May 5 for 5: Mobile wallets still finding their way

| by Will Hernandez
May 5 for 5: Mobile wallets still finding their way

Mobile wallets don't have enough going for them right now.

While that statement served as the headline for one of the most-read articles in May on Mobile Payments Today, it's also a state of mind for this industry at the moment. Mobile wallets continue to lack certain features that make them unattractive to consumers and providers haven't figured out the best combination of characteristics to increase their use.

Richard Buckle, founder and CEO of Pyalla Technologies LLC, wrote a blog post about how he believes security concerns and an abundance of options for consumers continue to stifle widespread adoption of mobile payments. He mentioned in his post how things such as loyalty points and rewards programs are still handled separate from most mobile wallets.

Which brings us to the most-read article on Mobile Payments Today in May.

Kohl's is the first retailer to mix Apple Pay, a store charge card and a loyalty program, which is a combination that gives us a glimpse into what's possible with a mobile wallet. Will others follow Kohl's down this road, at least on the Apple side?

May's other most-read articles include an overview of a panel discussion at Shoptalk regarding retailers and mobile payments; the card networks' EMV problems; and our conversation with Patrick Gauthier, VP of Pay with Amazon.

5. "Talking With: Amazon payments exec on brokering consumer trust, solving customer pain points (Part 1)" — Mobile Payments Today sat down with Patrick Gauthier at the Shoptalk conference to discuss a wide range of topics about e-commerce, the checkout experience and what makes Pay with Amazon different from MasterPass, PayPal and Visa Checkout.

One of the most discussed topics at last week's retailer-focused Shoptalk conference in Las Vegas was how merchants can increase both online and mobile sales conversion rates and lessen the impact of the dreaded cart abandoment problem when the checkout experience proves too cumbersome.

Cart abandoment is collectively costing retailers billions every year in potential sales, according to some industry estimates. As retailers suffer with this problem, consumers are left with poor checkout experiences and move from retailer to retailer seeking the easiest methods.

The combination of the two issues prompted Amazon to expand its Pay with Amazon function outside its gate to other retailers. It was a curious move considering the company is essentially helping competitors, though Amazon doesn't see it that way. It believes it's doing customers a service while giving retailers new buyers who might not have otherwise shopped at a particular website.

Mobile Payments Today caught up with Patrick Gauthier, VP of Pay with Amazon, at Shoptalk to discuss the company's new direction with this service.

Read the rest of the article.

4. "The card networks' EMV dilemma" — Blinded by the financial windfall of offloading billions in fraud losses to their own customers, the card brands now face serious risks on a number of fronts. Daryl Cornell, the CEO of Triton, gives his opinion about the current industry.

In an effort to offload billions of dollars in annual fraud costs to banks, processors, merchants, ISOs and IADs, MasterCard, Visa, American Express and Discover hatched a scheme several years ago to bring EMV to the U.S.

The beauty of the plan, which they named "the liability shift," was that it could be sold as voluntary, secure and customer-friendly.

Payments industry participants could decide for themselves whether the economics justified the high price of conversion (not heavy-handed).

Customers could rest assured that implementing EMV would drastically reduce both fraud and the resulting customer inconvenience (good corporate citizens).

Meanwhile, EMV would be brought to the U.S. at little or no cost to the card brands.

The economics of the card payment business model is all about transactions. The card brands' ability to pawn off fraud losses and the cost of EMV conversion without invoking the wrath of regulators depends heavily on the three-legged stool of improved security, consumer protection and voluntary implementation.

Read the rest of the article.

3. "Retailers should seek to own mobile payments" — A panel discussion at the ShopTalk conference in Las Vegas focused on the issues merchants face today as it relates to the mobile customer experience.

When Walmart first announced plans in December for its own mobile-payments system, one of the initial thoughts from the industry was whether we needed another mobile wallet in the market.

But when you considered Walmart's refusal to accept third-party mobile wallets at its stores, and its staunch support of the Merchant Customer Exchange's effort, Walmart Pay made sense.

Add in the fact that some 22 million consumers are actively using Walmart's app each month across different Android and iOS devices and Walmart Pay is a no-brainer.

Shortly after Walmart announced its plans, rumors began to circulate that Kohl's and Target were thinking about launching similar mobile efforts.

That big-box retailers want to keep their brand top-of-mind with consumers at the point-of-purchase is no surprise as third-party providers haven't given merchants much incentive to embrace them.

This was one of many topics discussed during a panel this past week at the ShopTalk conference in Las Vegas.

Read the rest of the article.

2. "Mobile wallets don't have enough going for them right now" — Richard Buckle, founder and CEO of Pyalla Technologies LLC, wrote a blog post about how he believes security concerns and an abundance of options for consumers continue to stifle widespread adoption of mobile payments.

A recent report on "60 Minutes" discussed how vulnerable smartphones have become and the gaping holes present in the background SS7 networks.

In an interview, security specialist John Hering, cofounder of Lookout, said, "In today's world there's really only two types of companies or two types of people … those who have been hacked and realize it and those who have been hacked and [don't realize it]."

Every bit as important was the scene-setting opening to the "60 Minutes" story:

A lot of modern life is interconnected through the Internet of Things — a global empire of billions of devices and machines. Automobile navigation systems. Smart TVs. Thermostats. Telephone networks. Home security systems. Online banking. Almost everything you can imagine is linked to the World Wide Web. And the emperor of it all is the smartphone.

But if the emperor of all our interactions with the world is the smartphone, can the majority of us be categorized as dumb end users?

If smartphones can be hacked as readily as the "60 Minutes" program demonstrated, and if all of us, knowingly or not, have been hacked, does it make us less dumb to put all of our card information into a phone to be stored somewhere in a server farm?

Read the rest of the article.

1. "Kohl's first retailer melding Apple Pay, store charge card, loyalty program" — Kohl's customers can now tap Apple Pay to use their store charge cards and not miss out on earning loyalty rewards in the process.

Kohl's customers can now tap Apple Pay to use their store charge cards and not miss out on earning loyalty rewards in the process.

The new mobile payment option is being deployed to 250 stores and expected to be in all stores nationwide by end of this month, according to an announcement.

At that point Kohl's will be the first retailer to deliver a one-tap checkout approach that includes its own store credit card and loyalty program.

"Kohl's is blending the physical and digital shopping experiences in more ways than ever before. Offering conveniences to Kohl's customers that make it easy for them, like a seamless one-tap checkout in Apple Pay that integrates our value-driven Yes2You Rewards loyalty program is one of the ways that we are leading as an omnichannel retailer," said Ratnakar Lavu, Kohl's CTO.

"We are continuing to innovate in mobile to provide an easy, seamless shopping experience whether it's our mobile payment offerings, the features and functionality on Kohl's mobile app or the experience on smartphones and tablets."

Read the rest of the article.

Topics: ATMs, Bank Customer Experience Summit, Bill Payment, Card Brands, Carriers / Operators, CONNECT: The Mobile CX Summit, Contactless / NFC, EMV, Handsets / Devices, HCE, In-App Payments, Loyalty Programs, Mobile/Digital Wallet, Trends / Statistics

Will Hernandez
Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of, he spent two years as the content manager for, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago. View Will Hernandez's profile on LinkedIn

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