THE MOBILE WALLET

Author:

Guidone, Zachary

Area of Honors:

Management Information Systems

Degree:

Bachelor of Science

Document Type:

Thesis

Thesis Supervisors:

John Jordan, Thesis Supervisor
John Jordan, Thesis Supervisor
Dr. John C. Spychalski, Thesis Honors Advisor

Keywords:

American mobile wallet
mobile wallet
wireless communication industry development
wireless communication industry
wireless industry
mobile platform
mobile wallet platform
Isis
NTT Docomo
Google
Visa
contactless payment
near field communication
NFC
mobile payment applications
customer relationship management applications
wireless industry business models
smartphone
smart phone
cell phone
cellular phone
, smart phone payment applications

Abstract:

Physical and digital functionalities are converging with more velocity every day. This convergence will induce the American consumer and relevant market players to adjust. This thesis specifically examines the concept of a mobile, digital wallet defined as the integration of cashless payments and the mobile phone into one device. The possibility of a mobile wallet is the result of increased mobile network and smart phone capability coupled with the opportunity for revenue stream enhancements. The potential of mobile payment systems has been illustrated with relative success. With new technology these devices are capable of providing a more mutually beneficial shopping experience for all involved parties. This had practical implications in Japan, where the first mobile wallet platform was implemented. A case study on the mobile wallet in Japan reveals similarities and differences to the situation unfolding in America. Despite the similarities, the number of potential contenders in the American market with relevant strategic positions complicates the situation. Each contender’s ability to capitalize on a given market advantage will dictate how the architecture of the market itself eventually forms. The development of the mobile wallet will also largely depend on how usable and functional it is, both to end users and service providers. Revenues can be generated by providing transaction processing, data management, or a combination of the two services. Payment service providers have an established business model for the credit card services they provide. These providers can develop a competitive edge by obtaining a favorable position in the mobile wallet market. There is also a significant advantage to be gained by the contender providing the software for mobile payment, thus controlling the data generated by it as well. This massive amount of potential data generation detailing end user behavior represents an opportunity for another advantage to be gained, that is the ability to negotiate successful relationships between consumers and the companies seeking to reach them. The American mobile wallet will present opportunities for the end user and the organizations responsible for its implementation. A solution will have appeal to both merchants and consumers. Merchants will need to be equipped with the necessary hardware and the marketing services allowing them to benefit from the concept. Consumers will require an incentive to adopt the service and a commitment to respecting their privacy. The complexity of the market allows for different methods of potential revenue generation, but requires careful management of the mix between product functionality and consumer needs.