Mobeewave Tells Us About the Challenges With Mobile Wallets

Mobeewave is a Montreal-based FinTech company that has developed a patented technology that will enable banks around the world to capitalize on the market for cash-in-hand transactions. Their game-changing payment acceptance platform facilitates in-person, proximity mobile payments and is available as a white label platform-as-a-service (PaaS) technology for the banking industry. We visited with Vincent Alimi, Vice-President, Product & Innovation to discuss their technology, and the current challenges with mobile wallets.

Alimi: Our technology makes it possible to collect money, in person, from anyone at any time, using your phone. Harnessing a smartphone’s NFC capability and secure element it allows people to safely accept money from a contactless card or mobile wallet with a single tap.

This innovative mobile solution ensures sensitive information related to a transaction is encrypted in a device’s hardware and software security.

Alimi: We recognized that there is a space in the payment landscape not served by digital solutions: the untapped market segment of cash-in-hand transactions.

Made up of both consumer-to-business (C2B) and consumer-to-consumer (C2C) transactions, these payments can cover anything from service providers – like yoga teachers, gardeners and tutors – getting paid to people selling belongings at garage sales or on craigslist. They can also include payments outside of buyer-seller transactions: actions like collecting donations for charities or paying back friends and family.

In most cases, these kinds of payments aren’t best served by existing solutions. For example, closed-loop P2P services like Venmo and Facebook Messenger aren’t practical if you’re hoping to transfer money to someone you’re not connected to socially. By the same token, mPOS solutions are not appropriate for micro- or nano-merchants who don’t want to deal with the expense or inconvenience of a cumbersome hardware solution.

For these reasons, we have created an in-person, proximity money collection solution that enables individuals to offer a digital alternative to cash-in-hand transactions using just their smartphone.

Alimi: Mobile wallets are struggling to attract active users – people who embrace the technology and make it part of their lives by using it to carryout multiple transactions each day. And their failure to entice significant numbers of these users boils down to one thing: a lack of value.

The three main mobile ‘Pays’ – Android Pay, Apple Pay and Samsung Pay – aren’t attracting active users and are seeing lower numbers when it comes to frequency of use. According to Javelin Strategy and Research the absence of significant consumer value has constrained the adoption of these mobile wallets for in-store purchases, with just 5% using Android Pay in the past month in 2016, 8% using Apple Pay and 3% using Samsung Pay.

The truth is without a real added value these mobile wallets don’t offer a compelling enough reason for a consumer to use them to pay with instead of a credit card.

Alimi: By integrating our technology into a mobile wallet or payment app, mobile payment solution providers can offer users value beyond consumer-retailer transactions. It would increase the number of times a person would use their mobile wallet to also include occasions when they need to get paid. By helping to ensure such mobile payment solutions are used more frequently, our technology can provide a means to attract a greater number of active users of mobile wallets. 

Alimi: There’s a combination of factors that have impacted the adoption of mobile payments. Firstly, the payment landscape in the US, while shifting towards contactless payment, is still for the most part incompatible with mobile payment options. Taking the example of Apple Pay, 3 million retail locations in the US now accept the mobile wallet. But that number appears less significant when you consider that there are roughly 13 million POS terminals across the country. Overall, the infrastructure isn’t really there yet to support mobile wallets.

At the same time, as a technological solution, mobile wallets that only allow you to pay aren’t a strong enough motivation for the average user to dispense with their existing payment options. In comparison to other innovations, these mobile payment solutions do not solve a real need for a significant number of users. In essence they simply provide an alternative to credit and debit cards – an alternative that is yet to become as widely accepted as those established payment options. 

  

Alimi: It’s important for a couple of reasons. Firstly, it will offer a genuine added value to the user, which will in turn drive the adoption of mobile wallets. And secondly, it will provide the last link in the digital payment chain, delivering a mobile solution to cash-in-hand transactions. By doing so, it will complete the loop between digital, physical, personal and commercial payment.