Wallet Providers Tussle over $4 Trillion U.S. Retail Market
San Francisco, CA, November 3, 2014: The October release of Apple Pay shook up the mobile wallet market, sending current and forthcoming wallet providers back to the drawing board to retool their strategies. While consumers prefer their primary banks and credit unions for a mobile wallet provider overall, top brands PayPal, Google and Apple are closing the gap. Javelin Strategy & Research’s report, Mobile Wallets Analysis and Strategy: How the Game Changes With Apple Pay, advises financial institutions, technology companies and merchants where to invest in the increasingly competitive wallet market.
The proportion of consumers using their mobile phones to buy physical goods more than tripled over the past five years, demonstrating growing consumer confidence in mobile purchasing. Apple controls 44% of U.S. smartphone market and has negotiated agreements with Visa, MasterCard and American Express, and issuers controlling over 84% of the primary credit card market. However, retailers such as CVS and Rite-Aid shut off Apple Pay because of their competing venture MCX CurrentC. MCX controls cash registers that ring in one-fourth of the total U.S. consumer spend. As mobile purchasing desire ignites, the focus on defensive plays needs to remain secondary to providing a superior checkout experience.
“Apple Pay offers customer convenience combined with better security and Touch ID authentication, but it doesn’t address the Android ecosystem” explained Mary Monahan, Director of Mobile at Javelin Strategy & Research. “The wallet space is still very much up for grabs by players including the customer’s own financial institution, PayPal, Google Wallet, and others.”
The Javelin Strategy & Research report Mobile Wallets Analysis and Strategy: How the Game Changes With Apple Pay, not only dissects the Apple Pay model but also assesses strengths, weaknesses, opportunities and threats of the top 10 wallets.
The report profiles 16 wallet models including those of American Express, Apple, CU Wallet, Facebook, Google, Loop, MasterCard, MCX (Merchant Customer Exchange), Microsoft, Paydiant, PayPal, Starbucks, Softcard (formerly Isis), Stripe, Square, and Visa.
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About Javelin Strategy & Research
Javelin Strategy & Research, a Greenwich Associates LLC company, provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. Javelin’s independent insights result from a uniquely rigorous three-dimensional research process that assesses customers, providers, and the transactions ecosystem.