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digital money
Will Bank-Backed M-Wallets Win?
There are a number of limitations that exist in most people’s banking applications that they want to address, more than adding payment. But I do think payment is slowly but surely becoming an area our clients are looking at.
—Walt Granville, Cachet Financial Solutions
Another option became available
in July when Mastercard announced Masterpass in-store payments
and the ability for issuers to incorporate the digital wallet into their own mobile banking apps. Initial issuing partners include
In May, Wells Fargo became the second-largest U.S. bank behind Chase to announce its own mobile payments platform.
Ally Bank, Bank of America, Capital One, Citi, Fifth Third Bank, First Tech Federal Credit Union, SunTrust and Virginia Credit Union, among others.
“The launch of the new Master- pass marks an important in- dustry milestone as we become the rst network to deliver a bank-branded, all-digital payment solution that works across devices and retail channels,” Matt Barr, senior vice president, digital payments and labs, Mastercard, said in an announcement.
Citi has o ered its own digital wallet, Citi Wallet, for online pur- chases since 2014, but so far it has o ered no mobile payment option in the U.S. for use at the point of sale. Customers can make Citi payments through Apple Pay, Android Pay and Samsung Pay.
Citi also is exploring global mar- kets with its wallet strategy. (See sidebar on page 31.)
“Digital wallets have been in
use for e-commerce transactions for quite some time, but the widespread adoption is driving
a new wave of innovation in mobile wallets, and banks are uniquely positioned to enhance their current product set by leveraging the capabilities of the mobile device
to further strengthen their rela- tionship with customers,” says Barry Rodrigues, head of digital payments for Citi Global.
Changing Consumer Habits
The road to widespread mobile wallet adoption still could present banks with the same challenges third parties have encountered, says Art Roca, senior director
of payment services for Alliance Data, a marketing and loyalty rm that provides branded credit products for several high-pro le retail brands.
“The plastic card has withstood pretty well. It’s not broken,” Roca says. “And consumer habits are pretty hard to change unless you connect and interact with [consumers] as loyal customers and o er value-added services beyond the payment.”
Roca points out that even among customers with the right kind of phone and application, and an eligible card, only 19 percent end up using a mobile payment on that device, according to a mobile
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