ECC Cologne and goetzpartners examine the requirements that German consumers have for mobile wallets

Cell phone instead of wallet and keys?

27. January 2014

One device for everything – With the help of mobile wallets it should be possible in the future to transfer the functions of wallets and key chains to smartphones via app. A new study by ECC Cologne and goetzpartners has revealed that mWallets could be especially popular among consumers when it comes to payment in stores. However, the study also shows that no solution with high success potential currently exists on the market, as major customer requirements have not yet been met.

Cologne, January 27, 2014 – Who hasn’t experienced standing at the cash register only to discover that they have forgotten their wallet or purse? With the help of mobile wallets, this scenario could soon be a thing of the past, as it will be possible to transfer payment functions to smartphones. The new study “Will mobile wallets help mPayment to achieve a break through? – Success strategies for market participants based on the latest consumer preferences” by ECC Cologne and goetzpartners reveals that consumers are very open to the concept. According to the study, around 23 percent of those surveyed already use preliminary apps to mWallets. Of those asked who do not yet use such apps, around 56 percent stated that they could imagine using an mWallet within the next two years. Over half of those interested would even be prepared to pay for the perfect mWallet. However, the study also shows that Germany is still a long way from realizing the vision of a full-service mWallet. Only partial solutions (such as PayPal or Apple) currently exist on the German market, with which data, such as boarding cards, customer cards or specific payment information, can be saved and managed.

The perfect mWallet – Customers particularly desire the means to pay in stores

When asking consumers about their perfect mWallet, it becomes obvious that payment is a particularly relevant topic. Payment with mobile wallets in stores tops the wish list – almost 78 percent of those interested in mWallets would gladly use this function. Payment in online shops or apps is also a high priority for 74.5 percent of those surveyed. Third place went to the storage and usage of cards, tickets, coupons and documents (67.2%). So-called loyalty functions, like couponing, customer and bonus cards, as well as club and membership cards, received an especially positive response. In contrast, only a few of those surveyed wanted their mWallet to include functions like login details, house and car keys. “The loyalty functions desired by customers also offer clear advantages for retailers. It allows them to get to know their customers better via the saved data, enabling more personalized offers to be developed,” explains Dr. Kai Hudetz, Managing Director of IFH Cologne.

Marcus Worbs, Partner at goetzpartners, believes: “Providers must ensure that the consumer can pay everywhere with an mWallet, and that the solution is secure against hacker attacks. In this way, providers can generate income and save on transaction costs.” Worbs believes, however, that such an mWallet can only be successfully established on the market as part of a partnership between financial service providers, telecommunications companies, retailers and technology providers.

Five success factors for mWallets

The study also reveals what providers must take into account in order to be successful with an mWallet on the market. To this end, five success criteria were identified:

Security and trust – Security concerns are currently the greatest hurdle for mWallets. When it comes to security, mWallets must at least ensure the same standards as traditional payment means (credit card, wire transfer). Moreover, these security standards also have to be communicated to consumers in a credible way in order to establish the necessary trust in the mWallet.

Ubiquitous usage – mWallets must extensively deployable both online and in retail stores.

Value-added services – mWallets must provide added value compared to conventional payment methods. In other words, providers should integrate additional offers into the mWallet - tailored to the respective target group - such as the storage of tickets, comparative pricing or retailer search.

Retail proposition – An mWallet should also provide clear added value for retail stores, in order to encourage them to upgrade their point-of-sale terminals for compatibility with the mWallet.

Competency and partner mix – Wide-ranging competencies are required for mWallets, something that can be effectively covered with clever partnerships and competency pooling - for instance, when it comes to payment know-how, coverage and innovativeness.