Mobile Wallets Set to Replace Leather Counterparts; Or Are They?

March 21, 2012, By Sanjeev Ramachandran

Looks like the leathery wallets are in for bad times. Wallets are on their way to shrink into your smartphone with the rapid emergence of Mobile Wallet services like Google Wallet.

But will the portable digital wallets replace the existing customer habits is a crucial question about the popularization of the service in the US.

Before looking for answers, let us do a stocktaking of the scenario. The mobile wallet service allows users with a NFC-enabled device to make contact-free purchases at buying outlets. It makes things quicker and helps to avoid the inconvenience of carrying hard cash with you.

Google has a major say in bringing M- Wallet to popularity in the US with its Google Wallet service. They have bagged deals from Visa, MasterCard, American Express and Discover to allow their cardholders to use the service.

However, more players are eyeing at the pie. A joint venture from AT & T Mobility, T-Mobile USA and Verizon Wireless, named Isis, will hit the US markets this summer. They have bagged deals with major card schemes and found Chase, Capital One and Barclaycard too to join the party.

Well, it is not just the case with the US market. Vodafone and Telefonica have already started pushing their plans for an M-Wallet initiative in Africa and Latin America.

However, M-Wallets will have to struggle to overthrow long held habits of the US customers who are accustomed to using credit cards. Japan, who is a pioneer in introducing M-Wallets as early as 2003, still finds it less used when compared to other payment methods.

However, the growth of M-Wallets will mainly depend on the customer incentives for M-Wallet purchases. Moreover, security concerns like the one that just popped up with Google Wallet recently, has to be tackled at the right moment. Till then, leather wallets are going to stay.

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