By James Richards

The mobile payments battleground is heating up. Players like Google, O2 and Orange have already brought their offerings to market and there’s still more to come. Microsoft recently announced it would develop a wallet for its Windows Phone operating system, and rumours are rife that Apple will get in on the act when the iPhone 5 is eventually released.  

As more players come on board the mobile wallet marketplace will become increasingly crowded, so it’s imperative that wallet providers look to set their offerings apart from the rest, and push the boundaries of innovation to win over UK consumers. It is fair to say that UK consumers are among the most tech savvy and demanding on the planet. It’s this demand that has raised the question of exactly what customers want and need from a mobile wallet.

Microsoft has said from the outset that it will allow consumers not only to make NFC-based payments, but also store coupons, credit cards and loyalty cards in one place. O2 meanwhile has incorporated mobile shopping and related discounts into its O2 Wallet (although not NFC-based payments so far) while Apple, although not officially in the mobile wallet marketplace, is manoeuvring into position by allowing customers to store airline boarding cards and cinema tickets in its Passbook app which is due to be released in the autumn.

To get an insight into what mobile wallets can do, one can look at O2’s decision to pick the Welsh Village of Rhiwbina to pilot fully its wallet app (I should mention we work with O2). The decision highlights how a mobile wallet can be used to address customer needs, as opposed to just ‘wants’. The 11,000 residents of the village don’t have access to a single cash machine, which has always meant they’ve had to manage their money carefully in order to avoid unnecessary trips in the car or bus to make a withdrawal. The introduction of the app means residents are able to pay each other back for a dinner, or split a round of drinks amongst a group of friends down at the local rugby club. The village’s isolation is a means to demonstrate a central feature of the O2 service which is the ability to transfer funds between mobile handsets via text.

So Rhiwbina is an extreme example of how such an application can improve people’s day- to- day lives, but it does emphasise the importance of designing such offerings for users’ real-world needs. In this crowded payments marketplace it’s now essential for banks and mobile operators to ensure that their technology meets a true need – whether it’s one customers already know they have or not.

The plethora of mobile payments applications available can leave customers feeling they have too much choice and, while there is no clear market leader, many will struggle to choose between very similar products. The winners in the mobile battleground will be those that show how their product is truly of value to the consumer, and clearly stake a claim within this area of expertise.

James Richards is VP of Mobile at Intelligent Environments

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members.