Despite Apple Pay, 2015 NOT The Year Of The Digital Wallet


SAN DIEGO—Apple Pay is generating greater interest in mobile payments among consumers, financial institutions and merchants, but don’t expect 2015 to be the year mobile wallets take off.

Even though Apple will eventually do for mobile payments what it did for smartphone acceptance, two analysts told that there remains a great deal of critical mass to be reached before mobile wallets are commonplace.

But, the sources agree, Apple is speeding movement toward mobile payments and eventually toward expanded use of the digital wallet for purposes such as identification.

James DeBello, CEO at Mitek, said with Apple Pay putting mobile payments in the “national vocabulary,” the conversation around mobile and digital wallets has begun in earnest and the “market has been ignited. Mobile payments and digital wallets will grow, but it will take time to get lift and critical mass.”

Consumers Need Time

DeBello recalled that 10 years ago the common thinking was that it takes eight years for a new technology such as mobile payments to become mainstream. “Today that time period is likely shortened to maybe five or six years. It simply takes time for consumers’ habits to change.”

DeBello said all the TV ads for Apple Pay and the simplified user experience with the new service are great for mobile payments acceptance. “Mobile wallets are getting ready for takeoff. But, again, this year they won’t leave the tarmac.”

Jeff Kaufman, president of retail services at FirstBank in Lakewood, Colo., told that as a result of Apple Pay’s impact that more e-wallet players will be introduced this year and existing offerings will take greater hold as Apple “opens the door.”

DeBello said that Apple Pay even has merchants moving quickly to accept mobile payments, helping to eliminate one of the biggest roadblocks to mobile payments—a limited number of POS terminals capable of accepting mobile swipes.

“Historically there have been only a couple hundred thousand (mobile payment capable) terminals among merchants, but that number is growing quickly,” said DeBello. “The new POS terminals are flying off the shelves and the payments market is being transformed right in front of our eyes.”

Kaufman said that Apple Pay has brought the “cool factor” to mobile payments. “Apple certainly has raised the bar and put pressure on other e-wallet providers. But all of this will still take a little time.”

Digital Identity Wallet

DeBello said that the acceptance of digital wallets and improvements in mobile imaging will make the next step the “digital identity wallet.” Mitek mobile imaging technology captures driver’s license data to speed mobile account openings and information requests.

“We have been providing this service for Progressive insurance for price quotes,” explained DeBello, who said Mitek now offers browser-based mobile imaging. “That is a breakthrough. Before you had to have an app to use mobile imaging. But if someone is enrolling for an offer, for example, you don’t want them to have to download an app first, you want them to enroll right from the web.”

DeBello added that as the big e-wallet players, such as Apple, Google, MCX and Softcard focus on the digital payments wallet, “there is the rest of the wallet to consider. My prediction is that more businesses and financial institutions will focus on capturing information from driver’s licenses and other forms of identification, which will eventually eliminate these forms of plastic, too, from the physical wallet. People hold a lot more ID cards than they do payment cards.”


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Copyright Year: 2019
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