[Dave Birch] The phrase "top of wallet" is well-understood in the wacky world of card marketing. It means making your card the one that consumers reach for first when they open their wallets. There's real science to this in the cards world: there are very clever people who know exactly how much to spend and where (TV ads? Cashback? Rewards?) to force cards to top of wallet. And they've been very good at it, which is one of the reasons why retailers complain about card costs going up faster than their sales: one of the most effective ways to get top of wallet is rewards, and as consumers switch to use rewards cards (which are more expensive for the merchant – after all, some has to pay for the rewards) so costs rise.

I don't really understand marketing and brand, but I do occasionally find myself in meetings where these things are being discussed, so I hear "top of wallet" from time to time. These have left me wondering: what does "top of wallet" mean in a mobile environment?

The problem is that it may not be the consumer who is making the choice! So what if I can grab your attention with a clever and expensive advertisement for a credit card, if when you actually tap in-store, the retailer POS and the mobile wallet engage in their own negotiation to select the best payment instrument for a transaction? You can easily imagine how this might work: the wallet offers the default credit card, the POS asks for a debit card, the wallet declines, the POS offers double loyalty points for the debit card, the wallet accepts and the transaction proceeds without the consumer being involved in the decision at all.

You can already see the incipient problem. Consider, for example, the Wallaby card.

The Wallaby Card is connected to each of its users’ accounts and is able to select the best one to take advantage of discounts and rewards.

[From Digital wallet combines users’ credit cards and selects the best one | Springwise]

This is an example of what has come to be called "decoupled" payment where the card you use at POS does not necessarily belong to, in any sense, the payment instrument behind it. One particular subset of this genre, the decoupled debit card, looks particularly promising. I think there is evidence that both consumers and merchants like such cards.

They are decoupled in the sense that the merchant issuer is not the same entity that holds the cardholder’s funds. About 200,000 consumers carry the cards, which are mostly sponsored by petroleum marketers, though grocery stores will be going live on the platform soon

[From Untitled]

Totally decoupled debit cards wouldn't be issued by either the bank or the merchant. We're in the land of BYOT (bring-your-own-token) here. I caught this phrase from super smart Eve Maler ("@xmlgrrl"). She said

The category that quickly became my favorite was "bring-your-own-token." BYOT is Forrester's term for the various methods (sometimes called "tokenless") that leverage the devices, applications, and communications channels users already have.

[From Strong Authentication: Bring-Your-Own-Token Is Number Three With A Bullet | Forrester Blogs]

BYOT doesn't quite work for me. I was thinking about "MYTH" (MY THingy), because I can imagine a marketing campaign about "believe your own myth" or something like that. Anyway, why can't I just wave my thingy at the bank to link to my debit card or pre-paid or PingIt or O2 Wallet or whatever to it and then go and wave it a retailer to link it to my loyalty account. Then when I pop into buy something, I can just wave my thingy and be gone.

What that thingy might be is a matter of debate, but one form factor is certain to be the mobile phone and one application is certain to be the mobile wallet. So move the decoupling into a mobile environment where the "negotiation" around which payment instrument to use can be so much more sophisticated. Now as a consumer I might not only have no interest in getting into the loop — let my phone sort it out, I'm busy — but I may not even know that such a negotiation is under way. I've written about payments auctions before…

The idea is that, rather as advertising networks such as DoubleClick auction page impressions to advertisers in real-time (when you click on a page, the advertising network sends the details to advertisers who get 20 milliseconds to respond with a bid, and then the advertisement from the highest bidder is displayed) so when you click on “pay”, the payment platform might bundle together some facts about the transaction and auction them to processors.

[From Wallets, brokers and auctions]

…but this takes things to another level because of the interactive nature of the negotiations that might take place.  We're into one of my favourite realms, the world of unexpected consequences. Where the organisations behind my payment choices have to market to my wallet, not to me, and where the complex negotiation and selection of payment deals might happen at POS. I might want to set my wallet a general policy toward payments, but I shouldn't think I'd want to get involved in every one of them.

This is the sort of thing I imagine will be discussed at Inside Intelligence's conference on Mobile Wallet—Revolutionising the Customer Experience in London on September 27th 2012. The wonderful people at Inside Intelligence have given us a delegate place worth an astonishing EIGHT HUNDRED AND FORTY FIVE of your British Pounds to give away as a prize on the blog. So if you are going to be in London on 27th September and want to come along and meet a variety of experts (and me), then enter the competition! We're trying something different this time. All you have to do is make a non-spam comment on this post on the Tomorrow Transactions blog (don't e-mail me – that doesn't count). A week from today, we will close off comments and then make a random draw amongst commentators and the winner will receive the delegate place! 

This competition is void where prohibited, not open to employees and associates of Consult Hyperion or members of my extended family and no animals were harmed during its creation.

These are personal opinions and should not be misunderstood as representing the opinions of 
Consult Hyperion or any of its clients or suppliers


  1. Why do you care about any of this? What difference does it make to anybody but the wealthiest in society? Most of us are but clods in their turf-wars. What would you care about if banks couldn’t buy your attention?

    [Dave Birch] I want banks to buy my attention – I don’t want to give it away for free.

    P.S. We have a spam filter on the comments and sometimes it might take a while before we get time to check it, hence the delay on some days.

  2. I’m your most intelligent and most impassioned reader, Dave. Yet I get the impression that my last, competition entry comment was binned! Is payment technology to be tightly controlled by the banking hydra and its lackeys, or will you invite me to do a podcast episode on community currencies and low tech payment technologies?

    [Dave Birch] only one entry per contestant!

  3. Perhaps HMRC should get in there as top of wallet and pick up the tax at the same time – this isn’t so different from the plans to take income tax out on the way from employer to employee.

  4. A good test of the intelligent top of wallet “maximizer algorithim” would be to figure out the best way to pay for a Pizza Express meal – is it Wednesday so I can use an Orange 2-for-1 offer, Do I check-in and use the AMEX Foursquare promotion?, Pay with PayPal using the Pizza Express App or use some Voucher from vouchercode.co.uk ? or maybe use some combination?? Hey wait – do I want this sort of transactional relationship or should I go to the family run local Italian where Francesco the owner knows me, we can enjoy some banter and he occasionaly gives me a free drink after my meal.

  5. This reminds of a slightly torturous month spent in rural central Africa where bartering food one had farmed with one’s neighbours was a daily activity in order to get a balanced diet. You might have maize, a neighbour had vegetables, bartering was required for everyone to eat a half-decent meal. Emphasis on half-decent.

    The key point here is that kids would run round each day suggesting what each person would be prepared to barter, with what and at what rate.

    In other words, the opportunity informed the transaction.

    If the future mobile transaction environment is as flexible as Dave’s article suggests then the obvious next question is whether the decision for payment source selection at the point of sale is actually too late, a missed opportunity for engaging with targeted marketing.

    What this environment might benefit from is the digital equivalent of the pre-transaction runner, prompting the consumer into transactions that brings the ‘card’ to the top of the wallet.

  6. How about “credit auction” card (think of BillMeLater) whereby the payment is made via instant credit automagically chosen by my wallet from several competing issuers. In that case, my creditworthiness and KYC are established at a single location and is then shared with the winning issuer via TSM. The interchange fee picked up by the issuer represents good APR. Hm, should I have patented that?..

  7. There’s no one size fits all answer. The solution will need to reflect different consumer behaviours in terms of how involved a consumer wants to be. I would want to set the transaction parameters to a fairly granular level; my wife (strangely!) doesn’t get so excited about payments so would be happy to let the system decide.

  8. Perhaps, I am a luddite; but I am the sort of luddite that only just about manages to remember to use the same Oyster “token” to close my journey on the tube as the token that I used to open my journey twenty minutes before. Hence, superficially, there is quite a lot of me that would like to take away the hassle of fumbling in my wallet to find the appropriate card and for this whole process to be automated with some kind of mobile wallet. In your excellent blog post, you provide a lot of “food for thought” on how this might not be quite as simple as we first imagined.

    Back in the transit example, I might just about manage to avoid two cards getting “fined” for maximum journey fares by using a different card for entry as for exit. My human solution is to hold tightly onto the card that I actually used to tap in, rather than scrabbling for it on exit and possibly selecting the wrong card. However, I wonder how much extra money I am giving to TfL, as if I travel at the two ends of the day; I may well end up using two different Oyster cards and not benefiting from the daily fares cap. BTW I don’t clutch onto my Oyster card for the whole day !

    (N.B. You may well ask me, why do I even have two Oyster cards – behavioural economists would call it “anticipated regret”. We’ve all got caught out without having enough credit on an Oyster card and the gateline not letting you through, so my simple solution to avoid getting caught out whilst I might be rushing to an important time-critical meeting is to carry two Oyster cards as the chances of both having no credit is much smaller. You may well now ask me why I don’t auto-top-up my Oyster card, but that is another story again …)

    So bringing it all back to “top of wallet”, I think there is a lot to be said for convenience. However, there is also an awful lot of “devil in the detail” that still has got to be worked through on how the wallet is actually going to know what outcome its owner was intending to achieve. My caution is… “please include the human behavioural element in this discussion”. Whilst technology can enable a lot of things, this is not a technology problem; what we really need to work on is how do people interact with the technology and what is it that they’d really like it to achieve for them.

    Sure, superficially, no-one wants to be carrying around a bulging wallet of debit, credit and loyalty cards. But a far simpler answer is not to carry them at all and the behavioural economist would argue that we only get conned into doing that because, if we don’t carry around everyone’s loyalty card, we feel that we are losing out on something that was free. One of the quirks of behavioural economics is that we focus a lot more on what we may lose, as opposed to what we may gain. Thus, on one level, we’d love to put all of those cards into a virtual mobile wallet and feel that we gain the benefit of carrying them around without actually having to carry them around. But, then as Dave neatly articulates, who decides which one or which combination of cards we use in any one transaction ? Or, indeed when is that decision even taken ? Before, after or during the transaction ?

    Another tenet of behavioural economics is that there is no such thing as a level playing field. So the question is who do we let make that decision ? Practically, for some segments of the population, we probably begrudgingly accept that we can’t be bothered (although there are very different behavioural patterns in other social segments). However, we know we can’t trust the banks to have our best interests at heart. We know that the merchants have their own vested interests at heart. So, who can we trust ? This is the key and possibly only question.

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