some e-mail addresses being stolen. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

MCX MIA?

With Apple Pay nearing its first anniversary and Samsung and Google set to debut new mobile wallets in the coming months, the Merchant Customer Exchange is likely feeling some pressure to get its own wallet to market after three years of development. But despite predictions of a third-quarter premiere, the venture still hasn't set a launch date.

The Ebay Inc. Venmo application (app) is arranged for a photograph on an Apple Inc. iPhone 5s in Washington, D.C., U.S., on Friday, Aug. 22, 2014. After downloading the Venmo mobile-payment app onto a smartphone, users can connect them to bank and credit-card accounts, and then link up with friends to send and receive money on-the-go. Venmo, based in New York, alone handled $314 million in mobile payments in the first quarter of this year, up 62 percent from the prior quarter. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

The P2P Generation

Over the past decade, many companies tried to come out with mobile person-to-person payment platforms, but the concept never seemed to appeal to consumers. The rise of social media changed all of that, with the successful Venmo app benefiting from its built-in social feed. And companies like Facebook and Snapchat are quickly adding P2P capabilities to their own apps.

A sign for the launch of the Apple pay system, from Apple.Inc is seen displayed at the entrance to a McDonald's Corp. restaurant in London, U.K., on Tuesday, July 14, 2015. Apple Inc. is making the U.K. the first market outside the U.S. for its digital-wallet system as the company fights for a place in the electronic-payments industry. Photographer: Chris Ratcliffe/Bloomberg

Chris Ratcliffe/Bloomberg

Less Is More

It was a long-held belief that for a mobile wallet to succeed, it must have some kind of built-in loyalty program to entice consumers to change their payment habits. But Apple Pay launched a year ago as a bare-bones payment service with no such program built-in, and in its 2.0 version it will rely on retailer loyalty programs rather than build an Apple-branded program from scratch.

Wolfe, Daniel

Softcard's Hard Sell

After being forced to change its name from "Isis" when a militant group turned the brand toxic, the telco-backed mobile wallet venture Softcard had to find a way to get its new name out. It made the bizarre choice to turn a countertop NFC reader into a wide-eyed puppet called "Tappy." But despite Tappy's best efforts, Softcard had to shut down.