The mobile wallet wars ignore consumers' needs
Michel Poignant thinks the industry is approaching mobile wallets the wrong way.
The PayToo CEO believes companies should focus their efforts on adding services that consumers value rather than putting technology such as NFC at the center of mobile wallets.
Poignant's argument has legs these days because, let's face it: For all the media hype surrounding mobile wallets, particularly the Pays, there remains very little meaningful incentive for consumers to adopt them as a replacement for traditional payment methods such as credit and debits cards — or even cash.
"With mobile wallets today, we're taking what we have in our physical wallet [plastic cards] and storing it in a smartphone electronically. Tell me why this is new and tell me why this helps consumers," Poignant told Mobile Payments Today in a recent interview.
Poignant isn't the only one making this observation.
Other industry observers have echoed his point about value-added services. Moreover, survey after survey has shown consumers collectively shrugging their shoulders at mobile payments and mobile wallets.
Mobile Payments Today recently published an editorial by Mobey Forum Executive Director Spira Nordlund lamenting that today's mobile wallet providers fail to provide a true value-added service to their products.
Nordlund suggested that banks might develop mobile wallet features that would actively benefit consumers.
"One could even foresee a situation where banks are giving their mobile wallet customers a savings incentive to help them fulfill their true dreams (and not just the dreams of retailers)," she wrote.
It's these types of services that Poignant champions when he attends industry trade shows. He told Mobile Payments Today that he often asks executives at conferences why they only highlight technology when they talk about mobile wallets. "Why [aren't] we talking about ... what the consumer needs with mobile wallets?"
With the unbanked as its target audience, PayToo approaches the mobile wallet from a place that's more about value-added services than it is about payments, Poignant said. He positions PayToo as an alternative to the traditional financial institution, a marketing model the prepaid card industry has used for more than a decade.
But PayToo should not be mistaken for just another prepaid product, he said.
"When we try to explain what we are doing, it's hard for [the industry] to visualize what we do," Poignant said. "We're always compared to a prepaid card or Apple Pay, Android Pay, PayPal.
[But] ... if you provide [consumers] with value and help them with a different way to do something, they can understand what we provide. It's about educating the consumer and changing habits."
PayToo allows unbanked customers "who don't have access to credit cards and banks, to shop, pay bills, buy music and videos and have access to our digital content catalog," Poignant told Mobile Payments Today sister publication ATM Marketplace in a 2014 article.
"We are providers of a payment system," he said.
Adding such capabilities to mobile wallets could help spark interest and adoption among consumers who remain apathetic about products currently on the market.
Numerous consumer surveys in recent years have underscored the mobile wallet's stubbornly slow turn from a niche product to a widely used payment method.
Only 7 percent of smartphone owners claim to have at least tried mobile payments, according to a recent survey from Auriemma Consulting Group.
"It's important to remember that less than half the smartphones that U.S. consumers carry are capable of mobile payments," Marianne Berry, managing director of the company’s Payment Insights practice, said in a press release about the report. "Among those with an eligible phone, 27 percent of consumers we surveyed say that they have used Apple, Android, or Samsung Pay."
But the frequency with which consumers use these products is anyone's guess because many of the major providers don't share that information. This leaves the industry to wonder how successful the Pays really are.
PayToo expanded its reach to consumers earlier this year in a deal with City National Bank of New Jersey.
As part of this strategic alliance, PayToo markets the bank's products and services nationally under the PayToo brand. Customers can perform all of their banking on the PayToo wallet, including depositing their paycheck, topping-up cell phone time with 300 carriers, paying bills and transferring money person to person.
Wallet users have access to the PayToo network of 200,000 locations. These include PayToo Generation II kiosks, the company's biometrically secured cardless ATM and multiservice centers. Additionally, customers can withdraw money any time at any one of 55,000 surcharge-free ATMs in the bank's network.
Poignant said PayToo is working on other deals to further expand its presence in the U.S.
Meanwhile, the company continues its work to get to the heart of what consumers really want from a mobile wallet. It's an approach more providers should take, Poignant reiterates.
"We should start these discussions around what the consumer needs, not the technology the industry wants to put out."
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