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© 2016 NTT DATA, Inc.
Mobile Wallets Research and Analysis
May 2016
© 2016 NTT DATA, Inc. 2
What is a Mobile Wallet?
A mobile wallet is an “app” on a consumer’s smartphone that allows
them t...
© 2016 NTT DATA, Inc. 3
100+
POS transactions were
performed by participants at
more than 19 different merchants
Mobile Ma...
© 2016 NTT DATA, Inc. 4
*Note: Indicates only partially tested due to provider constraints
Mobile Wallet Inclusion Criteri...
© 2016 NTT DATA, Inc. 5
We evaluated a
representative
sample of
12 Mobile
Wallets covering
a variety of
sectors
Digital
Pr...
© 2016 NTT DATA, Inc. 6
Starbucks and Paypal
lead due
to device compatibility
and Use features.
Digital Provider wallets
w...
© 2016 NTT DATA, Inc. 7
Wallets scoring higher
were favored across
merchant acceptance,
funding, and
checkout experience.
...
© 2016 NTT DATA, Inc. 8
Current State of Mobile Wallets
LOW HIGH
HIGH
Consumer Experience
MobilePaymentCapabilities
LEVELUP
© 2016 NTT DATA, Inc. 9
Pros and Cons for all ProvidersConsPros
Digital Providers Merchants Tech Titans
• Direct relations...
© 2016 NTT DATA, Inc. 10
Appendix
© 2016 NTT DATA, Inc. 11
Mobile Wallet Rankings – Merchants and FI
Wallet
Provider
OverallRank
OverallUser
Experience
Devi...
© 2016 NTT DATA, Inc. 12
Mobile Wallet Rankings – Tech Titans
Wallet
Provider
OverallRank
OverallUser
Experience
Device
Co...
© 2016 NTT DATA, Inc. 13
Mobile Wallet Rankings – Digital Providers
Wallet
Provider
OverallRank
OverallUser
Experience
Dev...
© 2016 NTT DATA, Inc. 14
Evaluation Criteria Definitions and Scoring Levels
Device Compatibility Ease of Set Up Ease of Us...
© 2016 NTT DATA, Inc. 15
Evaluation Criteria Definitions and Scoring Levels
Merchant Acceptance Transaction Range Fund Typ...
© 2016 NTT DATA, Inc. 16
Full Mobile Wallet Listing
Mobile
Category
Name
Device
specific
Issuer
Specific
Association
Speci...
Contact Us
NTT DATA Consulting, Inc.
704.936.1600 | ntt.data.consulting@nttdata.com
www.nttdata.com/usconsulting
@NTTDCons...
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Mobile Wallets Research and Analysis

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NTT DATA Consulting’s annual mobile wallet analysis. Starting in 2013, we began analyzing some of the Mobile Wallet offerings leveraging a systematic view of the range of mobile payment capabilities and customer experience. With recent announcements from industry leaders such as Apple, Wal-Mart and the top financial institutions, we have updated our view on where each of the major mobile wallets fits in today’s market for 2016.

Published in: Economy & Finance
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Mobile Wallets Research and Analysis

  1. 1. © 2016 NTT DATA, Inc. Mobile Wallets Research and Analysis May 2016
  2. 2. © 2016 NTT DATA, Inc. 2 What is a Mobile Wallet? A mobile wallet is an “app” on a consumer’s smartphone that allows them to purchase goods or services at a minimum of one Point of Scale merchant location
  3. 3. © 2016 NTT DATA, Inc. 3 100+ POS transactions were performed by participants at more than 19 different merchants Mobile Market Study Overview Prior to this study, only a small percentage of our participants were utilizing a mobile wallet. 75% Had never registered or used a mobile wallet of any type. DE | NC | FL | OH | TX | CT | GA Testing was conducted across 7 Geographic areas 18+ Financial Institution/Financial Product/Payment Networks were used Issued by top 10 credit and debit issuers 90% Participants used a variety of POS enabled Apple, Andriod, or Samsung devices spanning two Operating systems* (iOS 7+ and KitKat 4.4+) 11 active participants were involved in our study *A Windows phone was initially also included in our study, unfortunately, none of the wallets in scope support Windows compatible wallet.
  4. 4. © 2016 NTT DATA, Inc. 4 *Note: Indicates only partially tested due to provider constraints Mobile Wallet Inclusion Criteria NTT DATA evaluated a representative sample of 30+ Mobile Payment Applications for inclusion in our study. MOBILE SELECTION CRITERIA Mobile Wallet Sector Category Study Scope Not POS Capable Pending Market Launch Accepting Location Not Found Lacked Wallet Conditions Apple Pay Digital Provider IN MC PayPass Card Association IN X Pay Pal app Tech Titan IN Level Up Tech Titan IN VS PayWave Card Association IN X Samsung Pay Digital Provider IN Android Pay Digital Provider IN Walmart Pay Merchant OUT X Chase Pay Financial Institution OUT X Current C Tech Titan IN Capital One Financial Institution IN* X Dunkin Donuts Merchant IN Starbucks Merchant IN Burger King Merchant IN Target Merchant OUT X Payapp Wallet Tech Titan IN* X Tabbedout Tech Titan IN FreeBeePay Tech Titan OUT X CorPay Tech Titan OUT X Mobile Selection Criteria Must be accepted at a minimum of one merchant Compatible with at least one smartphone device? Must be able to complete a point-of-scale transaction If only one merchant, must either be: Top 50 Retailer More than 2,500 retail locations Support 1+ funding sources ‘in wallet’
  5. 5. © 2016 NTT DATA, Inc. 5 We evaluated a representative sample of 12 Mobile Wallets covering a variety of sectors Digital Providers Financial Institutions Merchants Tech Titans EVALUTAION CRITERIA User Experience Payment Capability Device Capability Ease of Set Up Ease of Use Rewards/Loyalty Merchant Acceptance Transaction Range Supported Funding Types Checkout Experience Mobile Wallet Evaluation Criteria Dimensions and Data for scoring wallets within each category.
  6. 6. © 2016 NTT DATA, Inc. 6 Starbucks and Paypal lead due to device compatibility and Use features. Digital Provider wallets were stand outs in ease and security in Set Up and Use. Lower scoring wallets were impacted by poor merchant acceptance and less intuitive set up. Tech Titans received high ranks for offering merchant partners’ coupons or discounts to incent use. Burger King’s app was very difficult to understand; negatively impacting it’s overall User Experience score. User Experience Rankings Across Provider Categories Device Compatibility, Ease of Set Up, Ease of Use, Rewards/Loyalty 0 5 10 15 20 25 30 35 Starbucks PayPal AndroidPay ApplePay SamsungPay CurrentC CapitalOne DunkinDonuts LevelUp TabbedOut BurgerKing PayApp
  7. 7. © 2016 NTT DATA, Inc. 7 Wallets scoring higher were favored across merchant acceptance, funding, and checkout experience. Without the exception of Starbucks, merchant wallets ranks were lower due to inconsistent acceptance across merchant locations, limited transaction types, and low security. Burger King ranked low due to restrictive funding channels; PayPal or BK gift card only. Samsung Pay fell slightly short for not accepting on Card Network and unidentifiable at Point of Sale as accepted form of payment, as our testers experiences some failures. Tech titans were competitive in checkout experience but ranked lower for merchant acceptance, transaction types and funding restrictions Payment Capability Rankings Across Provider Categories Merchant Acceptance, Transaction Range, Funding Types, Checkout Experience 0 5 10 15 20 25 AndroidPay ApplePay PayPal SamsungPay Starbucks TabbedOut CurrentC DunkinDonuts CapitalOne LevelUp Burger ApplePay
  8. 8. © 2016 NTT DATA, Inc. 8 Current State of Mobile Wallets LOW HIGH HIGH Consumer Experience MobilePaymentCapabilities LEVELUP
  9. 9. © 2016 NTT DATA, Inc. 9 Pros and Cons for all ProvidersConsPros Digital Providers Merchants Tech Titans • Direct relationship with Financial Issuer • Wallet application on device by default • Device security is shared with wallet • Directly funded from existing accounts • Rich rewards and coupons • Pre-ordering capabilities • Employee Knowledgeable (aware) • Compatible with device wallets for easy access • Device agnostic • Subscribed merchants; better working knowledge • Richer features/functionality offered • Trusted security • Ties to existing reward programs • Offers locator services/alerts and storage/payment with some gift cards • Limited to certain financial institutions • Lack of rewards/loyalty redemption • Limited to certain device types • Subject to their technology platforms • Limited to one merchant • Low security • Fund restrictions (e.g. pre-funding, increments, PayPal) • Limited merchants and types • Specific to Geographic locations • Low security • Limited App support • Limitations to credit/debit card through single FI; must be a customer • Full capability limited to Android device only • Multiple mobile platforms (banking vs. wallet) Financial Institutions Apple Pay, Samsung Pay, Andriod Pay Starbucks, Dunkin Donuts, Burger King PayPal, LevelUp, Tabbed Out, Current C, PayApp Capital One Pay
  10. 10. © 2016 NTT DATA, Inc. 10 Appendix
  11. 11. © 2016 NTT DATA, Inc. 11 Mobile Wallet Rankings – Merchants and FI Wallet Provider OverallRank OverallUser Experience Device Compatibility EaseSetUp EaseofUse Rewards/ Loyalty Overall Payment Experience Merchant Acceptance Transaction Range TypeFunds Supported Checkout Experience Summary 48 32 9 7 11 5 16 3 2 4 7 Strong rewards tie and consistent merchant experience across all locations. Preordering, accept Apple Pay as funding channel and compatible with apple wallet for expedited purchasing, and partner marketing. However, if not regular customer, little incentive to re-use. 37 25 9 8 7 1 12 2 1 2 7 Full functionality requires Android device & Capital One product; partially tested. Open loop, limited funding acceptance. High marks for security, location, and notification features. Use search capability to store & pay with various merchant gift cards. 35 23 7 5 8 3 12 3 2 3 4 Closed loop, location services, but inconsistent acceptance across merchant locations. Linked to rewards /loyalty program, ability to send gift card. Integrates with Apple Wallet for expedited POS access. Low functionality compared to competitor merchant wallet. 25 15 6 4 4 1 10 3 1 2 4 Closed loop with very restrictive funding options, requires PayPal account set up, Offers in store coupons, but no rewards. App not intuitive, location services supported, however, unclear and inconsistent location acceptance. Poor employee knowledge.
  12. 12. © 2016 NTT DATA, Inc. 12 Mobile Wallet Rankings – Tech Titans Wallet Provider OverallRank OverallUser Experience Device Compatibility EaseSetUp EaseofUse Rewards/ Loyalty Overall Payment Experience Merchant Acceptance Transaction Range TypeFunds Supported Checkout Experience Summary 50 28 8 7 11 2 22 5 4 4 9 Open looped, sizeable merchant footprint, works across more transaction types. High marks for wallet security, transaction history and accepted funding. Detailed set up and requires PayPal account and prefunding. Has functions for merchant locator, pre-ordering, and loyalty card searching, storage, and redemption. Exceptional employee knowledge where accepted. 39 25 7 5 8 5 14 4 1 2 7 Still emerging. Open loop, POS wallet only. Facilitates merchant partnerships for acceptance; lack of employee education. Restrictive funding sources; lacks trusted security. Offers merchant partnering merchant coupons or discounts. 36 21 6 6 8 1 15 4 1 3 7 Open loop, no prefunding, specific to bars/restaurants. Limited merchant footprint; location specific. More local restaurants versus chains. High marks for employee education and ease of use. Features include tipping, pay at the table or after leaving, splitting the tab with others. Level Up 32 22 8 4 8 2 10 3 1 2 4 Open loop, POS only, limited merchant footprint locator service required. Good marks for funding accepted and device compatibility. Offers wallet lock and supports transaction history. Low marks for set up security and monthly billing process and spend limits. PayApp 12 10 2 5 3 0 2 0 0 2 0 Unable to complete set up and fully test due to wallet provider technical constraints
  13. 13. © 2016 NTT DATA, Inc. 13 Mobile Wallet Rankings – Digital Providers Wallet Provider OverallRank OverallUser Experience Device Compatibility EaseSetUp EaseofUse Rewards/ Loyalty Overall Payment Experience Merchant Acceptance Transaction Range TypeFunds Supported Checkout Experience Summary 51 28 5 10 10 3 23 5 2 4 12 Open Loop; broader device compatibility, large POS merchant footprint, across geographic locations; low In app presence. High marks for accepted funding. Easy set up, portable from Google Wallet. Excellent set up and transacting security; with itemized transaction history. High marks for loyalty & gift card features. NFC capability expedites POS. 49 27 6 10 9 2 22 5 2 4 11 Open Loop, limited device compatibility but more device types, app native to devices. Largest POS and In-App merchant footprint across all geographic locations. High marks for accepted funding. Excellent market presence and brand awareness @ checkout. Top rated for set up and use security; transaction history supported. NFC capability and transaction default settings expedite checkout @ POS and In-App. Limited reward storage, lacks rewards/ loyalty card features/functions. ng Pay 43 26 4 11 9 2 17 4 2 2 9 Open Loop, limited device compatibility, NFC/MST capable to broaden merchant acceptance to however low brand awareness @ POS and failures were still experienced. Easy set up and access through home screen. High ranks for security, although users reported biometric issues. Wallet app not pre-loaded on device; requires download and separate set up. Inconsistent support of transaction history. No differential in checkout experience.
  14. 14. © 2016 NTT DATA, Inc. 14 Evaluation Criteria Definitions and Scoring Levels Device Compatibility Ease of Set Up Ease of Use Rewards/Loyalty Ability to work with multiple device providers (e.g. iPhone, Android, Windows, Samsung) and Device Type Easy Customer Set Up / Intuitive Interface, secures data, requires minimal time, and entry shortcuts. Intuitive Interface, Easy access, Locations accepted, help/tutorials and Expedited Purchasing Rewards accrual /redemption supports loyalty cards, and partner loyalty/offer/marketing features/functions. Not compatible with any major device provider Not able to set-up Not able to use. No Rewards or Loyalty Compatible with only 1 major device provider Difficult interface, lengthy set up, multiple apps required, limited entry options, supports wallet lock only Difficult to access at POS, not intuitive and no merchant locator services, worsened purchase timing Stores 1 Loyalty / Rewards , no link or features Compatible with at least 1 major device and smart phone only Difficult interface, quick set up, limited entry options, offers wallet password and wallet sends notification to ‘out of wallet’ channel Intuitive interface, easy access, offers location service, some in app tutorials, purchasing inconsistently expedited Stores 1+ Loyalty / rewards Cards no links thru wallet, no feature/function Compatible with 1+ major device provider and 1+ POS smart phone only Easy intuitive interface, 1+ entry shortcuts, minimal time, offers wallet password/PIN, wallet sends notification in ‘out of wallet’ channel; requires confirmation Intuitive interface, easy access, no tutorial or location service, but accessible on internet accessible, purchasing consistently expedited Stores 1 Loyalty/Rewards, access/redeem links thru wallet Compatible with 1+ major device provider 1+ POS smart phone and other device type Easy intuitive interface, 1+ entry shortcuts, minimal time, requires wallet password/PIN and ‘Issuer’ notification in other channel , requires confirmation Intuitive interface, easy access, support merchant location service and help/tutorials, purchasing consistently expedited. Stores 1 or more Loyalty/Rewards, can access/redeem links thru wallet, 1 feature/function User Experience
  15. 15. © 2016 NTT DATA, Inc. 15 Evaluation Criteria Definitions and Scoring Levels Merchant Acceptance Transaction Range Fund Types Supported Checkout Experience Number/types of accepting merchants, consistent acceptance, identifiable as form of payment accessibility across geographic locations Range of Transaction Types supported in wallet Funding options supported minus any restrictions, e.g. Issuer, Card Association, Spend limits, Transaction fees Calculated scoring based on expedited purchasing, employee knowledge, identified form of payment, transaction history, and security Not accepted at POS n/a No funding options Lengthen purchasing, no employee knowledge, identified payment, or transaction history Unrecognized, limited merchants, hard to find in most geographic reasons POS Only 1 channel (Credit only) No change in purchasing, lacks knowledge, identified form of payment, or transaction history 1 Merchant or Merchant type, inconsistent location acceptance, no In- App, limited access based on location POS + 1 (e.g. In-App) 2 channels (e.g. Credit, Debit) No change in purchasing, lacked 2 amongst knowledge, identified form of payment, or transaction history 1 Merchant or Merchant type, or variety, consistent location acceptance, some In- App, location based POS + 2 (e.g. In-App, P2P) 3 channels (e.g. Credit, PayPal, gift card) Expedited purchase, lacked 1 amongst knowledge, identified form of payment, or transaction history Variety of merchant types, POS and In- App, consistence acceptance, across geographic location POS + 3+ 4+ channels (e.g. Google Wallet, Debit, Bank account) Expedited purchase, knowledgeable employee, recognized form of payment, and Transaction history Payment Experience
  16. 16. © 2016 NTT DATA, Inc. 16 Full Mobile Wallet Listing Mobile Category Name Device specific Issuer Specific Association Specific Transaction Range Merchant / Location Specific Funding Sources Terminal Type Addt'l Cost Digital Payment 1 Apple Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App Credit, Debit NFC Card Association 2 MasterCard PayPass No Yes NFC Digital Payment 3 Pay Pal app No Online, P2P, POS Digital debit/credit card has 2.9% transaction fee Digital Payment 4 Level Up No No P2P, POS Digital, NFC, QR Code Card Association 5 Visa Pay Wave Yes VS Online, POS? Digital Payment 6 Samsung Pay Yes MC, VS, AMEX Online, POS, InApp Debit, Credit NFC, HCE, MST Digital Payment 7 Android Pay Yes Yes MC, Visa, AMEX, Discover Online, POS, In App NFC Merchant 8 Walmart Pay No No No POS, online Select Walmarts credit, debit, pre-paid or Walmart gift card QR Code Financial Institution 9 Chase Pay No Yes - Chase only POS, online, In-App Chase Debit/Credit QR Code Digital Payment 10 Current C No Columbus, OH only Financial Institution 11 Capital One Yes Yes MC, VS NFC Merchant 12 Dunkin Donuts No Merchant 13 Starbucks No No No Online, POS, P2P Merchant 14 Burger King Merchant 15 Target No Digital Payment 16 PayApp Wallet No No POS Credit, Debit QR code Digital Payment 17 TabbedOut no no no no Digital Payment 18 Freebee Pay Yes No POS Yes credit, debit, or PayPal Barcode Scan Digital Payment 19 Corfire - CorPay No No No including closed- loop/open-loop gift cards, credit, debit, prepaid, and companion payment cards NFC or Non NFC
  17. 17. Contact Us NTT DATA Consulting, Inc. 704.936.1600 | ntt.data.consulting@nttdata.com www.nttdata.com/usconsulting @NTTDConsulting | LinkedIn: /NTTDATAConsulting 17 Prepared by Peter Olynick | Senior Practice Lead Retail Banking Peter.olynick@nttdata.com

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