Mercator Perspectives

Mobile Wallets Still Need to Develop Ways To Handle Closed-Loop Cards

Mobile wallets need to offer mobile phone customers a convenient, easy way to manage all payment types if their providers truly want to be successful in displacing the traditional wallet. While a number of wallets are in development, a recent feature on JunoWallet in MobileBeat hints at some of the hurdles that wallet providers and card providers face when trying to move from the physical to the electronic world.

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The article describes how JunoWallet’s chief mobile officer was buying out stocks of gift cards at local stores to give away as incentives. The company had to buy physical cards, scratch off PIN coverings, and then manually enter the cards into its database in order to give them out.

While there are a number of incentives houses that could have easily provided electronic cards for JunoWallet, the lesson learned is not necessarily on the business-to-business side, where this problem has largely been solved. The real lesson comes on the customer side, where individuals need to figure out how they might get their gift cards onto their phones.

Any mobile wallet user might easily enter a single gift card into a mobile wallet if they did not want to be concerned with the plastic. But what about three gift cards, or five? How long will a mobile wallet user spend loading cards that they intend to use up in one trip? Odds are that they will simply tuck the plastic next to the phone in its holster and take it out when they get to the store. Even if they have another form of payment stores on the phone, they can easily split the ticket and save time by presenting the plastic and the phone.

Mobile wallet developers should consider offering an app that can capture the card number through the phone’s camera. The cardholder can then add the PIN and only type four numbers instead of 20. There may be an opportunity for card manufacturers to offer cards with QR codes that allow for an easy transfer into the mobile wallet.

The other piece that mobile wallet developers need to ensure that they have covered is the ability to incorporate virtual cards from all suppliers into the mobile wallet. There are several approaches and platforms for virtual cards, and a mobile wallet developer need to ensure that their wallet is platform agnostic.

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