Coming soon to a pocket near you
Three or four types of things go into a wallet, observes, Almis Ledas, chief operating officer for EnStream, a Bell, TELUS and Rogers joint venture centred around the launch of the mobile wallet. Ledas checks off the contents of a typical bill fold: cash money, payment cards (credit and debit cards) and identity credentials, such as your driver’s license and health cards. “The average Canadian has from 15 to 20 credentials in their wallets today,” says Ledas. The fourth category, he says, is coupons, vouchers and ‘near’ money (like Canadian Tire bills). All of these concrete items can be digitized and stored on your cell phone, and can be allowed, with a tap of your phone on a receiver, to communicate with retailers and financial institutions and others. Voila! a mobile wallet.
“In your phone” Ledas predicts, “you’ll have your security credentials for work. Any clubs you belong to, you’ll have your club memberships and parking passes in your phone. You’ll have your credit cards and you’ll have your bank card. Grocery coupons that now arrive at your door will arrive by e-mail instead. When you go to pay, your phone will know what you have and will apply them to reduce your payment.
As Starbucks coffee aficionados will know, the mWallet is already here, but not quite all here. “I could hardly believe it,” says Berkeley Scott, Vancouver based vice-president of digital media for the market research firm TNS. The 41 year-old Scott had just discovered that his 67 year old father was happily paying for his chai tea latte with his mobile phone, equipped with a Starbucks app. “I’m not sure if I’m more surprised that he drinks chai lattes, or that he’s an early adopter of the technology,” Scott laughs.
One retailer, one app: it’s a small step. The giant leap is imminent, says Scott: “People tend to think of it now as only settling payments with your phone using near frequency devices. It’s not just that. It’s a vast, vast number of apps, or processes that you can download and have on your phone to aid your daily life. The prospect is fantastic.”
Doug Macdonald, a senior manager at the consulting firm Deloitte in Toronto, says the numbers augur well. “Right now we’re looking at about 26 million mobile phones in the Canadian market,” he says. “Deloitte estimates that half of those are smart phones, and 10% of all phones have NFC. We expect the total number of phones to hit 30 million by 2015, and 70% of that total will have NFC (based on the rather big assumption that Apple will eventually add NFC to their devices).” That’s a lot of potential mWallets, he observes.
The mWallet concept is in a pilot phase now in Canada. While EnStream addresses near field communication technology, Rogers and CIBC announced in May that they had teamed up in a joint venture to pursue the mWallet idea, and RBC announced in October that they too were on the track of a workable mobile wallet and hope to be ready for a commercial launch within the next few months.”
Dr. John Pliniussen, resident expert in Innovation, Sales Management and eMarketing at Queen’s University’s School of Business thinks it might take a little longer for the mWallet to take off. “We’re a small country population wise, vast geographically, we have a conservative attitude toward business, and we don’t have the market forces at work that Japan, or the US, or even Scandinavia has. It’s not in our DNA. Consumer pull is marginal. I’ve never heard anybody demand it. There’s still a lot of people that go into Starbucks and simply don’t use the feature. Don’t get me wrong. The mobile wallet is coming, but not right away. I’d predict that credit cards won’t be obsolete until 2020 or later.”
You’ll have your credit cards and you’ll have your bank card. Grocery coupons that now arrive at your door will arrive by e-mail instead. When you go to pay, your phone will know what you have and will apply them to reduce your payment.
Almis Ledas, Chief Operating Officer, EnStream