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Mobile wallet wars? They haven’t even begun …

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Looking back on 2015, it’s obvious that blockchain was the big focus as mentioned last week.  There were other things though, particularly the increasingly intriguing wallet wars.  Mobile wallet wars have been bubbling for a while, with stagnant attempts to achieve something from the likes of O2 and Orange.

Barclays Pingit livened the game a bit, then we got Apple Pay and … things still stagnated.  Some say Apple Pay is not working.  I just believe it’s just not found its comfort zone yet.  Now that we have Samsung, Android, Chase and more entering the fray are things going to change much next year?  I reckon they will.

So the key to all this is the comfort zone.  What is the comfort zone for a mobile wallet?  It’s when it’s easier to use the wallet than a card or cash.  I personally have not found the reason for using a mobile wallet yet, as card and cash is easier.  When you get to the checkout, if you have to get your mobile out to pay then, in my case, my cards are in my mobile case and I just get the card out.  After all, entering a PIN or fingerprint on my phone makes it just as hard as entering a PIN or touching the contactless payment on the terminal.  So I use the card.

Meanwhile a friend of mine is a dedicated Apple Watch fan – I’m not, got one and never use it (not even to tell the time) – and he loves it as it’s contactless and so can tough and go across all of London without touching a card or PIN.  So that’s a comfort zone factor.  In fact, the real focal point of the comfort zone is when there’s a reason over and above other form factors to use the mobile wallet.

Convenience is one.  If it’s easier to touch and go with a watch than a card or phone, then the form factor works.

Security is another motivation.   If it feels more secure using a fingerprint than a PIN, then that is a motivator for changing form factors.

Loyalty is a key factor.  If I get increased rewards using the mobile wallet over the card or cash forms of payment, then that’s a motivator.  The challenge there is making the reward system relevant to me.  For example, giving me increasing returns on the things you know I buy rather than services I never use.  A bank knows what those are, as you know where I spend money most frequently.

Savings is another.  Unlike a reward scheme, discounting for using mobile wallets makes people change behaviours.  We saw that in London with the launch of the Oyster card, where cheaper journeys made millions move rapidly to the new payment scheme.  It had convenience too, but discount journeys were the major motivator.

Even with all these factors though, something’s missing.  Something.  What is it?


You need a differentiated experience.  Simple, fun, integrated, useful and preferred are the keys here, and these are best exemplified by Starbucks, Uber and few others.  In fact, there are very few mobile wallet payment schemes that really work, but the Starbucks app is the one that most focus upon.  I include Uber, purely because the ease of a journey where no cash is involved – in fact, no payment is involved – is my sort of experience.


Starbucks’ process seven million weekly transactions from 13 million mobile users, growing at 50 per cent annually and, tellingly, Starbucks processed 90% of all mobile payments in 2013.  What is Starbucks’ secret sauce?

Simplicity, utility, relevance along with convenience, loyalty, savings and a great user experience.  Above all of these, I would add queue jumping, but that’s just me.

So these are all things that need to be consider by Apple, Samsung, Google, Chase and more as they roll-out mobile wallet services, and this may prove to be the most interesting area to watch in 2016.



Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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