Mobey Forum, the Finland-based group that brings together banking organizations in an effort to focus their efforts on common challenges, is turning its attention to digital wallets, in particular their use cases beyond payments.
The news comes at a time when several big banks—including Wells Fargo, U.S. Bank, and PNC—aim to launch a digital wallet later this year to “address longstanding payment problems in e-commerce.” Mobey Forum, with its emphasis on beyond-payments use cases, seems to be taking a longer view.
This is a crucial time for making inroads into digital wallets and digital identification, as adoption advances and traditional banks look for a relevant foothold with consumers, especially from younger generations, who are increasingly using these growing technologies.
More than Just Payments
Data compiled by Javelin Strategy & Research shows that a mobile or digital wallet is the preferred payment method by 29% of U.S. consumers from the Generation Y and Generation Z segments, second only to debit or credit cards among both groups. The same holds true for the population at large, although at a slightly lower rate (23%). Those younger generations, collectively, made up roughly 42% of the U.S. population in 2021, with that share projected to rise sharply in the years ahead. Banks have an existential need to attract and retain these consumers.
That will mean connecting them with products that make not only payments easier but also help navigate the complexities of day-to-day digital life. A new Javelin report on digital IDs outlines how the technology, properly implemented, can help guard consumers against such threats as new-account fraud, account takeovers, and synthetic fraud. There is a role for financial institutions to play in guiding customers to such products and alleviating their concerns around privacy.
The Mobey Forum Focus
Mobey Forum has had its eyes on mobile wallets for more than a decade, and indeed, that decade has seen wallet usage expand, with things like concert and sporting event tickets, boarding passes, and preferred payment cards loaded onto them. Merchants worldwide have embraced the technology.
The forum’s Digital Wallet Expert Group will build on that work as banks seek to entrench themselves not only with the wallets as they’re used today, but also with emerging use cases.
Where Wallets Go from Here
Another recent Javelin report on coming developments in fintech investment suggested that wallets trying to get to the “top of the funnel” for sales opportunities could offer the evaluation of the payment options the owner holds, then optimize for cost of credit, actual price, rewards, and other considerations. In essence, it would be a move beyond the wallets’ marketing of their own payments products and a move toward seamlessly picking the best mechanism available to the wallet holder for a particular transaction.
As banks consider their role in a landscape where the likes of Apple, Google, PayPal, and Amazon already enjoy wide access to consumers’ payment credentials, such do-it-for-me features could represent a way in. Everybody wants to have the card at the top of the wallet, of course, but banks have a wider interest in prospective customers, with more financial products to offer once they’re in the door.