Mobeewave Tells Us About the Challenges With Mobile Wallets

Posted 9/26/2016 12:00:50 PM by RICHARD HARRIS, Executive Editor

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.

ADM: How does your technology work?

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.

ADM: Why did you choose to target P2P and micro-merchant technology? What is the market need?

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.

ADM: What are the current challenges with mobile payments/wallets today?

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.

ADM: How is Mobeewave combating these challenges?

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. 

ADM: Why haven’t mobile payments become the new norm? Why is the US so far behind in implementation?

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. 

ADM: Why is implementing P2P and payment acceptance technology in mobile wallets so important?

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.

Vincent Alimi
Vincent Alimi has been working in the NFC mobile payment industry for more than 12 years. Responsible for product and innovation at Mobeewave, he has specialist expertise in mobile ecosystems, mobile architecture, EMV, payment systems, mPOS architecture and ecosystems, embedded applications, as well as contact, contactless and mobile payment. 
Since joining Mobeewave in 2013, Vincent has served as Chief Technology Officer – Payment and MFC mPOS Ecosystem Expert. He previously worked as a Research Engineer – Coordinator of the NFC Research Activities at GREYC and as NFC Mobile Payment Software Architect at INSIDE Secure.

In 2012, he earned a PhD in Computer Science from the University of Caen, which focused on mobile services and transaction security. He also has a master's degree from the ENSICAEN and was awarded magna cum laude for his bachelor's degree in telecommunications and networking. As an expert in NFC technology and transactions security, he has been published several times in academic and industry journals.

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About the author: RICHARD HARRIS, Executive Editor

As the Publisher and Editor for App Developer Magazine, Richard has several industry recognitions and endorsements from tech companies such as Microsoft, Apple and Google for accomplishments in the mobile market. He was part of the early Google AFMA program, and also involved in the foundation of Google TV. He has been developing for mobile since 2003 and serves as CEO of Moonbeam Development, a mobile app company with 200 published titles in various markets throughout the world. Richard is also the founder of LunarAds, a mobile cross-promotion and self-serv mediation network for developers. He has been a featured presenter at trade-shows and conferences, and stays active with new projects relating to mobile development.

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