Mobile wallets for the rest of us – Mobile World Live

Mobile wallets for the rest of us

14 JUL 2011

By Rebecca Ray, Senior Analyst, Common Sense Advisory
 
Analysts and handset makers are predicting that 53% of all mobile devices will be NFC-enabled by 2015. About 863 million of us will then have direct access from our pocket, purse, or backpack not only to our mobile wallets, but to services that allow a lot more remote control over what we do every day.
 
At the same time that our phones are translating those pesky “No Parking – Your Vehicle Will Be Towed” signs as we travel in foreign lands, they will also be calculating the foreign exchange fees on our latest shopping transactions.
           
However, what are the options for the billions of people on the planet who already have mobile phones, but who will not be able to afford to upgrade to the newest and flashiest NFC-enabled version of their current models?
 
Companies like China Telecom and Alibaba already have the answer; switch Subscriber Identity Module (SIM) cards for Removable User Identity Module (RUIM). And voilà, without requiring a hardware upgrade or the purchase of a new handset, the feature phone you already own is now a mobile wallet.
 
The newly announced service in China is available to China Telecom’s 3G subscribers through a special SIM card in the form of a mobile payment card, developed jointly by China Telecom and China UnionPay. The services offered depend on the banking services integrated with the card (up to 10 different bank cards can be linked).
 
Alibaba, through its online payment platform Alipay, announced a new mobile barcode payment system on 1 July that even works on non-NFC-enabled phones. You can use it to pay with your Alipay account or your debit/credit cards. Retailers simply point their barcode scanning guns at the barcodes on the phones, and the transactions are processed.
 
These newly announced ways to transform phones into mobile wallets without depending on NFC are even more important to people outside of Europe and North America. With no access to ATMs or to the internet in any other way, the feature phone truly is becoming the economic lifeline for many people nearer the base of the economic pyramid.
 
Now even larger than PayPal and with its already large presence in Southeast Asia, expect Alipay to continue to expand its services and geographic reach over time. This could mean more options for those limited to feature phones for the foreseeable future.
 
Rebecca Ray is a senior analyst at independent market research firm Common Sense Advisory.  

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