Cellum Insights

Why the “mobile wallet wars” will never have a clear winner

On Monday, PYMNTS.com featured a long and hard-hitting piece by CEO Karen Webster under the suitably provocative headline “Who won’t win the mobile wallet ‘wars’ and why.”

Traffic sign for Winners or Losers - business conceptWe won’t steal Karen’s thunder by listing all of the firms and products she thinks will end up losing the battle for supremacy in the mobile wallet and payment space. Suffice to say that she shares our view that Apple Pay won’t end up the undisputed master. (And note that we put down on paper our prediction that the mobile payments market isn’t Apple’s for the asking months before the service even launched.)

Whether her piece actually offers what she calls “an entirely new way to look at these mobile wallet warriors” is arguable. But it’s hard to find fault with the bottom line of her thesis, namely that no one wallet can truly “win” unless they are able to serve all or at least a very large slice of mobile users:

To even remotely stand a chance of winning the “war,” a mobile wallet can’t be captive to just one mobile operating system or device and the set of customers that that particular operating system has gotten on board its platform – and then the subset of those consumers who have decided to download and activate its wallet.

More debatable is the simple notion that there was ever a chance that a firm could “win” the mobile payment space in a way comparable to how Google has “won” search or, to a lesser extent, Facebook has become synonymous with social networks. This, of course, is not to say that there won’t be winners and losers, some coming from surprising places. (One commentator on the article intriguingly argued that the big winner will actually be at the settlement layer of the payment stack, rather than the customer-facing level.) But if only because of anti-trust considerations, it is inconceivable that a single company could end up enjoying dominance over any area of such a crucial emerging area of global finance.

Meanwhile, as is often the case with IT and finance, value created by the growth of mobile payments is likely to be much more evenly distributed, with the biggest winners collectively being the mass of end-users, merchants, banks and others who can adopt only those aspects of mobile payments technology they are pretty sure will offer them concrete benefits. This is why a better analogy for what is happening in the mobile wallet space may not be war at all, but “revolution,” for in a revolution the only guaranteed losers are those who benefited from old ways of doing business that have suddenly been swept away.