[Dave Birch] I gave a talk about digital wallets yesterday. And once again I tried to encourage the assembled delegates (from the banking sector) to develop serious wallet strategies based on a winning narrative: that is, not the narrative of emulation of physical wallets but the narrative of their obsolescence. In other words, a strategy that is based on doing something so much better than making an electronic version of our existing wallets. Better, as this recent piece by Karen Webster notes, means better for all the stakeholders.

I happen to think that the further we move away from thinking that we have to replicate our physical wallets on line and the closer we move to using the mobile device to reinvent the shopping experience in new ways, the more likely it is we will see a digital wallet vision materialize that all stakeholders can wrap their arms around relatively soon.

[From Commentary – Two Years And Five Insights Later… | PYMNTS.com]

Karen is absolutely spot on with this. This is why I am so keen on the “hyper wallet” thinking that I’ve written about here before and shared with clients over the last couple of years.

A hyper wallet doesn’t try and simulate a physical wallet: it meet the requirements for a wallet in the modern, online world. It doesn’t emulate the leather wallet, it blows the leather wallet away.

[From Wallets, mobile wallets and hyper wallets]

It’s a diversion from my main point (which follows) but the critical characteristic of a digital wallet that is sitting in a mobile phone is that it is connected all the time, and it is not only connected to banks and retailers but (and here is where the fun starts because we don’t know where it is going to take us) to other wallets. Wallets are part of the internet of things and (skating to where the puck will be, as our Canuck cousins often say) bank strategies should be forming around facilitating and exploiting that interconnection. If they want to stay in the payments business, that is. They could of course be content to adopt the strategy of becoming operationally efficient pipes to value-added services operators. I kind of think they have to pick one or the other, because digital wallets in mobile phones are an absolute inevitability.

According to the study, a large majority (83 percent) of respondents said they don’t want to have to carry a wallet and would prefer a digital payment method.

[From The wallet is doomed! | MobilePaymentsToday.com]

Now, I’m not one to pay any attention to the general public on any topic at all, but I can understand this exactly. I find it rather convenient to have everything in my phone, but when everything in my phone is properly interconnected I will find it compelling. What stops this from happening right now? Well, quite a few things. But one of the more important is that we lack identity and authentication tools to make it all work in a practical and convenient way and these really should be one of the focus areas for stakeholders hoping to make progress. I’ve no idea which strategy is most appropriate (e.g., the “front end” integration of a V.Me or the “back end” integration of a Braintree), but I do know that shaping this strategy is, in many ways, shaping the mobile commerce business models of a great many players.

This is the sort of thing that will be discussed at the Mobile Wallet and Retail Innovation conference in London on 18th-19th June. I’m going to be chairing on the 18th, so I hope you’ll come along and join the conversation. I am happy to be able to report that the magnificent people at Informa have given me a conference pass worth ONE THOUSAND THREE HUNDRED of your Earth pounds to award on this blog as prize in one of our popular blog competitions. So if you’ve going to be in London on 18th and 18th of June and you’d like to come along to the Mobile Wallet and Retail Innovation conference, all you have to do is reply to this post using the comment box below with the name of the noted French goalkeeper who once said “It’s a kind of spiritual snobbery that makes people think they can be happy without money”. Good luck. There will be a genuine random draw between all correct entries on Monday 10th June 2013. The competition is open to all except for members of my immediate family, employees or associates of Consult Hyperion and squad members of the Racing Universitaire Algerios U21 first team.

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


  1. I agree it isn’t a digital version of the physical wallet, but to develop the digital one we need to deeply understand the physical wallet usage and purpose. A digital wallet that only focus on money transactions and loyalty will not replace the physical one, since people will still need a container to carry driver’s license, ID cards, medical cards, library cards, etc…A curious semantic idea: it seems the main role of the wallet today is to carry cards that identify and connect us to institutions (bank, gym, work, government, medical, transport). All these institutions use numbers to identify us in their data systems. Therefore we could say that the physical wallet is already a digital wallet because it connect us to institutions through digits. The cards are just a materialization of these digits (with identification/ authentication technology). The answer is Albert Camus.

  2. Hi. It’s Dave’s lovely assistant here. We have carried out the draw and the winner is Al H. We will email you Al H.

  3. I agree a digital wallet needs to do more than just be a digital version of my physical wallet, it needs to be intelligent and help make my life easier. Im not a fan of “interconnected” for everything, as it isn’t realistic. There are far too many security and internal politics issues to ever resolve to make that happen. However, we could start by trying to make sure wallets are intelligent and aren’t just about payments.

    Everytime I see a new “Wallet” for my phone, it is centred almost entirely around making a single payment with my debit / credit card. Yes, that’s a must, but that is never going to make us consumers ditch our wallets and start making all payments with mobile devices, the argument / experience isn’t compelling enough for us to change our habits. Likewise, there are very few arguments that compel any business to engage in mobile payments…

    For me, mobile wallets need to deliver added value to my shopping experience and incentives for me to change. It also has to do the same for a business if it is ever to be a success. This means a wallet needs to of course facilitate payments, but has to have everything else I expect in my wallet, deals, vouchers, loyalty schemes, discount cards, memberships etc, but also deliver them to me in an intelligent fashion that makes my life much easier.

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