Minutes of a workshop that took place at CARTES 2012:
A mature Market ?
The first wallet concepts were introduced in the years 2000. Since then, the market launched several pilots, such as, Maestro International in Europe. But the latter’s dream to reach mass market was never reached. This year, it seems that the market is mature as several companies were offering their wallet solutions at CARTES.
Telecom operators have now implemented wallet solutions into smart phones to add value to customer services. Once again, the US is ahead and major wallet suppliers are ready to deploy their solutions for banks and telcos, the two main targeted industries.
The business concerned is a new Eldorado According to Goldman Sachs, Electronic Commerce is growing steadily: from 572 billion dollars in 2010 to an estimate of 960 at the end of 2012.
Mobile Commerce is following the same trend with 10 billion dollars this year against 3 billion in 2010 and 30 billion estimated in 2015.
Mobile Commerce should represent 12% of worldwide’s E-Commerce at the end of the year.
The first challenge to face to succeed it to define the right added value services for end-users. In the Retail banking industry for instance, E-Banking & E-Payment services were the first solutions to be implemented into the mobile. But the expectations in terms of security are not met yet and bankcards’ data is too sensitive for issuing banks to accept storage into non-controlled devices.
Moreover, the relationship between end-users and banks should be direct and not via Telecom Operators to be able to understand and meet the customers’ expectations and needs.
Last but not least, bankcards without plastic supports are not the preferred solutions for the majority of traditional retailing banks. In Europe, they have already deployed costly “Chip Cards” in order to fight against face to face potential fraud. EMV cards are todays’ preferred solutions to eradicate E-Commerce as well as M-Commerce fraud to using an E-Wallet software solution for non-face-to-face transactions.
However, Cloud perspectives, such as the Biometric digital signature, may be the right solutions for risky mobile transactions in order to access E-Wallet features, like payment or banking services. 3D Secure is already in place for E-Commerce transactions and has been adopted by the majority of retailing banks.
An extension to Mobile Commerce is already on its way and may be an answer for E-Wallet development perspectives. But new risks must be faced first in order to succeed on this new Eldorado. For instance, “virus” attacks on smartphones are becoming reality. Cert-Ist reports an average trend of 7 new viruses every month since July 2011, most of them being key-loggers.
Examples of pilot successes
Discover launched a pilot with an E-Wallet philosophy implemented into customer mobile phones for M-Commerce transactions and banking services.
A ZIP Wallet with NFC technology was deployed on 2008 in the United States.
MasterCard also launched its own solution for banks this year called “Paypass Wallet”, etc.
All the ingredients are now present for the success of E-Wallet. Consumers are now expecting solutions from banks and Telcos on their mobile phones in order to be able to purchase in security.