Mobile and Digital Wallets: U.S. Landscape and Strategic Considerations for Merchants and Financial Institutions

Publication Date: January 2018

The U.S. Payments Forum Mobile and Contactless Payments Working Committee developed this white paper to provide information about and guidance for stakeholders regarding the rapidly changing mobile and digital wallet landscape.

The white paper describes five wallet models (device-centric mobile proximity, device-centric mobile in-app, card-not-present card-on-file, QR code, and digital checkout), and typical wallet specifications, including interaction methods, credential storage, and tokenization.  The most prevalent technologies are reviewed, including Near Field Communication (NFC), Host Card Emulation (HCE), Trusted Execution Environment (TEE) and Magnetic Secure Transmission (MST), and check-out processes and benefits and challenges for QR code are discussed.

Security is a critical consideration for any payment technology, and NFC security is discussed, both embedded in an SE or with HCE and TEE.  The role of tokenization is described, as is the criticality of the identity verification and customer authentication processes.

The paper surveys wallet history, citing examples for each of the wallet types and identifying some of the factors that may have helped drive or impair adoption and usage.  Because adoption is often driven by additional value-added features, such as order-ahead, the features that wallet providers are offering are described.  Industry forecasts of future adoption and trends, such as social payments and “invisible” payments, are highlighted.

The white paper concludes with a discussion of the various strategic considerations for merchants and financial institutions when they are implementing their mobile wallet strategy.

The intention is to synthesize the early information from the market to help mobile and digital wallet ecosystem participants make appropriate strategic choices and to drive adoption of new payment technologies that ultimately improve customer experience.

About the Mobile and Contactless Payments Working Committee

The Mobile and Contactless Payments Working Committee was formed in November 2016 as part of the expanded U.S. Payments Forum charter.  The goal of the Mobile and Contactless Payments Working Committee is for all interested parties to work collaboratively to explore the opportunities and challenges associated with implementation of mobile and contactless payments in the U.S. market, identify possible solutions to challenges, and facilitate the sharing of best practices with all industry stakeholders.


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