Digital Wallets: Who Will Win the Game?
Report Summary
Digital Wallets: Who Will Win the Game?
Market competition will heat up as terminal manufacturers and payment gateways take a provider-agnostic approach to digital-wallet capabilities.
Boston, November 10, 2011 – A new report from Aite Group provides an overview of key providers seeking to launch digital wallets in the proximity-payment arena. Based on 50-plus June to October 2011 Aite Group interviews with U.S. industry stakeholders, the report also assesses key marketplace challenges and evaluates the positioning and strategies of each player.
In an effort to protect their existing business, major card brands Visa and MasterCard have committed to near-field-communication-driven digital-wallet strategies that include storing payment information on mobile devices, allowing transactions to be completed in a manner consistent with current point-of-sale payment processing. To fully enable their plans, Visa and MasterCard require new payment-terminal hardware and software to be deployed throughout the United States. The terminal hardware and software providers have taken a provider-agnostic approach, however, and will enable alternative-payments competitors while enabling Visa and MasterCard. This new access to the point of sale will allow alternative-payments players to hone technologically flexible approaches and focus on market-driven value propositions.
“The major card brands appear to be painted into a corner, deploying mobile payments strategies designed to protect their existing business,” says Rick Oglesby, senior analyst with Aite Group and author of this report. “At the same time, they are surrounded by alternative-payments providers that have the flexibility to pursue a wide variety of solutions and allow demand to drive the results. The playing field is set for a major battle, and traditional payments powers appear to be at a disadvantage.”
The report provides an overview of key participants in the digital-wallet arena: traditional payments networks American Express, Discover, MasterCard, and Visa; alternative-payments players eBay/PayPal, ProPay, SparkBase, and Square; and mobile carriers and software providers Device Fidelity, Google, Equinox, Ingenico, Isis, VeriFone, and ViVOtech. It assesses and evaluates the strategies of each firm.
This 56-page Impact Report contains 10 figures and 14 tables. Clients of Aite Group’s Retail Banking service can download the report.