When it comes to everyday spend, there arestill few things more convenient than pulling out your trusty debitcard, swiping it, and moving on. The card networks have evenobliged those of us with short patience spans (like me) to not evenbother to sign for small transactions. Just give me my receipt so Ican get going. I like that.
But, there are other transactions where I carefully select mypayment card. For example, when I’m offered a nice discount forusing that card, such as at my favorite retailer. And so, my walletcontains a few payment card types. Some of them I use rationally,some of them not. I think I’m a pretty typical consumer (perhaps abit more knowledgeable than some).
Now I’m thinking about mobile wallets, such as the new AMEXoffering or online wallets, like PayPal. There are others too, allvying for a slice of spend. Actually, what they’re vying for is tobe top of wallet – or in this case, top of mobile. How is thatlofty position reached? That depends on the value a consumer putson its characteristics, such as convenience, security, acceptance,speed to spend, and cost.
In considering schemes like the new AMEX product for example, whatstrikes me is that the strategy entails establishing andmaintaining another payment type – in this case a prepaid account.PayPal has a similar constraint in that, while I don’t have toprefund my PayPal account, I’m still defining a default fundingmechanism -and it’s not quick or easy to change that on thefly.
Establishing an e-wallet should be like using your physicalwallet, where I simply have multiple payment types that I can “pullout” and use at my discretion. I’m not sure that adding anotheraccount layer on top of that brings any sustainable new value tothe payment experience. In other words, I’m seeing a lot of focusbeing put on payment accounts, but perhaps the real value will bein the development of a safe, secure, and agnostic e-walletapplication – one that can be leveraged for any kind of account theconsumer wants to store in it. I believe this is where traditionalfinancial institutions and the card networks have a very strongadvantage and one that I’m not sure I see them leveraging just yet.Simple, just not easy.