Phone holds all the cards
Many shoppers will spend from digital wallets this Christmas, reports Rod Chester
BY the time Australians are feeling the festive spirit of Christmas shopping, many will be buying gifts with their new digital wallets.
Researchers are clear about the future of digital wallets: They’re coming and have the potential to transform online shopping, particularly for the increasing number of people shopping on a mobile or tablet device.
What is not clear is which of the digital wallet options consumers will want to go with and in what form.
At the Australian launch last week of the V. me digital wallet, Greg Storey, Visa’s Head of V. me for Asia Pacifi c, Central Europe, Middle East and Africa, described it as “a digital manifestation of what’s in your pocket”.
“You have a physical purse or wallet in your pocket that carries a number of cards. V. me is the digital version of that wallet,” he said. It sounds simple, yet comScore’s Digital Wallet Road Map 2013 report released in February found there was a “muddled understanding” of digital wallets and their benefits and “the concept is often diffi cult to convey and prone to misinterpretation”. But it’s a hurdle that analysts predict will be met, with comScore predicting the number of people using a digital wallet other than PayPal to grow from a current figure of 12 percent to 50 per cent.
In the Why the Digital Wallet Wars Matter report, Forrester senior analyst Denee Carrington says “Digital wallet operators will wield newfound control and infl uence”.
“Wallet operators will house the inventory of cards that consumers link to their digital wallets and will provide the ability for consumers to defi ne how those cards are used under different circumstances,” she says.
“Wallet operators will also control which offers, incentives and value- added services are present in the wallet.”
Visa’s launch of V. me comes about four months after rival MasterCard launched MasterPass, its digital wallet.
Perhaps not surprisingly, the two launches involved similar statements.
Mr Storey said Visa’s digital wallet solution V. me would offer “ease, convenience and simplicity when purchasing online”.
Back in February, MasterCard Australia divisional president Eddie Grobler used almost the same words, saying its digital wallet was about “convenience, accessibility and security”.
Both of the major card operators have teamed up with a swag of banks and key online businesses.
MasterPass is available now and V. me will be available by Christmas.
Both also say people will be able to store a range of credit and debit cards in their digital wallet, including cards from rival companies, and future developments will include special offers through loyalty cards delivered through the digital wallet. Not that this is a battle between two players. Part of the challenge in predicting the future of the digital wallet market is that there are so many players offering so many mobile and digital wallet solutions.
The Google Wallet ( not yet available in Australia) and Apple Passbook are different versions of the digital wallet concept, while five million Australians already use Pay Pal accounts to buy products online – including from more than 90,000 Australian merchants.
In May, EFTPOS announced it had partnered with mobile transactions technology provider C- SAM in working on a mobile phone digital wallet that would work on touch- and-pay technology, including NFC ( near field communication).
The system will let people pay for bricksand- mortar transactions by swiping their mobile phone.
While the EFTPOS solution is different to V. me and MasterPass, which are designed for simplifying online shopping, it has the potential to be widely used given more than 6.2 million EFTPOS tra- nsactions are made each day and last year Australians spent $ 134 billion at 504,000 merchants using 764,000 EFTPOS terminals.