How will Electronic Wallets Evolve in 2013?

Posted on January 10, 2013

Many of us dream of not having to carry around a big fat wallet full of seldom-used cards, coupons and even some cash. The one thing we do want to carry around with us is our smartphone, so wouldn’t it be great if we could combine the two?

Yes, the smart electronic wallet has been talked about for years. There has been chips in debit cards to allow e-cash purchases (failed), there has been near-field communications (NFC) chips added to smartphones to enable purchases (not in common use) and there has been Apple’ Passbook launched in 2012.

So are we any nearer the nirvana of being able to ditch the traditional wallet? It’s unlikely to happen in 2013, but slowly and surely we are inching towards that goal.

Near Field Communication a Cul-de-Sac Technology?

The accepted wisdom was that NFC would enable smart wallets to become a reality. But the major shortcoming of NFC is that you need a terminal system in every retail store. Moreover, for an NFC system to be viable, all those terminals need to speak the same language.

In Japan, this has been achieved where the phone operators got together with the train companies to introduce a common standard. There adoption has been good.

Yet in the US no such standard seems to be emerging and NFC appears to be limited to niche applications. Moreover, Apple has not deigned to include this technology in their phones.

2013 – the year of the Virtual Card?

Apple’s recently launched Passbook system appears to be gaining momentum, with many companies such as Starbucks implementing it as a payment system. Passbook has the advantage of working with current Point of Sale systems so only a software update is required. This makes it much easier to rollout software and changes to integrate the service.

Expect companies therefore to implement giftcards, storecards and payment cards in 2013; especially as part of a trial programme to see how users adopt them.

What Should Businesses Do in 2013?

Follow the trends and plan to introduce a trial of passbook features into the market place for iOS users. Learn how much they are used, what data can be gleaned from it and how this can be used to improve relationships with customers.