Mobile Wallets Using Your Smartphone for Brick- and-Mortar Payment.
Mobile Wallets Research and Analysis
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Transcript of Mobile Wallets Research and Analysis
© 2016 NTT DATA, Inc.
Mobile Wallets Research and AnalysisMay 2016
© 2016 NTT DATA, Inc. 2
What is a Mobile Wallet?
A mobile wallet is an “app” on a consumer’s smartphone that allows them to purchase goods or services at a minimum
of one Point of Scale merchant location
© 2016 NTT DATA, Inc. 3
100+POS transactions were
performed by participants at more than 19 different merchants
Mobile Market Study Overview
Prior to this study, only a small percentage of our participants were utilizing a mobile wallet.
75%Had never registered or used a
mobile wallet of any type.
DE | NC | FL | OH | TX | CT | GA
Testing was conducted across 7 Geographic areas
18+ Financial Institution/Financial
Product/Payment Networks were used
Issued by top 10 credit and debit issuers
90% Participants used a variety of POS enabled Apple, Andriod, or Samsung devices spanning two
Operating systems*(iOS 7+ and KitKat 4.4+)
11active participants were
involved in our study
*A Windows phone was initially also included in our study, unfortunately, none of the wallets in scope support Windows compatible wallet.
© 2016 NTT DATA, Inc. 4
*Note: Indicates only partially tested due to provider constraints
Mobile Wallet Inclusion CriteriaNTT DATA evaluated a representative sample of 30+ Mobile Payment Applications for inclusion in our study.
MOBILE SELECTION CRITERIA
Mobile Wallet Sector Category Study Scope Not POS Capable Pending Market Launch
Accepting Location Not Found
Lacked Wallet Conditions
Apple Pay Digital Provider IN MC PayPass Card Association IN XPay Pal app Tech Titan IN
Level Up Tech Titan IN VS PayWave Card Association IN XSamsung Pay Digital Provider IN Android Pay Digital Provider IN Walmart Pay Merchant OUT X Chase Pay Financial Institution OUT X Current C Tech Titan IN
Capital One Financial Institution IN* XDunkin Donuts Merchant IN
Starbucks Merchant IN Burger King Merchant IN
Target Merchant OUT X Payapp Wallet Tech Titan IN* X
Tabbedout Tech Titan IN FreeBeePay Tech Titan OUT X
CorPay Tech Titan OUT X
Mobile Selection Criteria
Must be accepted at a minimum of
one merchant
Compatible with at least one smartphone device?
Must be able to complete a
point-of-scale transaction
If only one merchant, must either be:Top 50 Retailer
More than 2,500 retail locations
Support 1+ funding sources
‘in wallet’
© 2016 NTT DATA, Inc. 5
We evaluated a representative
sample of 12 Mobile
Wallets covering a variety of
sectors
Digital Providers
Financial Institutions
MerchantsTech Titans
EVALUTAION CRITERIA
User Experience Payment Capability
Device Capability
Ease of Set Up
Ease of Use
Rewards/Loyalty
Merchant Acceptance
Transaction Range
Supported Funding Types
Checkout Experience
Mobile Wallet Evaluation CriteriaDimensions and Data for scoring wallets within each category.
© 2016 NTT DATA, Inc. 6
Starbucks and Paypal lead due
to device compatibility and Use features.
Digital Provider wallets were stand outs in ease
and security in Set Up and Use.
Lower scoring wallets were impacted by poor merchant acceptance
and less intuitiveset up.
Tech Titans received high ranks for offering
merchant partners’ coupons or discounts
to incent use.
Burger King’s app was very difficult to
understand; negatively impacting it’s overall
User Experience score.
User Experience Rankings Across Provider CategoriesDevice Compatibility, Ease of Set Up, Ease of Use, Rewards/Loyalty
0
5
10
15
20
25
30
35St
arbu
cks
PayP
al
And
roid
Pay
App
le P
ay
Sam
sung
Pay
Cur
rent
C
Cap
ital O
ne
Dun
kin
Don
uts
Lev
el U
p
Tab
bed
Out
Bur
ger
Kin
g
PayA
pp
© 2016 NTT DATA, Inc. 7
Wallets scoring higher were favored across
merchant acceptance, funding, and
checkout experience.
Without the exception of
Starbucks, merchant wallets ranks were
lower due to inconsistent acceptance
across merchant locations, limited
transaction types, and low security.
Burger King ranked low due to restrictive funding
channels; PayPal or BK gift card only.
Samsung Pay fell slightly short for not
accepting on Card Network and
unidentifiable at Point of Sale as accepted form of payment, as
our testers experiences some failures.
Tech titans were competitive in checkout experience but ranked
lower for merchant acceptance, transaction
types and funding restrictions
Payment Capability Rankings Across Provider CategoriesMerchant Acceptance, Transaction Range, Funding Types, Checkout Experience
0
5
10
15
20
25A
ndro
id P
ay
App
le P
ay
PayP
al
Sam
sung
Pay
Star
buck
s
Tabb
ed O
ut
Cur
rent
C
Dun
kin
Don
uts
Cap
ital O
ne
Leve
l Up
Bur
ger
App
le P
ay
© 2016 NTT DATA, Inc. 8
Current State of Mobile Wallets
LOW HIGH
HIG
H
Consumer Experience
Mob
ile P
aym
ent C
apab
ilitie
s
LEVELUP
© 2016 NTT DATA, Inc. 9
Pros and Cons for all ProvidersC
ons
Pros
Digital Providers Merchants Tech Titans
• Direct relationship with Financial Issuer
• Wallet application on device by default
• Device security is shared with wallet
• Directly funded from existing accounts
• Rich rewards and coupons
• Pre-ordering capabilities
• Employee Knowledgeable (aware)
• Compatible with device wallets for easy access
• Device agnostic• Subscribed merchants;
better working knowledge
• Richer features/functionality offered
• Trusted security• Ties to existing
reward programs• Offers locator
services/alerts and storage/payment with some gift cards
• Limited to certain financial institutions
• Lack of rewards/loyalty redemption
• Limited to certain device types
• Subject to their technology platforms
• Limited to one merchant
• Low security • Fund restrictions (e.g.
pre-funding, increments, PayPal)
• Limited merchants and types
• Specific to Geographic locations
• Low security• Limited App support
• Limitations to credit/debit card through single FI; must be a customer
• Full capability limited to Android device only
• Multiple mobile platforms (banking vs. wallet)
Financial Institutions
Apple Pay, Samsung Pay, Andriod Pay
Starbucks, Dunkin Donuts, Burger King
PayPal, LevelUp, Tabbed Out, Current C, PayApp Capital One Pay
© 2016 NTT DATA, Inc. 10
Appendix
© 2016 NTT DATA, Inc. 11
Mobile Wallet Rankings – Merchants and FI
Wallet Provider
Overall Rank
Overall User Experience
Device Co
mpatibili
ty
Ease
Set Up
Ease of Use
Rewards /
Loyalty
Overall
Payment
Experience
Merchant
Acceptance
Transactio
n Range
Type
Funds
Supported
Checkout
Experience
Summary
48 32 9 7 11 5 16 3 2 4 7
Strong rewards tie and consistent merchant experience across all locations. Preordering, accept Apple Pay as funding channel and compatible with apple wallet for
expedited purchasing, and partner marketing. However, if not regular customer, little incentive to re-use.
37 25 9 8 7 1 12 2 1 2 7
Full functionality requires Android device & Capital One product; partially tested. Open loop, limited funding
acceptance. High marks for security, location, and notification features. Use search capability to store & pay with various
merchant gift cards.
35 23 7 5 8 3 12 3 2 3 4
Closed loop, location services, but inconsistent acceptance across merchant locations. Linked to rewards /loyalty
program, ability to send gift card. Integrates with Apple Wallet for expedited POS access. Low functionality compared to
competitor merchant wallet.
25 15 6 4 4 1 10 3 1 2 4
Closed loop with very restrictive funding options, requires PayPal account set up, Offers in store coupons, but no rewards. App not intuitive, location services supported,
however, unclear and inconsistent location acceptance. Poor employee knowledge.
© 2016 NTT DATA, Inc. 12
Mobile Wallet Rankings – Tech Titans
Wallet Provider
Overall
Rank
Overall User
Experience
Device Compatibility
Ease
Set Up
Ease of Use
Rewards / Loyalty
Overall Payme
nt Experience
Merchant
Acceptanc
e
Transactio
n Range
Type
Funds
Supported
Checkout
Experience
Summary
50 28 8 7 11 2 22 5 4 4 9
Open looped, sizeable merchant footprint, works across more transaction types. High marks for wallet security, transaction history and accepted funding. Detailed set up and requires PayPal account and prefunding. Has functions for merchant
locator, pre-ordering, and loyalty card searching, storage, and redemption. Exceptional employee knowledge where accepted.
39 25 7 5 8 5 14 4 1 2 7
Still emerging. Open loop, POS wallet only. Facilitates merchant partnerships for acceptance; lack of employee education. Restrictive funding sources; lacks trusted security. Offers
merchant partnering merchant coupons or discounts.
36 21 6 6 8 1 15 4 1 3 7
Open loop, no prefunding, specific to bars/restaurants. Limited merchant footprint; location specific. More local restaurants
versus chains. High marks for employee education and ease of use. Features include tipping, pay at the table or
after leaving, splitting the tab with others.
Level Up 32 22 8 4 8 2 10 3 1 2 4
Open loop, POS only, limited merchant footprint locator service required. Good marks for funding accepted and
device compatibility. Offers wallet lock and supports transaction history. Low marks for set up security and
monthly billing process and spend limits.
PayApp 12 10 2 5 3 0 2 0 0 2 0 Unable to complete set up and fully test due to wallet provider technical constraints
© 2016 NTT DATA, Inc. 13
Mobile Wallet Rankings – Digital Providers
Wallet Provider
Overall Rank
Overall User Experience
Device Compatibility
Ease
Set Up
Ease of Use
Rewards /
Loyalty
Overall
Payment
Experience
Merchant
Acceptanc
e
Transactio
n Range
Type
Funds
Supported
Checkout
Experience
Summary
51 28 5 10 10 3 23 5 2 4 12
Open Loop; broader device compatibility, large POS merchant footprint, across geographic locations; low In app presence. High
marks for accepted funding. Easy set up, portable from Google Wallet. Excellent set up and transacting security; with itemized transaction history. High marks for loyalty & gift card features.
NFC capability expedites POS.
49 27 6 10 9 2 22 5 2 4 11
Open Loop, limited device compatibility but more device types, app native to devices. Largest POS and In-App merchant footprint across all geographic locations. High marks for accepted funding. Excellent market presence and brand
awareness @ checkout. Top rated for set up and use security; transaction history supported. NFC capability and transaction
default settings expedite checkout @ POS and In-App. Limited reward storage, lacks rewards/ loyalty card features/functions.
ng Pay 43 26 4 11 9 2 17 4 2 2 9
Open Loop, limited device compatibility, NFC/MST capable to broaden merchant acceptance to however low brand awareness
@ POS and failures were still experienced. Easy set up and access through home screen. High ranks for security, although users reported biometric issues. Wallet app not pre-loaded on device; requires download and separate set up. Inconsistent
support of transaction history. No differential in checkout experience.
© 2016 NTT DATA, Inc. 14
Evaluation Criteria Definitions and Scoring Levels
Device Compatibility Ease of Set Up Ease of Use Rewards/Loyalty
Ability to work with multiple device providers (e.g. iPhone, Android,
Windows, Samsung) and Device Type
Easy Customer Set Up / Intuitive Interface, secures data, requires minimal
time, and entry shortcuts.
Intuitive Interface, Easy access, Locations accepted, help/tutorials and
Expedited Purchasing
Rewards accrual /redemption supports loyalty cards, and partner
loyalty/offer/marketing features/functions.
Not compatible with any major device provider Not able to set-up Not able to use. No Rewards or Loyalty
Compatible with only 1 major device provider
Difficult interface, lengthy set up, multiple apps required, limited entry
options, supports wallet lock only
Difficult to access at POS, not intuitive and no merchant locator services,
worsened purchase timing
Stores 1 Loyalty / Rewards , no link or features
Compatible with at least 1 major device and smart phone only
Difficult interface, quick set up, limited entry options, offers wallet password and wallet sends notification to ‘out of
wallet’ channel
Intuitive interface, easy access, offers location service, some in app tutorials,
purchasing inconsistently expeditedStores 1+ Loyalty / rewards Cards no
links thru wallet, no feature/function
Compatible with 1+ major device provider and 1+ POS smart phone only
Easy intuitive interface, 1+ entry shortcuts, minimal time, offers wallet
password/PIN, wallet sends notification in ‘out of wallet’ channel; requires
confirmation
Intuitive interface, easy access, no tutorial or location service, but accessible
on internet accessible, purchasing consistently expedited
Stores 1 Loyalty/Rewards, access/redeem links thru wallet
Compatible with 1+ major device provider 1+ POS smart phone and other
device type
Easy intuitive interface, 1+ entry shortcuts, minimal time, requires wallet password/PIN and ‘Issuer’ notification in
other channel , requires confirmation
Intuitive interface, easy access, support merchant location service and
help/tutorials, purchasing consistently expedited.
Stores 1 or more Loyalty/Rewards, can access/redeem links thru wallet, 1
feature/function
User Experience
© 2016 NTT DATA, Inc. 15
Evaluation Criteria Definitions and Scoring Levels
Merchant Acceptance Transaction Range Fund Types Supported Checkout Experience
Number/types of accepting merchants, consistent acceptance, identifiable as form of payment accessibility across
geographic locations
Range of Transaction Types supported in wallet
Funding options supported minus any restrictions, e.g. Issuer, Card
Association, Spend limits, Transaction fees
Calculated scoring based on expedited purchasing, employee knowledge,
identified form of payment, transaction history, and security
Not accepted at POS n/a No funding optionsLengthen purchasing, no employee knowledge, identified payment, or
transaction history
Unrecognized, limited merchants, hard to find in most geographic reasons POS Only 1 channel
(Credit only)
No change in purchasing, lacks knowledge, identified form of payment, or
transaction history
1 Merchant or Merchant type, inconsistent location acceptance, no In-App, limited access based on location
POS + 1 (e.g. In-App) 2 channels
(e.g. Credit, Debit)
No change in purchasing, lacked 2 amongst knowledge, identified form of
payment, or transaction history
1 Merchant or Merchant type, or variety, consistent location acceptance, some In-
App, location based
POS + 2(e.g. In-App, P2P)
3 channels(e.g. Credit, PayPal, gift card)
Expedited purchase, lacked 1 amongst knowledge, identified form of payment, or
transaction history
Variety of merchant types, POS and In-App, consistence acceptance, across
geographic locationPOS + 3+
4+ channels(e.g. Google Wallet, Debit, Bank
account)
Expedited purchase, knowledgeable employee, recognized form of payment,
and Transaction history
Payment Experience
© 2016 NTT DATA, Inc. 16
Full Mobile Wallet ListingMobile
Category Name Device specific
Issuer Specific
Association Specific
Transaction Range
Merchant / Location Specific
Funding Sources Terminal Type Addt'l
CostDigital Payment 1 Apple Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App Credit, Debit NFC
Card Association 2 MasterCard PayPass No Yes NFC
Digital Payment 3 Pay Pal app No Online, P2P, POS Digitaldebit/credit
card has 2.9% transaction fee
Digital Payment 4 Level Up No No P2P, POS Digital, NFC, QR Code
Card Association 5 Visa Pay Wave Yes VS Online, POS?
Digital Payment 6 Samsung Pay Yes MC, VS, AMEX Online, POS, InApp Debit, Credit NFC, HCE, MST
Digital Payment 7 Android Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App NFC
Merchant 8 Walmart Pay No No No POS, online Select Walmarts credit, debit, pre-paid or Walmart gift card QR Code
Financial Institution 9 Chase Pay No Yes - Chase only POS, online, In-App Chase Debit/Credit QR Code
Digital Payment 10 Current C No Columbus, OH only
Financial Institution 11 Capital One Yes Yes MC, VS NFC
Merchant 12 Dunkin Donuts No
Merchant 13 Starbucks No No No Online, POS, P2P
Merchant 14 Burger King Merchant 15 Target No
Digital Payment 16 PayApp Wallet No No POS Credit, Debit QR code
Digital Payment 17 TabbedOut no no no no
Digital Payment 18 Freebee Pay Yes No POS Yes credit, debit, or PayPal Barcode Scan
Digital Payment 19 Corfire - CorPay No No No
including closed-loop/open-loop gift cards, credit, debit,
prepaid, and companion payment
cards
NFC or Non NFC
Contact Us
NTT DATA Consulting, Inc. 704.936.1600 | [email protected]/usconsulting@NTTDConsulting | LinkedIn: /NTTDATAConsulting
17
Prepared by Peter Olynick | Senior Practice LeadRetail [email protected]