Mobile Wallet as the next platform
Have you ever left a blog or article open in a tab for weeks, maybe even months, digesting it and trying to understand what it really means? The kind of blog that’s typically written by someone much smarter than you, and that challenges some of your base assumptions?
That was the case for me with Alex Rampell’s blog on mobile wallets. I must admit it took a mere mortal such as myself time to process, especially as the product I’m responsible for, Onefill, is directly in its cross hairs.
Let’s start dissecting the blog here, with the most erudite statement I’ve come across on why we’ve seen a rush to mobile wallets to date:
“As digital wallets increasingly become the origination point for consumer spending, they will become THE platform for downstream financial services”
He goes on to justify this by saying:
“One change in Apple’s product design — for example, something as simple as alphabetization, which a leather wallet doesn’t do! — could move Bank of America ahead of Capital One as a “default,” moving more purchases in that direction.”
In one fell swoop, the justification of why banks are pursuing mobile wallets makes sense. As an aside, we have watched with interest how one Australian bank, ANZ, broke from the rest of the leaders in opting for a deep integration with Apple Pay, while the others have chosen to develop their own mobile wallets. It will be interesting to see how this all plays out.
As Alex elaborates:
“Right now, LendingClub will take your 18% APR Chase/Citi/et al interest rate and refinance it down to 10%. But in a world where ApplePay controls the front, and existing banks like WellsFargo provide the source of funds at the end, there’s no reason not to “automate away” the credit selection process. Why wouldn’t they just skip right to the rate LendingClub would have given you, or even skip to the best “marketplace lending” rate?”
In other words, if banks aren’t providing a mobile wallet, there is a very real risk they won’t have a credit card business. This is good news for Onefill as we slot into and extend a bank’s mobile wallet to online transactions. By doing so, the bank provides a richer wallet experience as well as competing against the sub-pointers of PayPal and MasterPass/Visa Checkout. The CEO of PayPal is already talking about how….
“Mobile is fundamentally blurring the distinction between the online and offline worlds and putting all of the power of a bank branch in the palm of our consumers.”
If banks want to stay relevant and maintain any presence in their customers’ purchasing decisions, it seems a simple decision for banks to offer mobile wallets. And while they’re at it, build this presence even further by extending into online transactions through products like Onefill.
