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by its network of member mer- chants, including Walmart, Target and Best Buy.
The trend of bank-backed wallets could signal a new direction for mobile payments, a method that’s struggled to achieve widespread consumer adoption. Only18 percent of North Americans make mobile payments regularly, even though
52 percent of consumers report that they’re “extremely aware” of mobile payments, according to a 2015 Accenture survey.
The question is whether nan-
cial institutions have a shot at winning the wallet race, and industry observers say the banks have some inherent advantages over the third-party platforms. Banks stand to reclaim half of the market by developing their own mobile wallets, says Richard Crone, CEO of research rm Crone Con- sulting LLC. He estimates there are 60 million to 100 million active wallet users worldwide.
“The one who enrolls is the one who controls,” Crone says. “If the bank hasn’t enrolled the customer, they’re reducing their franchise value and turning over their busi- ness to the ‘Pays’ one enrolled user at a time.”
Banks traditionally have taken
a conservative approach to inno- vation, preferring to watch others innovate before taking any action. So it’s no surprise that banks have waited until now to jump in so
they could get a feel for the market
rst, explains Rick Oglesby, presi- dent of research and consultancy rm AZ Payments Group. “Banks have always wanted to own and brand the payment experience.
As these third parties have gotten involved and started trying to o er their own wallets, we’ve always said that sooner or later the banks would have to get go- ing on this,” he says.
Joshua Gilbert, partner with in- dustry advisory group First Annapolis, says it’s better late than never for banks to enter
GoinG Global
the fray. “They’re feeling a lot of competitive pressure to do something, and I think it’s the right conclusion,” he says.
All Eyes on Chase Pay
Perhaps the most anticipated
FI player in the mobile wallets game is Chase. Chase Pay could
volume 9 • fall 2016
The trend of banks launching their own mobile wallets is spreading in global markets.
In February, Citi Banamex in Mexico and Mastercard unveiled the Banamex Wallet, a mobile app leveraging host card emulation (HCE) technology to enable Android users to make contactless payments. Samsung and Citi also announced plans to deliver Samsung Pay in the Asia-Paci c region, speci - cally in Singapore and Australia.
Banks in Switzerland also appear to be taking some leadership on the mobile payments front. The ve biggest Swiss banks—ZKB, Raiffeisen, PostFinance, Credit Suisse and UBS—are forging an alliance with some
of Switzerland’s retail heavy hitters to create a digital payments system that allows for mobile access. Retailers partnering with the banks include super- market chains Migros and Coop, along with the telecom rm Swisscom.
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