What’s in Your Wallet…err Phone

In the past few months I have been reading up on the mobile payments space and contemplating how it could radically change the local/mobile marketing world. The stakes are high and the list of players looking for a piece of the pie is growing daily. Google, Apple, Square, and PayPal are just a few companies trying to make mobile wallets popular with consumers.

According to research firm Javelin Strategy, $3.1 billion in purchases came from mobile wallets in the past year, which is projected to grow to $34.8 billion by 2018. By any account that is rapid growth. Yet there really have been no real winners in this early game.

To be successful is this space companies need to overcome two important hurdles: 1) consumer adoption of mobile wallet applications and 2) the mass deployment of mobile wallet compatible merchant point of sale (POS) systems.

Consumer Adoption

Google has spent millions of dollars developing and promoting Google Wallet, but it has failed to take off because of limited merchant deployment and limited adoption by Android users. By contrast, in October Apple’s chief executive (CEO) Tim Cook stated that Apple Pay garnered more than 1 million activations in its first 72 hours of service. It is important to note that Apple Pay’s touch-less mobile payments are only available in iPhone 6 and iPhone 6 Plus, as it requires an NFC (Near Field Communication) module not present in earlier versions of the iPhone. Given the fact that consumers upgrade their mobile phones in a less than two-year cycle now that carriers have introduced frequent phone upgrade policies, the hardware issue will not be an issue over time. The key will be creating a consumer benefit that will help spur mass adoption of the mobile payment process. I am sure there are lots of marketing departments working on this issue, so I expect it to be solved.

Merchant POS Deployment

The fact that by 2015 credit card merchants are required to transition their point-of-sale systems over to the kind that accepts chip-based credit cards presents an opportunity to companies that are attacking the mobile payments puzzle at the merchant level.

One such company is Powa Technologies. Interestingly, if you chase investor money you will find out that Powa recently received $80 million on top of $76 million last year in investments. According to the Wall Street Journal, “Powa will use the money to power its U.S. launch during the holiday season and better compete against Square Inc., Shopify Inc., Big Commerce Inc., and others in wooing merchants to adopt its platform for selling.” That is certainly a healthy war chest of money to tackle the POS Deployment issue.

Success Where Others Have Failed

Does anyone remember the CueCat? The CueCat linked barcodes to Web pages through the use of a CueCat Scanner attached to your computer. Having the scanner tethered to your computer the scanner was very impractical to use and ultimately failed due to low consumer interest.


Photo credit: Wikipedia

By comparison the PowaTag mobile application enables the use of QR Codes for routing any form of print advertising to purchase and audio tags (inaudible to humans but detectable by your mobile phone) that can be embedded in TV and radio to enable direct purchasing.


Photo credit: powatag.com

In terms of an integrated approach that addresses many types of media, of all of the platforms and systems I have researched the Powa approach seems to be ahead of the competition. If they are successful at getting the platform deployed across a wide array of brands and merchants they stand to help fuel consumer and merchant adoption of mobile payments.

What does this all mean for brands and merchants who target locally? Traditional advertising campaigns that typically were awareness-generating now become direct-response vehicles as mobile-enabled purchasing helps stitch together product discovery straight through to sales closure. Brands that leverage these emerging technologies will be the first to connect online and mobile product research to in-store purchase unlocking attribution data that we have only dreamed of as marketers. I intend and encourage you to watch this segment very closely as the early winners will help brands with a competitive selling advantage.

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