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How Are Mobile Wallets Changing Payments?

Posted on Feb 02, 2012

Will mobile wallets revolutionize the payments landscape? According to Russ Jones, they will.

His article, which was published recently on the Payments Views blog, is a must-read for any payments professional looking to check out the future of the industry.

There is no doubt that payments and marketing are aligning closely to gain better insight into consumer preferences, buying trends and other consumer behavior information, explained Leilani Doyle, vice president of marketing and product management at US Dataworks.

The idea of purchase visibility and who in the card ecosystem has a complete view of the consumers is key, Doyle said. As mobile wallets become more popular, this could really shift where the best information is stored.

Here's how Jones explains the pre-mobile payments world: For the most part, credit card issuers and merchants were closest to a consumer's purchase behavior. Merchants knew more than issuers because they knew the breakdown about how the customer spent that $38 at the grocery store.

Retailers know what you buy, but they don't know who you are, Jones wrote. Unless you tell them with members club or reward programs or share your telephone number. Online retailers can use cookies to see how often you visit, track your movement through their online store and analyze your shopping cart.

But with mobile wallets, this pattern is different.

  1. As a result of the registration and activation process, the mobile wallet knows the customer's name, phone number, email, bill-to address, etc. 

  2. It might know where you are from the GPS location of your phone.

The mobile wallet knows a lot, but does it know what the consumer buys? That's what Jones calls the multi-hundred million [dollar] question.

Source: Payments Views, January 2012